TMI Blog1978 (8) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... and 22, Colootola Street, Calcutta, for a total consideration of Rs. 80,000. The ownership right was acquired for consideration of Rs. 25,000 and the perpetual leasehold right was acquired for Rs. 55,000. The source of this consideration was stated to be, inter alia, cash and loan deposits from the mother and the five brothers of the assessee, aggregating to Rs. 46,000. Before the ITO the assessee filed confirmation letters from the said creditors and/or depositors where it was stated that the amounts of the loans and deposits had been disclosed under s. 24 of the Finance (No. 2) Act of 1965. Notices under s. 131 of the I.T. Act, 1961, were sent by registered post to the said creditors and/or depositors, which were returned with the postal remark " out of Calcutta ". Thereupon, the assessee was asked to produce the said persons. In spite of several adjournments none of them were produced and ultimately the assessee admitted that she was unable to produce them. The ITO noted the relationship between the assessee and the said persons and held that the alleged loans and deposits from the said persons were bogus. He held further that the disclosures under s. 24 of the said Finance (N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d loans and/or deposits were concerned, the AAC found that the books of account produced by the assessee before the ITO could not be completely thrown aside even if they were imperfect and even though some of the financial transactions including the banking transactions had not been incorporated therein. On the availability of the said sum of Rs. 46,000 in the hands of the assessee before April 18, 1962, from the said loans and/or deposits he held that by reason of the declaration made by the creditors and depositors under s. 24 of the Finance (No. 2) Act of 1965, which had been accepted by the Commissioner, West Bengal-II, it could not be said that the said amounts belonged to the assessee. The declarations were sufficient evidence that the creditors and depositors had the amounts. Accordingly, he held that the said loans and/or deposits aggregating to Rs. 46,000 were genuine and directed the ITO to delete the addition of the said sum. From the order of the AAC there were appeals to the Tribunal both by the assessee and the revenue. It was contended on behalf of the assessee before the Tribunal, inter alia, that the assessment which was completed on September 3, 1968, was clearl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition of the said Rs. 46,000. On an application of the assessee under s. 256(1) of the I.T. Act, 1961, the Tribunal has drawn up a statement of case and has referred the following questions for the opinion of this court as questions of law arising, from its order: " 1. Whether, on the facts and in the circumstances of the case, the assessment completed on September 3, 1968, was valid in law ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in confirming the addition of Rs. 46,000 representing the cash deposits in the following names: Cash deposit on Rs. (a) Md. Safique Ahmed 2-4-62 8,000 (b) Md. Jamil Ahmed 4-4-62 8,000 (c) Md. Rafique Ahmed 2-4-62 8,000 (d) Md. Samin Ahmed 4-4-62 8,000 (e) Md. Aftab Ahmed 10-4-62 8,000 (f) Mst. Safiqunnessa 10-4-62 6,000 ------------- 46,000 " ------------- Mr. Pronab Pal, learned counsel for the assessee, contended at the hearing that admittedly no return had been filed by the under either sub-s. (1) or sub-s. (2) of s. 139. The admitted case was that a return under s. 139(4) had been filed on September 14, 1964, on the basis whereof the assessment should have been complete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions which were considered by the Supreme Court in that case were not in pari materia with the sections of the later Act which applied in the instant case. All that the Supreme Court laid down there was that a return, whether showing either a profit or a loss, could be filed under s. 22(1) or s. 22(3) of the Act of 1922. Mr. A. K. Sengupta, learned counsel for the revenue, has contended on the other hand that s. 139(4) did not permit the filing of more than one return. If more than one return were filed, it would be assumed that the assessee has chosen to withdraw the earlier return and relied on the subsequent return. If the subsequent return was filed within the time allowed under the said sub-section, it could be accepted by the ITO and it would be deemed that the earlier return had been withdrawn. Where revised return was filed under s. 139(5), both the original return and the revised return had to be kept on record. For certain purposes, e.g., computation of interest and penalty, the original return was deemed to be valid return, but for the purposes of assessment the revised return had to be taken into account. Where two returns were filed under sub-s. (4) of s. 139, it c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessment. " Mr. Sengupta also sought to support the assessment on the ground that it fell within the ambit of s. 153(1)(b) of the 1961 Act. At this stage, we may refer to the relevant sections of the I.T. Act, 1961. The material portion of s. 139 are as follows: " 139. (1) Every person, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall furnish a return of his income or the income of such other person during the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed-... " Provided that, on an application