TMI Blog1993 (9) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment was made by the Income-tax Officer under section 143(3) of the Act. In its return, the assessee claimed deduction of a sum of Rs. 90,000 which it had spent out of its income for the above assessment year within three months from the close of the relevant accounting year. A statement to that effect was filed along with a return of income filed on October 14, 1974. The Income-tax Officer, however, disallowed the claim of the assessee for deduction of the said amount of Rs. 90,000 on the ground that the assessee failed to exercise its option in writing as required by the Explanation to section 11(1) of the Income-tax Act before the expiry of the time allowed under sub-section (1) or sub-section (2) of section 139. The order of the Income-tax Officer was confirmed by the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal ("the Tribunal"). The Tribunal held that the assessee failed to exercise its option before the expiry date for filing, of the return of its income required by the provisions in Explanation to section 11(1) of the Act. The Tribunal, in its order, observed as under "The assessee, in the present case, had not exercised any option before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contention of the assessee and to uphold the order of the Appellate Assistant Commissioner." The assessee has come to this court by reference under section 256(1) of the Income-tax Act, 1961. The controversy before us is thus in a narrow compass. The answer depends upon the interpretation of the provisions of section 11(1) of the Act more particularly the Explanation thereto, in the light of the provisions of section 139 of the Act, particularly sub-sections (1), (2) and (4) thereof. These sections as they stood at the material time, to the extent relevant, read as follows : " 11. Income from property held for charitable or religious purposes.-(1) Subject to the provisions of sections 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income (a) income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India ; and, where any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of twenty-five per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious year immediately following the previous year in which the income was derived." (emphasis supplied). Section 139 of the Act, as it stood at the material time, so far as relevant, reads : "139. Return of income.-(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 (a) in the case of every person whose total income, or the total income of any other person in respect of which he is assessable under this Act, includes any income from business or profession, before the expiry of four months from the end of the previous year or where there is more than one previous year, from the end of the previous year which expired last before the commencement of the assessment year, or before the 30th day of June of the assessment year, whichever is later; (b) in the case of every other person, before the 30t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (8) shall apply in every such case ; (b) the period referred to in clause (a) shall be (i) where the return relates to a previous year relevant to any assessment year commencing on or before the 1st day of April, 1967, four years from the end of such assessment year ; (ii) where the return relates to a previous year relevant to the assessment year commencing on the 1st day of April, 1968, three years from the end of the assessment year ; (iii) where the return relates to a previous year relevant to any other assessment year, two years from the end of such assessment year. (4A) Every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes, or of income being voluntary contributions referred to in sub-clause (iia) of clause 24 of section 2, shall, if the total income in respect of which he is assessable as a representative assessee (the total income for this purpose being computed under this Act without giving effect to the provisions of sections 11 and 12) exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4) of section 139 of the Act and the option contemplated by the Explanation to section 11(1) is exercised in writing along with such return, the requirements of the Explanation to section 11(1) would stand satisfied. A similar controversy came up before the Supreme Court in CIT v. Kulu Valley Transport Co. Ltd. [1970] 77 ITR 518. In that case, a dispute arose in regard to the right of an assessee to get the benefit of losses being set off and carried forward under section 24(2) of the Indian Income-tax Act, 1922, which provided that in order to get the benefit of section 24(2), the assessee must submit his loss return within the time specified by section 22(1) (corresponding to section 139(1) of the 1961 Act). Section 22(3) of the 1922 Act (corresponding to section 139(4) of the 1961 Act) enabled the assessee who had not furnished his return within the time allowed under sub-section (1) or sub-section (2) of section 22 to furnish it at any time before the assessment was made. The assessee submitted its return within the time specified in section 22(3). It was not accepted as a valid return for the purpose of section 22A to enable the assessee to carry forward the losses. The Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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