Skip to content


Kumar Jagadish Chandra Sinha Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKolkata High Court
Decided On
Case NumberIncome-tax Reference No. 83 of 1975
Judge
Reported in(1982)26CTR(Cal)323,[1982]137ITR722(Cal)
ActsIncome tax Act, 1961 - Sections 139(1), 139(2), 139(4), 139(5), 143, 153 and 271(1)
AppellantKumar Jagadish Chandra Sinha
RespondentCommissioner of Income-tax
Appellant AdvocateR.C. Deb and ;Manas Banerji, Advs.
Respondent AdvocateB.L. Pal and ;A.N. Bhattacharji, Advs.
Cases ReferredGopaldas Parshottamdas v. Commissioner of Income
Excerpt:
- sabyasachi mukharji, j.1. in this reference under section 256(1) of the i.t. act, 1961, the following three questions have been referred to this court :'1. whether, on the facts and in the circumstances of the case, the tribunal was correct in law in holding that the return of income furnished by the assessee by virtue of the provisions contained in sub-section (4) of section 139 of the income-tax act, 1961, beyond the time allowed under sub-section (1) or sub-section (2) of the said section, could not be construed as a return furnished under either of the latter sub-sections and in that view holding that the assessee was not entitled to file a revised return under sub-section (5) of section 139 of the income-tax act, 1961 ? 2. whether, on the facts and in the circumstances of the case,.....
Judgment:

Sabyasachi Mukharji, J.

1. In this reference under Section 256(1) of the I.T. Act, 1961, the following three questions have been referred to this court :

'1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the return of income furnished by the assessee by virtue of the provisions contained in Sub-section (4) of Section 139 of the Income-tax Act, 1961, beyond the time allowed under Sub-section (1) or Sub-section (2) of the said section, could not be construed as a return furnished under either of the latter sub-sections and in that view holding that the assessee was not entitled to file a revised return under Sub-section (5) of Section 139 of the Income-tax Act, 1961 ?

2. Whether, on the facts and in the circumstances of the case, the assessments made by the Income-tax Officer for the assessment years 1964-65 and 1965-66 were within the time-limit prescribed in Section 153(1)(b) of the I.T. Act, 1961 ?

3. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the cases for the assessment years 1964-65 and 1965-66 were such as falling within Clause (c) of Sub-section (1) of Section 271 ?'

2. On question No. 1, the Tribunal has held in favour of the assessee. This question has been referred at the instance of the Revenue. On the other two questions, however, the Tribunal's view was against the assessee and these have been referred at the instance of the assessee. It appears that the facts lie within a short compass and the point involved is also short, We are concerned with two assessment years, viz., the assessment years 1964-65 and 1965-66. For the first year, the last date on which the return could be filed under Section 131(1) of the I.T. Act, 1961, was 30th June, 1964. In this case, no notice under Section 139(2) of the Act had been served so as to enable the assessee to file the return within the time under that sub-section. According to the assessee, 13th August, 1964, was the date for filing the original return, which was indisputably accepted as a return filed under Section 139(4) of the Act, that is, the date on which the original return was filed. On 18th February, 1969, a revised return was filed disclosing a capital loss due to sale of land. It is the case of the assessee that the revised return, in the facts and circumstances of the case, was not warranted by the provisions of law specially in view of Sub-section (5) of Section 139 of the Act. About this date, there is little discrepancy. The date, according to the order of the ITO, was 18th January, 1969. However, according to the order of the AAC as well as the order of the Appellate Tribunal the date was 18th February, 1969, and we shall accordingly proceed on the basis, that is to say, on 18th February, 1969, the so-called return, which has been described as a revised return disclosing the capital loss, was filed. According to the assessee, 31st March, 1969, was the date within which the assessment should have been completed under the law, being the expiry of the four years of the relevant assessment year. But, in this case, the assessment was completed on the basis of the so-called revised return on 15th January, 1970, and on that date the penalty proceedings were initiated. So far as the assessment year 1965-66 is concerned, 30th June, 1965, was the date, according to the assessee, within which the return under Section 139(1) of the I.T. Act, 1961, could be filed. In this case also, no notice under Section 139(2) of the Act had been served so as to enable the assessee to file the return within the time thereunder. 17th December, 1965, was the date for the filing of the original return which was accepted as the return under Section 139(4) of the Act. On 17th July, 1969, the assessee filed another return which he described as the revised return disclosing capital gains due to sale of lands. According to the assessee, in the facts and circumstances of the case, under Sub-section (3) of Section 139 of the Act, this was unwarranted. 31st March, 1970, was the date within which the assessment in the instant case for the relevant year should have been completed. On 3rd July, 1970, there was an initiation of penalty proceedings Under Section 271(1)(c) of the I.T. Act, 1961. On the 6th July, 1970, the assessment was completed on the basis of the so-called 'revised return' and on 16th July, 1970, the notice Under Section 271(1)(c) of the I.T. Act, 1961, was issued. In those circumstances, the ITO passed an order on 15th January, 1970, for the assessment year 1964-65. He narrated the facts as we have mentioned before and thereafter dealt with the different heads of income and observed that there were capital gains, taking into consideration the so-called return, which was called a 'revised return', and added a sum of Rs. 24,000 on that score. The total income was computed at Rs. 3,17,205. On that date penalty proceedings were initiated.