made in the prescribed manner, the Income-tax Officer may, in his discretion, extend the date for furnishing the return, and, notwithstanding that the date is so extended, interest shall be chargeable in accordance with the provisions of sub-section (8)... (2) In the case of any person who, in the Income-tax Officer's opinion is assessable under this Act, whether on his own total income or on the total income of any other person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case falling within clause (c) of sub-section (1) of section 271 ; or (c) the expiry of one year from the date of filing of a return or revised return under sub-section (4) or sub-section (5) of section 139, whichever is latest. " On a consideration of the sections and the decisions cited it appears to us that if an assessee after having filed a return under s. 139(4) files another return subsequently it is to be assumed that he has, given a go-by to the return filed previously and that so far as he is concerned the return filed subsequently is the correct and the proper return. Where the ITO accepts the return filed subsequently., allows it to be filed and proceeds to assess thereunder without any objection from the , it would not be open to the assessee to contend later that the return filed subsequently was invalid . A similar proposition was laid down by the Punjab High Court in Bibi Gurdarshan Kaur v. CIT [1964] 51 ITR 1, where it was held that when the ITO had entertained a subsequent return and has acted on it and had issued a notice under s. 22(2) of the 1922 Act, he could not thereafter contend that the return filed was invalid and issue notice under s. 34 of the said A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brought before the revenue authorities they were precluded from making any further enquiry in the matter and had to accept the same. In support of his contentions Mr. Pal cited a decision of the Delhi High Court in Rattan Lal v. ITO [1975] 98 ITR 681. The question in that case was whether the ITO could reject the explanation of an assessee in respect of a sum found credited in his books on the ground that nature and source of the said sums in the hands of the depositor in whose name the credit stood had not been satisfactorily explained though the depositor had declared it as his income in pursuance of the voluntary disclosure scheme under the Finance (No. 2) Act of 1965. On an application under art. 226 of the Constitution , the Delhi High Court held that it was not permissible for the revenue to go into the question of the nature and source of amounts declared under the said voluntary disclosure scheme and to say that it did not represent the income of the declarant. By the fiction introduced in the said statute, the amount declared would become the income of the declarant and had to be taxed in his hands. The same amount could not be the income of any other person. Section 24 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court, inter alia, held that the Finance (No. 2) Act of 1965 was not enacted to permit or connive at frauds sought to be committed by making benami declarations; that the protection envisaged by the said Act was confined to declarants only and no one else and that the revenue could not be prevented by the said Act from correctly assessing the income of third persons. It was held that it was open to the revenue authorities in the facts to investigate into the genuineness of the deposits and record a finding in respect of the declarations. Mr. Sengupta has also brought to our notice a decision of the Allahabad High Court in Badri Pd and Sons v. CIT [1975] 98 ITR 657. The facts in that case were that the assessee, a partnership firm, was being assessed to income-tax in the assessment year 1967-68. In the accounts two amounts were found credited in the names of the two ladies who were the wives of the two partners in the firm. The assessee was required to explain the cash credits. The ladies filed affidavits stating that the money belonged to them and evidence was adduced to show that they had disclosed the said amounts under the Finance (No. 2) Act of 1965 and that tax had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Badri Pd. and Sons [1975] 98 ITR 657 (All). In our view, once a declaration has been made under the Finance (No. 2) Act of 1965, so far as the declarant is concerned, it will be a presumption of law that the amount declared is his income. Thereafter, it will no longer be open to the revenue to enquire into the question whether in fact the amount is the declarant's income or not or of the source from where the declarant obtained the money. But we make it clear that this would not prevent the revenue authorities from enquiring the genuineness of a loan shown by a third person, who alleges that the money was received from a person who may be a declarant under the said Finance Act. The enquiry will be necessarily confined to the question as to whether in fact the loan was received from the declarant. The enquiry cannot go further and the source of the money in the hands of the declarant cannot be investigated. For the reasons as stated above, we answer the questions referred as follows : Question No. 1 is answered in the affirmative and in favour of the revenue. Question No. 2 is answered in the affirmative and also in favour of the revenue. In the facts and circumstances of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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