TMI Blog2007 (6) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act under similar circumstances as mentioned above in respect of asst. yr. 1999-2000. 3. In its cross objections, the assessee has challenged the reassessment proceedings on the ground that the AO had no jurisdiction to reopen the assessments when regular assessment proceedings were pending. H is also claimed in the cross-objections that the deductions claimed by the assessee through the revised returns should have been allowed by the AO. 4. The assessee company is engaged in the manufacture and sale of cosmetics. For asst. yr. 1999-2000 it declared a total income of Rs. 1,76,64,550. The return was processed under s. 143(1) of the Act. Later, a notice under s. 143(2) was also issued and scrutiny assessment proceedings were undertaken. While these proceedings were in progress, the AO noticed that the assessee had claimed depreciation on the land component of a property which was not allowable and hence a notice under s. 118 was issued on 20th Feb., 2001. In response to this notice, the assessee vide its letter dt. 19th March, 2001 informed the AO to treat the original return as having filed in compliance to the notice under s. 148 of the Act. Thus, the return pursuant to the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee has filed its cross-objections. 7. With regard to the grievance of the Department, it was submitted by the learned Departmental Representative that having filed a return pursuant to the notice under s. 148, the assessee could not have filed a revised return claiming additional relief because the proceedings under s. 147 were for the benefit of the Revenue and not for the assessee. For this proposition he relied on the judgment of the Supreme Court in the case of Sun Engineering Works (P) Ltd., of the Calcutta High Court in the case of CIT vs. Banshidhar Jalan Ors. (1994) 120 CTR (Cal) 401 : (1994) 207 ITR 188 (Cal) and of the Madras High Court in the case of India Forge Drop Stamping Ltd. vs. CIT (1998) 146 CTR (Mad) 28 : (1998) 233 ITR 112 (Mad). 8. The learned counsel for the assessee in reply and also taking up the assessee's cross-objection together submitted that undoubtedly the assessee was aggrieved on the issue of notice under s. 148 when proceedings under s. 143(3) were still pending. However, he fairly conceded that the issue is covered against the assessee by the judgment of the jurisdictional High Court in the case of Sri Krishna Mahal vs. Asstt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llow the judgment of the said High Court. Therefore, respectfully following the judgment of the jurisdictional High Court, the cross-objection has to be rejected and we hold the reassessment proceedings to be valid. 12. Having held the reopening of the assessment to be valid, the issues that remain for consideration can be enlisted as follows: 1. Whether a return filed pursuant to the notice under s. 148 can be revised or not? 2. Whether the issuance of notice under s. 148 will restrict the time limit provided in s. 139(5) to file a revised return revising the original return of income? 13. So far as the first issue is concerned, we can refer to the judgment of the Supreme Court with advantage in the case of R. Dalmia Anr. vs. CIT (l999) 152 CTR (SC) 383 : (l999) 236 ITR 480 (SC). As per the said judgment, s. 147 empowers the AO to assess or reassess income chargeable to tax that has escaped assessment in any assessment year. He may do so subject to the provisions of ss. 148 to 153. Before making an assessment or reassessment under s. 147, the AO must, by reason of the provisions of s. 148, serve on the assessee a notice to file a return of his income "and the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r strengthened by the observations of the Supreme Court in the case of R. Dalmin Anr. to the effect that the assessments under s. 143 and assessments and reassessments under s. 147 are different, but in making assessments and reassessments under s. 147 the procedure laid down in sections subsequent to s. 139 has to be followed. However, the above right of revising the return under s. 148 that we intend to read in s. 139(5) cannot be without fetters. The fine distinction between the assessments made under s. 143 and those made under s. 147 remains intact and does not get blurred by what has been stated above. It has been held by the Supreme Court in the case of Sun Engineering Works (P) Ltd. that the provisions of s. 147 are meant for the benefit of the Revenue and not for the benefit of the assessee. The Court clearly held that the proceedings under s. 147 do not extend to revising, reopening or reconsidering the whole assessment or permitting the assessee to reagitate questions which had been decided in the original assessment proceedings. The assessee cannot be permitted to convert the reassessment proceedings as his appeal or revision, in disguise, and seek relief in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled after filing the return under s. 148, though within the time limit prescribed under s. 139(5) to revise the original return, yet, the revised return will be deemed to be revising the return filed under s. 148 only and accordingly the restriction as mentioned above shall apply. 15. Coming to the facts of the case before us, so far as asst. yr. 1999-2000 is concerned, we find that the revised return was filed on 23rd Feb., 2001 whereas the return under s. 148 was filed on 20th March, 2001. Therefore, the revised return has the effect of revising the original return filed under s. 139(1) on 29th Dec., 1999. Under these circumstances, the CIT(A) was justified in allowing the claim of the assessee regarding the disallowance made under s. 40A(7) and regarding the amount paid to LIC Employees Group Gratuity Scheme. 16. So far as asst. yr. 2000-01 is concerned, we find that the return under s. 148 was filed on 20th March, 2001, and the revised return was filed on 1st Feb., 2002, i.e. after the return under s. 148 was filed. Therefore, by virtue of the revised return, the assessee cannot claim deduction under s. 80HHC which was never claimed by it in the original return. In other w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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