TMI Blog1992 (6) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 18th March, 1985 in which the exemption under s. 54(1) of the IT Act is allowed to the assessee. During the course of his check, the CIT came to know that granting exemption of capital gains under s. 54(1), when the assessee was an HUF is erroneous and prejudicial to the interest of the Revenue. He held that the correct position was that s. 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 s. 263 dt. 11th Feb., 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 s. 54(1) to the assessee. In pursuance of the directions of the learned CIT, the ITO started fresh assessment proceedings and a notice under s. 143(2) was issued to the assessee. At that stage, the assessee came forth with a revised return in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s impugned orders dt. 12th July, 1988. 3. In the second appeal filed by the assessee against those impugned orders of the Dy. Commissioner(A), the learned advocates for the assessee S/Shri M.J. Swamy and D. Manmohan raised the same contentions as were advanced before the Dy. Commissioner (A), which are already enumerated above. The learned advocates for the assessee also relied upon the provisions of s. 139(5) as it stood prior to its being amended by the Direct Tax (Amendment) Act, 1987 w.e.f. 1st April, 1989 which used to be as follows: "(5) If any person having furnished a return under sub-s. (1) or sub-s. (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 1st April, 1989 viz., 22nd April, 1987 itself, the provisions of the unamended s. 139(5) would only have to be applied, according to which since the revised return prior to the fresh assessment having been complete, the revised return should have been considered and the merits of the contentions made therein should have been pronounced upon and decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee under s. 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 31st March, 1985 because according to the provisions of s. 139(4)(b)(iii), where the return relates to a previous year relevant to an assessment year which is later than asst. yr. 1988 (sic) it should be filed within two years from the end of the assessment year. Therefore to be a valid return under s.139(4) also since two years period from the end of the assessment year expires on 31st March, 1985, the assessee cannot successfully argue that he is entitled to file a revised return in this case beyond 31st March, 1985. Therefore, the so called revised return dt. 22nd April, 1987 filed by the assessee cannot also be taken as a valid return permissible within the time-limit allowed under s. 139(4)(b)(iii) and in that way also the revised return is invalid, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 status and the assessment was completed in the status of HUF. (4) The order under s. 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 s. 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 Dy. Commissioner (A), Visakhapatnam are pre-eminently just and does 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 learned Departmental Representative and we are of the opinion that the Dy. Commissioner(A) is quite justified in supporting the ITO's order and confirming the same. He is als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 263 where grant of exemption under s. 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 s. 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 s. 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 consideration is whether the revised return can be stated to be a return filed under s. 139(5). Firstly, we should hold that the assessee filed its original return voluntarily under s. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 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 22nd April, 1987. By that date both the original assessment orders dt. 18th March, 1985 and the revisionary order of the CIT dt. 11th Feb., 1987 were passed. While passing the revisionary orders, the learned CIT specifically found that granting exemption under s. 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 or mistake in granting exemption under s. 54(1) was already found out by the learned CIT. However, long after his revisionary orders dt. 22nd April, 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 22nd April, 1987 can be called a revised return. There is a long catena of decisions which took the view that before calling a return a revised return under s. 139(5), the omission or wrong statement that might have occurred or crept in (1) must be bona fide and (2) must have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 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 s. 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 "revised return" filed under s. 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 with false particulars and therefore for that reason, the return filed on 22nd April, 1987 cannot be taken as a revised retur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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