3. Similarly, for the subsequent assessment year, i.e., for the assessment year 1965-66, order in respect of which was passed on 6th July, 1970, the ITO noted the facts regarding the filing of return as we have mentioned before and proceeded to compute the income and added long-term capital gains of Rs. 14,82,387 on account of capital gains on sale of land. Before the Tribunal, these facts were adverted to and assessments were referred to by both sides and, referring to the aspects, the Tribunal observed that the following issues arose for a determination of the controversy in the instant case :

'(i) Whether a return filed voluntarily before the completion of an assessment but after the end of the relevant assessment year, can be treated to be a return under Sub-section (1) of Section 139 ?

(ii) Will a return filed in response to a notice under Section 139(2) before the completion of the relevant assessment but after the expiry of the extended date of furnishing the return under Section 139(2) still be a return under Sub-section (2) of Section 139 ?

(iii) If the answer to the first two questions are in the negative, will it not have to be held that the returns filed belatedly under the provisions of Sections 139(1) and 139(2) are returns under Section 139(4) ?

(iv) As Section 139(5) provides for the filing of a revised return only by such persons who have furnished a return under Sub-section (1) or Sub-section (2) of Section 139, can it be said that a person filing a return under Sub-section (4) of Section 139 is debarred from furnishing a revised return ?

(v) Why does Section 153(1)(c) refer to the date of the filing of a return or a revised return under Sub-section (4) or Sub-section (5) of Section 139 Does it mean that under Section 139(4) both a return and a revised return can be filed Does it mean further that even under Section 139(5) a return or a revised return can be filed ?

(vi) What does the expression' in a case falling within Clause (c) of Sub-section (1) of Section 271' occurring in Section 153(1)(b) mean? Does it refer to a case in which a prima facie case exists for initiating action under Section 271(1)(c)? Or does it refer to a case where an action Under Section 271(1)(c) has already been initiated ?'

