TMI Blog1986 (3) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Income-tax took the view that the order of the Income-tax Officer in charging interest only for the period from October 1, 19 71, till October 6, 1971, was erroneous and prejudicial to the interests of the Revenue. He, therefore, initiated proceedings under section 263 of the Income-tax Act, 1961, by a notice dated February 4, 1976. The Commissioner found that it was the duty of the assessee to file the return of its income voluntarily under section 139(1) of the Act in the prescribed form and verified in the prescribed manner. The assessee in the instant case was required to file its return in Form No. 1 as prescribed under rule 12 of the Income-tax Rules. It was provided in the form that if accounts were maintained under the mercantile system, copies of the balance-sheet and profit and loss account were required to be attached with the return. If accounts were audited, a copy of the auditor's report on statement of accounts was required to accompany the return. The Commissioner rejected the contention of the assessee that the failure to attach statement of accounts and balance-sheet was a mere irregularity and did not make the return invalid. He also rejected the contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 6, 1971, did nothing in the matter till June 8, 1973, when he started the assessment proceeding. If the return was found to be defective or incomplete, the said fact should have been brought to the notice of the assessee earlier, so that the same could have been cured. The Tribunal held that the return filed by the assessee could not be held to be incomplete or invalid. The Tribunal also found that the Income-tax Officer had applied his mind to the statutory provisions regarding levy of interest for belated submission of the return and in fact had charged interest under section 139(8). The Tribunal held that there was no provision in the Act under which interest could be charged up to the date on which copies of the balance-sheet and profit and loss account would be filed by the assessee. The Tribunal allowed the appeal of the assessee and set aside the order of the Commissioner under section 263 of the Income-tax Act, 1961. The order of the Income-tax Officer was restored. On an application of the Revenue under section 256(2) of the Income-tax Act, 1961, this court directed the following questions, stated to be questions of law arising out of the order of the Tribunal, to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mistake, defect or omission therein, if the return is otherwise in substance and in effect in conformity with the Act. The learned advocate submitted that the introduction of the new section indicated that prior to October 1, 1975, the law was different and a return should be considered to be invalid if it was not in strict compliance with the Rules and the form prescribed. In support of his contentions, learned advocate for the Revenue drew our attention to the following sections of the Income-tax Act, 1961 : " Section 139(8). Where the return under sub-section (1) or sub-section (2) or sub-section (4) for an assessment year is furnished after the specified date, or is not furnished, then whether or not the Income-tax Officer has extended the date for furnishing the return under sub-section (1) or sub-section (2), the assessee shall be liable to pay simple interest at twelve per cent. per annum, reckoned from the day immediately following the specified date to the date of the furnishing of the return. Section 292B. No return of income, assessment, notice, summons or other proceeding furnished or made or issued or taken or purported to have been furnished or made or issued o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was substituted by a revised return. Section 22(3) of the 1922 Act as also section 139(5) of the 1961 Act permit an assessee to file a revised return if he discovers any omission or wrong statement in the return filed by him. The Income-tax Act contemplates the filing by the, assessee of a correct and complete return. The law gives him a right to substitute and bring on record a correct and complete return if he discovers any omission or wrong statement in the return originally filed by him. The law cannot contemplate the making of assessment on the basis of a return which even the assessee claims contains wrong statements. When an assessee files revised return, he in fact admits that the original return filed by him was not correct or complete and substitutes the same by a revised return which according to him is correct and complete. The effective return for purposes of assessment is thus the return which is ultimately filed, by an assessee on the basis of which he wants his income to be assessed... The assessment can be completed only on the basis of the correct and complete return. The earlier return, after a revised return has been filed cannot form the basis of assessment, al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he pleadings within the period of limitation. On a reference, it was held by a Division Bench of this court that the absence of or defect in the signature of the appellant in the memoranda was not illegal or fatal but was only an irregularity which could be rectified by amendment. The amendment took effect from the date when the document was originally filed. The memoranda as originally filed were not a nullity and the Tribunal had power to accept them if at the hearing the Tribunal was satisfied that the assessee had in fact intended to file an appeal. (b) Mohindra Mohan Sirkar v. ITO [1978] 112 ITR 47 (Cal). In this case, the assessee had filed his returns for three assessment years within time. The assessment proceedings were initiated thereafter on the returns filed, but no assessment was, however, made. Later, the assessee was served with three notices under section 148 of the Income-tax Act, 1961, calling upon him to file returns for the said assessment years. Being aggrieved, the assessee initiated proceedings under article 226 of the Constitution for quashing the said notices. The defence of the Revenue was that the particulars of profits and gains of business had not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt noted that the Income-tax Officer had accepted the original return for making a provisional assessment under section 141 and had levied interest on the basis that the return was actually filed earlier. The court answered the reference in favour of the assessee. (d) Smt. Sova Sarkar v. ITO [1983] 139 ITR 386 (Cal). The facts in this case are more or less similar to the facts in Mohindra Mohan Sirkar's case [1978] 112 ITR 47 (Cal). A Division Bench of this court following the said decision directed that notices issued under section 148 of the Income-tax Act, 1961, on the ground that the original returns were invalid and non-existent, should not be given effect to. The court again made a distinction between a return which was not correct and complete within the meaning of section 139 of the Income-tax Act and a return which was so defective that the same could not be treated as a return at all in law. (e) CIT v. Garia Industries Pvt. Ltd. [1983] 140 ITR 636 (Cal). In this case, the question arose as to the validity of a return submitted by an assessee and whether the Tribunal was justified in holding that the loss should be determined and carried forward for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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