TMI Blog2000 (2) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... reasonably and justly depriving the petitioner-assessee of his right to have return assessed on the merits. Alternatively, it was submitted that the return could not have been treated as invalid in view of Instruction No. 1348, dated August 30, 1980, issued by the Central Board of Direct Taxes (the CBDT). In support of the alternative contention, reliance is also placed on the case law, to which reference will be made by us hereinafter, at an appropriate stage. The assessee filed a revision petition, on March 6, 1991, against the order of the Deputy Commissioner of Income-tax, Ahmedabad, dated March 5, 1990, treating the return of income for the assessment year 198990 filed by the assessee, on December 28, 1989, as invalid return, exercising powers under section 139(9) of the Income-tax Act. It would be expedient, at this stage, to refer to the relevant provisions of section 139 of the Income-tax Act, provided in Chapter XIV, prescribing procedure for assessment and in relation to the return of income. "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 ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this sub-section includes any income from business or profession, not being a case falling under sub-clause (i), the 31st day of August of the assessment year ; (iii) in any other case, the 30th day of June of the assessment year. Explanation 2.--or the purposes of sub-clause (i) of clause (b) of Explanation 1, the expression 'working partner' shall have the meaning assigned to it in Explanation 4 of clause (b) of section 40. Explanation 3.-For the purposes of this sub-section, the expression 'motor vehicle' shall have the meaning assigned to it in clause (28) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988). Explanation 4.--or the purposes of this sub-section, the expression 'travel to any foreign country' does not include travel to the neighbouring countries or to such places of pilgrimage as the Board may specify in this behalf by notification in the Official Gazette .... (9) Where the Assessing Officer considers that the return of income furnished by the assessee is defective, he may intimate the defect to the assessee and give him an opportunity to rectify the defect within a period of fifteen days from the date of such intimation or within such further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s personal account in the firm, association of persons or body of individuals ; (e) where the accounts of the assessee have been audited, the return is accompanied by copies of the audited profit and loss account and balance-sheet and the auditor's report and, where an audit of cost accounts of the assessee has been conducted, under section 233B of the Companies Act, 1956 (1 of 1956), also the report under that section ; (f) where regular books of account are not maintained by the assessee, the return is accompanied by a statement indicating the amounts of turnover or, as the case may be, gross receipts, gross profit, expenses and net profit of the business or profession and the basis on which such amounts have been computed, and also disclosing the amounts of total sundry debtors, sundry creditors, stock-in-trade and cash balance as at the end of the previous year." The exercise of power by the Assessing Officer under sub-section (9) of section 139, in relation to the assessment year 1989-90, was sought to be revised and, therefore, revision was filed under section 264(1) of the Income-tax Act. The respondent after hearing and considering the facts and circumstances, dismis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tails of annexures, also, could not be supplied since the auditors could not complete the tax audit work and again they were at Bombay. (8) The assessee also raised a plea that oral assurance for minimum period of one month to file tax audit report was granted by the Assessing Officer. It was, therefore, the case of the assessee that time came to be granted up to March 31, 1990, in support of which, affidavit of the accountant one Mr. Lalit Amrutlal Khatri was also filed. The order of the Assessing Officer dated March 5, 1990, was sought to be revised, invoking the provisions of section 264(1) of the Act, unsuccessfully. (9) Return of the income of the assessment year 1989-90, thus, had not been filed by the assessee-company with the balance-sheet and profit and loss account, duly audited by the auditors; and also the tax audit report under section 44AB as required by the Explanation to sub-section (9) of section 139 of the Income-tax Act. The respondent, upon evaluation of the facts and circumstances and the relevant proposition of law, dismissed the revision application on July 29, 1992, and confirmed the order of the Assessing Officer and, inter alia, held that: (1) The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect is required to be made within a period of 15 days from the date of such intimation or within such further period which, on an application being made in that behalf, the Assessing Officer, may in his discretion allow and if the defect is not rectified within the said period of 15 days or the extended period, then, notwithstanding anything contained in any other provisions of the Income-tax Act, the return shall be treated as an invalid return and the provisions of the Income-tax Act shall apply as if the assessee had failed to furnish the return. As observed hereinbefore, the assessee did not rectify the defects, as pointed out by the Assessing Officer within the statutory period and had only sent a letter without specific request for extension of time. The Assessing Officer, passed the order, under section 139(9) of the Income-tax Act, holding the return as invalid. The assessee-company had raised three grounds for non-compliance of the defects intimated by the Assessing Officer. (1) That there was legal battle between the directors of the assessee-company, inter se. (2) That the chartered accountants and auditors were at Bombay. (3) That the oral request made by Mr. K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is in any way influenced by extraneous or hostile consideration. On the contrary, the Revenue could, successfully, show to us that the Assessing Officer as well as the revisional authority, exercised their discretion rightly, justly and reasonably in the light of the facts and circumstances of the case and in view of the provisions of section 139(9) of the Income-tax Act. Therefore, in our opinion, the first contention advanced before us is meritless and is required to be rejected. Obviously, therefore, it would take us, now, to, the appreciation of the second contention on the merits. In this connection, reliance is placed on Instruction No. 1348 of the Central Board of Direct Taxes dated August 30, 1980. We have been taken through the aforesaid instruction. Since, strong reliance is placed on this instruction, it would be appropriate and expedient at this stage, to refer to it, relevant portion of which reads as under: "Section 139(9) envisages the issue of a deficiency letter if it is considered that a return of income is defective. The Explanation lists the defects. The first defect mentioned is that the enclosures, statements and columns in the return of income relating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bb) as it originally stood came to be introduced with effect from April 1, 1989, and the subsequent amendment which was introduced brought into effect from July 1, 1995, and the effect of instruction upon the said provision also is not required to be undergone since the very basis of the second contention revolving around and referable to only clauses (a) and (e) of sub-section (9) of section 139. The instructions, in our opinion, as we have stated hereinbefore, do not refer to clauses (bb) and (d) of the Explanation to sub-section (9) of section 139 of the Income-tax Act and therefore are not applicable. After having given our anxious consideration and thoughts to the factual scenario emerging from the record of the present case, coupled with the relevant proposition of law and, in particular, the material provisions of section 139(9)(bb) and the exercise of discretionary power by the respondent under section 264(1) of the Income-tax Act, we are of the clear opinion that the contentions propounded by the assessee-company before the Assessing Officer as well as the revisional authority are, rightly, not upheld. It cannot be said, by any stretch of imagination, that the exercise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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