4. As regards issues Nos. (i) and (ii), the Tribunal's view was in the negative. The Tribunal was of the view that neither a return filed voluntarily by an assessee before the completion of the assessment but after the end of the relevant assessment year, nor a return filed in response to a notice under Section 139(2) before the completion of the relevant assessment but after the expiry of the extended date for furnishing the return under Section 139(2) could be said to be a return under the respective Sections 139(1) and 139(2). This would mean, according to the Tribunal, that such returns were only returns under Sub-section (4) of Section 139. This answer, according to the Tribunal, also disposed of point No. (iii) as aforesaid. On point No. 4, the Tribunal observed that it would be pertinent to take due notice of the fact that Sub-section (3) of Section 22 of the Indian I.T. Act, 1922, had now been split into Sub-sections (4) and (5) of Section 139 of the I.T. Act, 1961, After this splitting, it would appear clear enough that the Legislature did not provide the benefit of furnishing a revised return under Section 139(5) to persons who had not filed returns under Sub-section (1) or Sub-section (2) of Section 139 of the Act. In their view, this benefit did not extend to any return Under Section 139(4) which, for certain purposes, would be deemed to be a return Under Section 139(1). Regarding issue No. (v), the Tribunal was of the view that the wordings of Section 153(1)(c) suggest that it is possible to file both a return and a revised return under Sub-section (4) as well as under Sub-section (5) of Section 139. But such an interpretation would offend a reasonable interpretation of Section 139(5), which referred only to 'a revised return'. The Tribunal was of the view that it was not possible to file an original return Under Section 139(5) nor could the revised return be permitted to be filed Under Section 139(4). If a revised return had been filed by an assessee who had earlier filed a return Under Section 139(4) and not Under Section 139(1) or 139(2), the latter had to be treated as invalid and ignored. This position, in the opinion of the Tribunal, followed from the ratio of the decision of CIT v. Ranchhoddas Karsondas : [1959]36ITR569(SC) . So far as issue No. (vi) is concerned, the Tribunal referred to three decisions and observed that as a prelude to the consideration of the main question the ITO should be required to consider the question whether the assessment was being made within the period of limitation prescribed for the completion of the assessment. In this connection, reference was made to the observations of Mr. Justice Bhargava in the decision of Mir Suba Hari Bhakta v. ITO : [1960]39ITR617(All) . According to the Tribunal, the learned judge observed that on the basis of a valid return, the ITO was quite competent to take proceedings under Sections 22(4) and 23(2) of the I.T. Act and those proceedings could be validly pursued till the making of the order of assessment, no period of limitation being prescribed for these proceedings as such. Learned advocate for the assessee laid a great deal of stress on the expression 'valid return' used by the learned judge. According to him the return filed in this case, before us, was an invalid return.

5. Reference was made also to the decision of the Delhi High Court which the Tribunal has referred to in the judgment. The Tribunal was further of the view that there was no conflict of opinion in the three cases to which the Tribunal referred, all of which related to the interpretation of the Indian I.T. Act, 1922. The Tribunal felt that the ratio of the decision would be applicable to an assessment made under the I.T. Act, 1961. Section 153(1)(c) extended the normal period of limitation to 8 years from the end of the assessment year in which the income was first assessable 'in a case falling within Clause (c) of Sub-section (1) of Section 271'. The Tribunal then referred to some other decisions and was of the view that in the instant case copies of two notices, one for each of the assessment years, were signed by the ITO. No evidence of those two notices having been served on the assessee had been, however, available in the records. Even so, the Tribunal observed that there was no reason to think that the notices were not issued. The Tribunal also noticed that for the assessment year 1964-65 another notice under Section 274/271(1)(c) was issued and served on 15th January, 1970. Similarly, for the assessment year 1965-66, a second notice under Section 274/271(1)(c) was issued on 16th July, 1970, but a direction to issue such a notice for this year had been recorded on 3rd July, 1970, before the completion of assessment for this year. The Tribunal observed that the penalty proceedings for both these years were pending with the AAC.

