TMI Blog1992 (6) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... e date without obtaining any extension for filing the return late from the ITO. In that original return, the assessee-HUF declared a total income of Rs. 63,790 which comprised of Rs. 818 from property and Rs. 62,975 from capital gains which arises on the sale of certain immovable property. The original assessment was completed on 18-3-1985 in which the exemption under section 54(1) of the IT Act is allowed to the assessee. During the course of his check, the Commissioner of Income-tax came to know that granting exemption of capital gains under section 54(1), when the assessee was a HUF is erroneous and prejudicial to the interests of the revenue. He held that the correct position was that section 54(1) would apply only when the assessee is an individual. However, it was wrongly applied in the original assessment by the ITO to the assessee-HUF. Thus, he revised the original assessment orders, by his orders passed under section 263 dated 11-2-1987. In the revised orders, the original assessment was cancelled and the learned CIT directed the ITO to make a fresh assessment after denying the exemption under section 54(1) to the assessee. In pursuance of the directions of the learned CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4(1) is correctly granted in the original assessment itself. These contentions however, did not find favour with the CIT and they were all dismissed by his impugned orders dated 12-7-1988. 3. In the second appeal filed by the assessee against those impugned orders of the DC(Appeals), the learned advocates for the assessee S/Shri M.J. Swamy and D. Manmohan raised the same contentions as were advanced before the DC(Appeals), which are already enumerated above. The learned advocates for the assessee also relied upon the provisions of section 139(5) as it stood prior to its being amended by the Direct tax (Amendment) Act, 1987 w.e.f. 1-4-1989 which used to be as follows : " (5) 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 any time before the assessment is made. " The learned advocates contended that inasmuch as a revised return was filed long prior to 1-4-1989 viz., 22-4-1987 itself, the provisions of the unamended section 139(5) would only have to be applied, according to which since the revised return prior to the fresh assessment having been complete the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time allowed under section 139(1) or (2). Therefore the privilege given to an assessee under section 139(5) cannot be extended or utilised by the assessee before us and the ITO cannot be expected to say that because he filed his revised return before the fresh assessment is made, it should be deemed to be a valid return and the contention raised therein must be decided and pronounced upon, is not available with the assessee. (3) Even the liberty to file any number of returns or revised returns is not extended beyond 31-3-1985 because according to the provisions of section 139(4)(b)(iii), where the return relates to a previous year relevant to an assessment year which is later than assessment year 1968 it should be filed within two years from the end of the assessment year. Therefore to be a valid return under section 139(4) also since two years period from the end of the assessment year expires on 31-3-1985, the assessee cannot successfully argue that he is entitled to file a revised return in this case beyond 31-3-1985. Therefore, the so called revised return dated 22-4-1987 filed by the assessee cannot also be taken as a valid return permissible within the time-lot allowed unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion among High Courts. Thus, it is the contention of the learned DR that since the original return filed by the assessee in the capacity of HUF is a voluntary return and since the assessment is made accepting the said status, the assessee himself cannot be permitted to come forward for a change of status because the status of HUF as well as individual are two different statuses and the assessment was completed in the status of HUF. (5) The order under section 263 was passed by the Commissioner setting aside the assessment order and directing the ITO to frame a fresh assessment with a specific direction that he should deny the exemption under section 51(1) of the IT Act to the assessee. Thus, when the remand was made for a specific purpose, the ITO is bound by the scope of the remand order and he is not entitled to entertain fresh claims put forward by the assessee. For these reasons, it is stated that the orders of the D.C. (Appeals), Visakhapatnam are pre-eminently just and do not call for any interference from this Tribunal. 5. Thus, we have heard both sides completely and perused the records of the case. We are in complete agreement with the arguments advanced by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red with reference to a Tribunal's order of remand, the principle equally applies to the cases of remand passed by the CIT while exercising his powers under section 263 where grant of exemption under section 54(1) is erroneous and prejudicial to the interests of the revenue was the only matter considered by the learned CIT. Ultimately he found that no exemption should have been granted under section 54(1) and the exemption found to have been granted in the original assessment is to be withdrawn. For that purpose the assessment was set aside and the ITO was specifically directed to withdraw the relief under section 54(1). The question is whether ITO has powers while passing a fresh assessment order implementing the orders of the CIT, to go into fresh claims made by the assessee in the revised return. In the revised return, the assessee wants to change the status from HUF to individual. Having due regard to the ratio of the Allahabad High Court's decision cited supra we hold that the ITO has no jurisdiction whatsoever to entertain the fresh claims or the claim for change of status made by the assessee before the ITO in his revised return. 6. The next question taken up for considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to have been crept into that return by filing a revised return under section 139(5). 7. The next question to be considered is whether the revised return dated 22-4-1987 can correctly be called as revised return. We have already noted that in the revised return the status of the assessee was sought to be changed from HUF to individual. The intention to revise the return came to the assessee on 22-4-1987. By that date both the original assessment orders dated 18-3-1985 and the revisionary order of the CIT dated 11-2-1987 were passed. While passing the revisionary orders, the learned CIT specifically found that granting exemption under section 54(1) to the assessee when the assessment was completed in its capacity as HUF is both erroneous and prejudicial to the interests of the revenue. Thus, the error of mistake in granting exemption under section 54(1) was already found out by the learned CIT. However, long after his revisionary orders dated 22-4-1987, the assessee in order to set at naught the CIT's order wanted to file a revised return changing the status from HUF to individual. The question is whether such a return filed on 22-4-1987 can be called a revised return. There is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Haji P. Mohammed's case held the following as per the head note at page 625 : " The fact that the assessee purported to file a 'revised return' after his coming to know that the ITO had already information in possession regarding receipt by the assessee of the sum of Rs. 1, 17,633 from the E.E. which had not been shown in the original return, would not absolve the assessee from the culpability under section 271(1)(c). Since at the time of filing the original return the assessee must be taken to have been aware of his having received the amount from the E.E., but had nevertheless omitted to disclose the receipt in the original return, the second return filed by the assessee cannot be regarded as a revised return filed under section 139(5) of the Act, because there was no discovery by the assessee of any omission or wrong statement having been made by him by inadvertence in the original return." 8. On considering the facts of the case, we hold that the assessee should have been well aware of its real status at the time of filing the original return. But if its real status is that of an individual and not HUF, we should hold that the assessee deliberately filed the original return ..... X X X X Extracts X X X X X X X X Extracts X X X X
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