TMI Blog1981 (2) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, and as the assessee had not filed the return dated March 30, 1965, under either of the above mentioned sub-sections, the return dated March 28, 1966, could not be supported by reference to s. 139(5) of the Act. The assessee preferred an appeal to the AAC. He objected to the finding of the ITO that the return dated March 28, 1966, was an invalid return and claimed that the assessment made by discarding the said return was bad in law. There were also other grounds raised regarding the merits of the assessment. The AAC observed that the assessment order in question was for the assessment year 1960-61, that at the relevant time the Indian I.T. Act, 1922, was in force and that the procedure regarding the filing of the returns in this case would be governed by the said Act. According to the AAC, the revised return filed by the assessee was a valid return in terms of s. 22(3) of the 1922 Act. He was, therefore, of the opinion that the ITO had erred in ignoring the revised return and that the assessment completed by him was not in order. He therefore, set aside the assessment and directed the ITO to take note of the revised return, examine the case properly by giving the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to. Under the 1922 Act, a general notice had to be published by the ITO on or before the 1st of May every year requiring all persons whose total income during the previous year exceeded the maximum amount not chargeable to income-tax to file a return within the specified period. Any assessee falling within the above description had to file such a return either within the time prescribed in the notice or such time as may be granted by way of extension by the ITO. Section 22(2) provided for an individual notice by the ITO to any person whose total income, in the officer's opinion, would render him liable to income-tax. This individual notice again called upon the specific assessee to file a return within a period specified in the notice and such period again could be extended by the ITO. Sub-s. (2A) permitted a person, who had not been served with a notice under sub-s. (2) and who had incurred any business loss during the previous year which could be carried forward to subsequent years, to furnish " within the time specified in the general notice given under sub-section (1) or within such further time as the Income-tax Officer, in any case, may allow " a return showing the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is to be governed by the provisions of the 1922 Act or those of the 1961 Act. As has been mentioned earlier, the AAC took the view that the provisions of the 1922 Act were applicable but the Appellate Tribunal took a contrary view. The view taken by the Tribunal is clearly the correct one. Section 297(2)(b) of the 1961 Act lays down that, where a return of income has been filed by any person, after the commencement of the 1961 Act (otherwise than in pursuance of a notice under s. 34 of the 1922 Act), for the assessment year 1961-62, or any earlier year, the assessment of that person for that year shall be made in accordance with the procedure specified in the 1961 Act. Indeed, this position is not contested by Shri M. L. Verma, learned counsel for the applicant. In view of the above provision, the return filed on March 30, 1965, has to be fitted against the provisions of one or other of the sub-sections of s. 139. Since the return had not been filed within the time contemplated under s. 139(1) or 139(2) or 22(1) or 22(2), and since no extension of time had been asked for or granted, the return dated March 30, 1965, can be treated only as a return filed voluntarily by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pursuant to a notice under s. 22(2) and that even if the return was filed beyond the period prescribed by s. 22(1) and disclosed a loss, the ITO was bound to determine the loss so that it could be carried forward to the following year. The decision of the High Court was affirmed by a three judge Bench of the Supreme Court, Shah J. dissenting. At page 527, the arguments on behalf of the assessee are set out in the following words : " The argument on behalf of the assessee is that section 24(2) confers the right to carry forward the loss to the following year provided the conditions contained in the sub-section are satisfied. There is no further requirement that has to be fulfilled so far as the substantive law is concerned. Section 22(2A) is merely a procedural provision and it also provides that once a return has been furnished in accordance therewith all the provisions of the Act become applicable as if it were a return under sub-section (1). That would attract section 22(3) and, therefore, a voluntary return can be filed even after the period mentioned in sub-section (2A) has expired so long as the assessment has not taken place. " This argument appears to have been accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gical reason why the right of filing a revised return should not also be available where the first return has been filed by the assessee voluntarily under the provisions of sub-s. (4). The argument put forward by the learned counsel is a plausible one but, in our opinion, it cannot be accepted. Taking first the language of the provision, it is seen that s. 139(5) in terms allows an assessee to revise only a return which has been furnished under sub-s. (1) or sub-s. (2). It carefully avoids a reference to s. 139(4) which, it seems to us, is significant considering that the purpose of the Legislature is to permit the assessee to revise a return which he has already filed and the Legislature has just outlined in sub-s. (4) one of the circumstances, in addition to those set out is sub-ss. (1) and (2) in which the assessee could have filed a return. The reference to s. 271(1)(a) does not help because that section deals with the delay in the filing of the return beyond the period contemplated by s. 139(1) or (2) and there can be no question of a delay under s. 139(4). Section 139(3) (which permits the filing of a return of loss) and s. 139(4A) (introduced subsequently specifically prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the return of loss filed " within the time specified in the general notice under sub-s. (1) or within such further time as the Income-tax Officer in any case may allow ". The Supreme Court pointed out that s. 24(2) which was the substantive section that granted the right of set-off was unqualified and that the words used in s. 22(2A) should not be given a narrow and restricted meaning confining them only to returns filed within the time mentioned in sub-s. (1). It was in that context that the court observed that sub-s. (1) and sub-s. (3) of s. 22 had to be read together and that for the purposes of s. 22(2A) a return filed under s. 22(3) can be taken as having been filed within the time prescribed in sub-s. (1). If we bear in mind that it is the old s. 22(3) that has now been split up into s. 139(4) and (5), it should be clear that the observations made by the Supreme Court cannot apply in the context of s. 139(5). We are, therefore, unable to accept the contention of Shri Verma which involves an extension of the principle laid down by the Supreme Court and to evolve a general proposition that a return filed under s. 22(3)/139(4) is, for all purposes, a return filed under s. 22( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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