6. Then the Tribunal considered the two sets of penalty notices issued under Section 274/271(1)(c) for the assessment years 1964-65 and 1965-66. The Tribunal was of the view that it could not be said that the said notices had been issued frivolously without there being a prima facie case of concealment of income by the assessee and the notices were not issued mala fide solely for the purpose of saving limitation. If it was otherwise, the penalty notices would not have saved the Revenue the limitation beyond the period of four years from the end of 1964-65 and 1965-66 in which the income first became assessable. If any, the period of limitation would get extended to 8 years from the end of the assessment year in which the income first became assessable. In this respect, the Tribunal felt that they could ignore the first set of notices under Section 274/271(1)(c) issued for the assessment years 1964-65 and 1965-66 on 29th September, 1967, because there was no material on record to suggest concealment, if any, which the ITO might have sought to cover up by these notices. The second set of notices under Section 274/271(1)(c) issued on 15th January, 1970, for 1964-65 and on the 19th July, 1970, for 1965-66, however, were found to be based on the detection of prima facie concealment of income for both these assessment years. From the relevant assessment orders, the Tribunal noted that capital gains for these two years were not there. Not only no income or loss on the sale of area or plots covered by these two notices were shown in the assessee's return for those years, filed respectively on 13th August, 1964, and 17th December, 1965, but also the assessee did not claim any loss on the sale of these plots. In fact, according to the Tribunal, his total silence on these transactions led the assessee to file the second set of returns for these years on 18th February, 1969 and 17th July, 1969, respectively, marking both as revised returns. In these returns the assessee claimed substantial capital losses. Now, thereafter, the assessee took the plea that he was precluded from filing the returns for these years and the Tribunal had accepted that plea that the returns were invalid. But the Tribunal was of the view that the assessee on these grounds could not claim immunity from penalty under Section 271(1)(c) in respect of the suppression of transactions and the difference between the suppressed income and disclosed income came within the meaning of the Expln. to Section 271(1)(c) in respect of the assessment year 1964-65 and in these premises there were materials, according to the Tribunal, upon which the ITO could prima facie come to the conclusion that there was concealment of income and, therefore, the initiation of proceedings under Section 274/271(1)(c) of the I.T. Act, 1961, was held to be valid in law. Upon these facts, as we have indicated before, three questions have been referred to this court.

7. On behalf of the assessee it was urged before us that if the assessment was not made on a return properly filed under Section 139 then there could not have been an assessment under Section 143 of the Act. If there was no assessment under Section 143 of the I.T. Act, 1961, according to learned advocate for the assessee, there could not be any question of the limitation being saved in view of the provisions of Section 153(1)(b). The return filed subsequently, it was contended, could not in law, be considered to be a revised return. The next aspect that was emphasised was that if in a subsequent return the particulars of the capital gains had been disclosed then there was no question of any concealment of income and accordingly there was no scope for the application of the provisions of Section 271(1)(c) of the I.T. Act, 1961, and the initiation of the penalty proceedings was without jurisdiction. In order to appreciate these contentions it would be necessary to refer to Section 139 of the Act of 1961. Section 139, which is in Chap. XIV, deals with the procedure for assessment and Sub-section (1) enjoins that every assessee, whose total income reaches the taxable income, is obliged to file his return in case no notice has been served upon him by 30th June, in the case of an assessee like the petitioner. We need not deal with the proviso which deals with an extension of time nor need we pause to consider the provisions of Sub-section (1A) of Section 139. Sub-section (2) of Section 139 deals with cases where notices are issued by the ITO calling upon the assessee to file a return within 30 days from the date of service of the notice. Sub-section (3) states that an assessee can file a return where there is no taxable income if he wanted any loss to be carried forward. Sub-section (4) of Section 139 provides that any person who has not furnished a return within the time allowed to him under Sub-section (1) or Sub-section (2) may, before the assessment is made, furnish the return for any previous year at any time before the end of the period specified in Clause (b) and the provisions of Sub-section (8) shall apply, in every such case, and Clause (b) deals with the different periods during which such return could be filed. We also need not consider Sub-section (4A) which was introduced subsequently. Sub-section (5) of Section 139 enjoins that if any person having furnished a return under Sub- Section (1) or Sub-section (2) discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the assessment was made. The other sub-sections need not detain us. Section 143 deals with an assessment where a return has been made under Section 139. It provides for different contingencies, viz., where the assessment could be made after calling the assessee and where the assessment could be made without calling the assessee and lays down the procedure. Section 144 deals with a best judgment assessment. In a case of a failure of the assessee to comply with the requirement of notices, Section 153 prescribes the period of limitation for a completion of the assessment. It enjoins that no order of assessment shall be made under Section 143 or Section 144 at any time after the expiry of different time-limits given in Clauses. (a)(i), (a)(ii) and (a)(iii) of Sub-section (1) of Section 153 of the Act. Sub-clause (b) of Section 153(1) provides for the time-limit being after the expiry of eight years from the end of the assessment year in which the income was first assessable, in a case falling within Clause (c) of Sub-section (1) of Section 271 of the Act. Clause (c) of Section 153(1) enjoins the time as after expiry of one year from the date of filing of a return or a revised return under Sub-section (4) or Sub-section (5) of Section 139, whichever is the latest. Clause (c) of Section 271(1) deals with the case where an assessee has concealed the particulars of his income or furnished inaccurate particulars of income. It was, according to the assessee, the assessment was not made under Section 144 of the Act. That is right. The assessment had been purported to be made under Section 143. According to learned advocate for the assessee, the assessment could not be made under Section 143 because the revised return filed upon which the purported assessment had been made could not be a valid return. He contends, as was contended before the Tribunal and the authorities below, that if a person had not complied with the provisions of either Sub-section (1) or Sub-section (3) of Section 139 he could file a return at any time before the assessment being made under Sub-section (4) of Section 139, as the assessee has done in this case, and having done so he could not exercise the option of Sub-section (5) of Section 139 because, according to learned advocate for the assessee, the express language of Sub-section (5) of Section 139 enjoins that if any person having furnished a return under Sub-section (1) or Sub-section (2) discovers any omission or any wrong statement therein, he could file a revised return but it did not provide for an opportunity to an assessee in the case of a return having been filed under Sub-section (4) of Section 139 of the Act. Therefore, it was contended that, in view of this specific provision of Sub-section (5) of Section 139 and the absence of the mention of Sub-section (4) in Sub-section (5), the return filed was invalid and the action taken subsequently was invalid.

8. We are, however, unable to accept this contention. Sub-section (5) is a part of Section 139. The statute itself provides for a provision for the filing of a revised return. Section 143 does not specifically deal with the return filed either under Sub-section (1) or Sub-section (2) or Sub-section (4) of Section 139. It deals generally with a return filed under Section 139 of the Act. It is true that Sub- Section (5) specifically mentions Sub-section (1) or Sub-section (2) but does not mention the case of A return filed under Sub-section (4) of Section 139. The scope of the return or the true purport of a return filed under Sub-section (5) shows, what is called a revised return, and it substitutes the original return filed. That being the true purpose and the meaning of the revised return, Sub-section (5) of Section 139 gives an opportunity to correct the omission or mistake done on the part of the assessee and under Sub-section (4) of Section 139, the Legislature has given specifically the right to the assessee to file a return at any time before the assessment is made. Incase a return is filed before the assessment is made, the Revenue cannot ignore the return and proceed to make the assessment. This position follows logically, in our opinion, from the ratio of the decision of the Supreme Court in the case of CIT v. Ranchhoddas Karsondas : [1959]36ITR569(SC) , and we are unable to accept the criticism that the Revenue's reference to this decision in making the assessment was inappropriate. It logically follows from the ratio of the decision of the Supreme Court that once a return had been filed that return could not be ignored. If that is the position then some action had to be taken and as to what is the scope of the revised return has been explained by the Allahabad High Court in the case of Gopaldas Parshottamdas v. CIT : [1941]9ITR130(All) , and the same view has been expressed and adopted by a subsequent decision of the Allahabad High Court in the case of Dhampur Sugar Mills Ltd. v. CIT : [1973]90ITR236(All) , where Mr. Justice Swarup, explaining the meaning of a revised return, observed at pp. 240-241 of the decision as follows:

'The question however remains as to whether this return will continue to form the basis for purposes of assessment even after it was substituted by a revised return. Section 22(3) of the 1922 Act as also Section 139(5) of the 1961 Act permit an assessee to file a revised return if he discovers any omission or wrong statement in the return filed by him. The Income-tax Act contemplates the filing by the assessee of a correct and complete return. The law gives him a right to substitute and bring on record a correct and complete return if he discovers any omission or wrong statement in the return originally filed by him. The law cannot contemplate the making of an assessment on the basis of a return which even the assessee claims contains wrong statements. When an assessee files a revised return, he in fact admits that the original return filed by him was not correct or complete and substitutes the same by a revised return which according to him is correct and complete. The effective return for purposes of assessment is thus the return which is ultimately filed by an assessee on the basis of which he wants his income to be assessed. Learned counsel for the assessee, to support his contention to the contrary, urged that, as penalty proceedings under Section 28(1)(c) of the 1922 Act or under Section 271(1)(c) of the 1961 Act are permissible if the assessee conceals the particulars of his income or deliberately furnishes inaccurate particulars of such income in the original return even though he may subsequently file a correct and complete revised return, it must be held that the original return is also the effective return. I am not inclined to accept the contention. A person is penalised for the wrong act that he does and the offence becomes complete as soon as the act is done. It cannot be cured by subsequent mending. It is on this principle that an assessee can be penalised for concealing the particulars of his income or deliberately furnishing inaccurate particulars of such income. But, when an assessment has to be made, the assessee is given a right to file a correct and complete return if he discovers an error or omission in the return filed earlier. The assessment can be completed only on the basis of the correct and complete return. The earlier return, after a revised return has been filed, cannot form the basis of assessment although it may be used to indicate the conduct of the assessee. Hence, for the purpose of assessment of income, the effective return must be the revised return filed by the assessee ultimately.

There is a distinction between a revised return and a correction of the return. If the assessee files some application for correcting a return already filed or making amends therein, it would not mean that he has filed a revised return. It will still retain the character of an original return, but once a revised return is filed, the original return must be taken to have been withdrawn and to have been substituted by a fresh return for the purpose of assessment. The same view has been taken in Gopaldas Parshottamdas v. Commissioner of Income-tax : [1941]9ITR130(All) .'

9. With this expression of views, Mr. Justice Pathak agreed, though he expressed some doubt on some other aspect of the matter with which we are not concerned in the instant reference. This view of the Allahabad High Court was adopted by a Division Bench of this court in the case of Mst. Zulekha Begum (Khatoon) v. CIT : [1981]129ITR560(Cal) . Learned advocate for the assessee sought to distinguish this decision of the Calcutta High Court on the plea that in the decision before the Calcutta High Court it was observed by the learned judge delivering the judgment that, where the ITO accepted and allowed the return filed subsequently and proceeded to assess thereunder and make the assessment, then it was not open to the assessee to contend later that the return filed subsequently was invalid. According to learned advocate for the assessee, this was not the position in the instant case before us. According to learned advocate for the assessee, the assessee was disputing this position subsequently. In our opinion, this is not the true ratio upon which the Calcutta High Court proceeded to deliver its judgment. The very fact that the assessee filed a return subsequently goes to indicate that the assessee wanted that subsequent return to be acted upon. His purpose was, however, to get capital losses carried forward for which he filed the subsequent return. But then when he found that the result of his filing this return has exposed himself to the offence under Section 271(1)(c) he sought to retract the position taken by him prior thereto. This conduct on the part of the assessee, in our opinion, does not in any way affect the principle upon which the subsequent revised return should be treated as a substituted return.

10. Learned advocate for the assessee drew our attention to the judgment of the Delhi High Court in the case of O.P. Malhotra v. CIT : [1981]129ITR379(Delhi) . There, for the assessment year 1960-61, the assessee had filed a return on 30th March, 1965, disclosing an income of Rs. 1,720. On March 28, 1966, the assessee filed a revised return declaring an income of Rs. 4,295. The ITO made an assessment treating the revised return filed on March 28, 1966, as invalid in law as the return filed on March 30, 1965, had not been filed either under Sub-section (1) or under Sub-section (2) of Section 139 of the I.T. Act, 1961, On appeal, the assessee claimed that the return filed on March 28, 1966, was a valid return and also raised other grounds on the merits of the assessment. The AAC held that the revised return was a valid return under Section 22(3) of the 1922 Act and set aside the assessment and directed the ITO to complete the assessment afresh taking note of the revised return. The assessee preferred a further appeal contending that the AAC ought to have annulled the assessment and not set it aside for being re-done. The Tribunal held that, in view of Section 297(2)(b), the assessment had to be completed under the 1961 Act and the return dated March 30, 1965, had been correctly treated as a return filed under Section 139(4) and the subsequent return could not be treated as a revised return under Section 139(5)139(5) as the assessee had not furnished the return under Sub-section (1) or Sub- Section (2) of Section 139. Nor could the earlier return be treated as a voluntary return under Sub-section (4) of Section 139 as it had been filed after the expiry of four years from the end of the assessment year. The Tribunal then held that the ITO had acted legally in ignoring the second return and, therefore, the order of assessment could not be cancelled. Without modifying the AAC's order the Tribunal dismissed the appeal, observing it would not cancel the assessment order. On a reference, it was held that, in view of Section 297(2)(b) of the 1961 Act, the return filed on March 30, 1965, had to be fitted against one or the other of the sub-sections of Section 139 and it could be treated only as a return filed by the assessee under Section 139(4). In so far as the court held to the above extent, we are in respectful agreement with that view. But the court went on to observe that Sub-section (5) of Section 139 applied only in a case where a person having furnished a return under Sub-section (1) or Sub-section (2), discovered any omission or wrong statement therein. The sub-section did not refer to Sub-section (4) and, therefore, did not entitle an assessee to rectify or revise a return filed under Section 139(4). But with this view of the Delhi High Court, with great respect, we are unable to agree. It appears that in the previous two decisions of the Allahabad High Court and the decision of the Calcutta High Court, which were rendered prior to this date, the attention of the Delhi High Court was not drawn to this aspect of the matter. Nor do we find that the true scope and meaning of the revised return was adverted to by the Delhi High Court. Learned advocate for the assessee laid a good deal of emphasis on the observation of the Tribunal dealing with the case of the Allahabad High Court in the case of Mir Suba Hari Bhakta v. ITO : [1960]39ITR617(All) , where the Tribunal observed that the Allahabad High Court had observed that there was a valid return. The observation at p. 621 did not use the expression 'valid return' in the sense it was sought to be urged by learned advocate for the assessee. We are unable to accept the position that the return filed was invalid or could not be treated for the purpose of assessment and that the assessment made on the return subsequently filed was an invalid assessment.

11. The second aspect of the matter was that there was a concealment, because there was disclosure by the second return. The offence or the act of concealment is complete by the suppression of facts at the time when the first return was filed and the subsequent conduct does expiate the guilt but does not obliterate the offence committed. This view has also been expressed by the Allahabad High Court in the case of Dhampur Sugar Mills Ltd. v. CIT : [1973]90ITR236(All) , and the observation of Mr. Justice Swarup has also been reiterated by the Calcutta High Court in the case of Mst. Zulekha Begum (Khatoon) v. CIT : [1981]129ITR560(Cal) . We are in respectful agreement with this view on this aspect also. In that view of the matter, in our opinion, the Tribunal was in error in holding that the assessment made was invalid or the return filed subsequently was not a valid return. We are also, in view of the facts discussed by the Tribunal, in agreement with the Tribunal that the initiation of the proceedings in this case under Section 271(1)(c) was justified.

12. In the premises, question No. 1 is answered in the negative and in favour of the Revenue, question No. 2 is answered in the affirmative and in favour of the Revenue and question No. 3 is also answered in the affirmative and in favour of the Revenue.

13. In the facts and circumstances of the case, parties will pay and bear their own costs.

Sudhindra Mohan Guha, J.

14. I agree.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //