TMI Blog1992 (4) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... Return filed -- 19-06-1981 (x) Revised return filed was acted upon by the Assessing Officer for the purpose of assessment -- 09-03-1983 (xi) Draft order issued by the Assessing Officer and served on the assessee on -- 30-03-1984 (xii) Final Order of the assessment passed by the Assessing Officer on -- 25-09-1984 2. In grounds of appeal Nos. 1 to 9 the assessee has challenged the action of the learned 1st Appellate Authority in confirming the order of the Assessing Officer having been passed within the period of limitation specified in the Act. 3. Two alternative contentions have been taken up by Shri K. Shivram, learned counsel for the assessee in regard to the ground that the assessment has framed by the Assessing Officer is time barred. 4. The first contention is that the return filed on 9-3-1983 was not a revised return under section 139(5) and, therefore, the benefit of the extended time limit under section 153(1)(c) was not available to the Assessing Officer. It was submitted that a revised return under section 139(5) could be filed only if the assessee had furnished a return under section 139(1) or section 139(2), but in the instant case, the return which was vol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 139(4) must be regarded as a filing of a return under section 139(1) or, as the case may be, under section 139(2). In this view of the matter it was pleaded that a return under sub-section 4 really takes the character of a return under sub-section (2) wherever the assessee has been required to submit the return but has delayed furnishing the same. Accordingly it was submitted that the extended period of limitation was available to the Assessing Officer. For this proposition reliance was placed on the decision of Hon'ble Calcutta High Court in Kumar Jagadish Chandra Sinha v. CIT [1982] 137 ITR 722, Balish Singh Co. v. CIT [1987] 165 ITR 575, CIT v. Dr. N. Shrivastava [1988] 170 ITR 556, (MP) and Nanjappa Textiles v. CIT [1985] 153 ITR 109 (Mad.). It was however, conceded by Shri A. Mansukhani, departmental representative, as well as Shri K. Shivram, learned counsel for the assessee that there is no direct decision of the Honble Bombay High Court on this issue. With regard to the second contention of Shri K. Shivram, learned counsel for the assessee, Shri A. Mansukhani, learned D.R. submitted that the draft assessment order in this case was passed on 30-3-1984 which was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Full Bench decision of the Hon'ble Punjab Haryana High Court in Nandlal Sohanlal v. CIT [1977] 110 ITR 170--At page 211 wherein Hon'ble Shri Justice O. Chinnappa Reddy, as he then was have observed that a Judge faced with a conflict of precedent should not abdicate his judgment and accept the view which is favourable to the assessee. It is only where a Judge finds that two equally reasonable views are possible and he is unable to decide which is the better view, that he may adopt the rule of interpretation that the view favourable to the assessee might be accepted. In this case as chronological dates recorded in para one of this order clearly indicate that the assessee had in the first place repudiated its original return filed on 19-6-1981 and characterised it as not being a return under section 139(2) although it was filed in response to a notice under section 139(2). Secondly, the assessee while he had filed revised return on 9-3-1983 in supersession of its earlier return dated 19-6-1981, nevertheless has taken a stand that it is not a revised return under section 139(5).The audiciousness of the stand on the part of the assessee, however, should not deter us from going into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh wherever else, as it some times happens, he looks for and achieves it. Thus, we will hold that the revised return filed by the assessee on 9-3-1983 was a valid return under section 139(5). Coming to the alternative contention of the assessee that even if the revised return is considered as a valid return the assessment having been finally framed on 25-9-1984 is still beyond the period of limitation as available under section 144(B), we are of the opinion, that the extended time of limitation is available to the Assessing Officer under section 153(b). In this case the ITO had given a finding with regard to the initiation of penalty proceedings under section 271(1)(c) in the draft assessment order passed on 30-3-1984. Under section 153(1) three time limits are prescribed. In the instant case on the application of section 153 the three expiry dates would be : (i) 31-3-1983 being expiry of two years from the end of the assessment year in which the income was first assessable under section 153(1)(a), (ii) 31-3-1989 being the expiry of 8 years period under clause (b), and (iii) 30-3-1984 being the expiry of one year period from the date of the revised return as extended by a fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were partners. SRFD by an agreement dated 5-9-1977 with Balaji Pictures (BP) became the distributors of picture in respect of Bombay territory and the consideration therefor was a total hire amount of Rs. 10 lacs payable before release of the picture. The picture was released on 27-4-1979. In the accounts of SRFD for the year ending 31-3-1980 the entire hire amount of Rs. 10 lacs had been debited but to the extent of Rs. 5 lacs the credit had been given to an account titled "Shri Jatin Khanna Account Janata Havaldar". The return of income in the case of SRFD for the assessment year 1980-81 had also been filed treating the entire sum of Rs. 10 lacs as expenditure relating to the distribution of the picture Janata Havaldar. In the case of the assessee, when asked as to why no remuneration in respect of Janata Havaldar had been shown, though as per the relative agreement a sum of Rs. 5 lacs was receivable by the assessee on the release of the picture and the picture having been released during the accounting year, the assessee came up with the explanation that no remuneration had, in fact, been received and as the accounts were being kept on cash basis, no income was shown. It was ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n brought to the notice of the ITO assessing SRFD. It is a fact that the entire sum of Rs. 10 lacs was claimed as the cost of acquisition by SRFD. Even if SRFD was adopting mercantile system of accounting, if the contention that there was an agreement between the assessee and SRFD was correct, SRFD could have taken into account such cost only as what was payable. In these circumstances, there is every reason to believe that the agreement between the assessee and SRFD was something which was made up only for the purposes of explaining away to the Assessing Officer as to why the assessee had not shown the remuneration due from Balaji Production. A perusal of the agreement as reproduced in para 2.4 of the order of the learned 1st Appellate Authority which is in the form of a letter does not indicate that the amount of Rs. 5 lacs would become payable to the assessee only if there was realisation after meeting all other outgoings. The entries made in the books of accounts of SRFD in which the assessee is a partner clearly indicate that the crediting of his account in the books of SRFD was in fact a constructive receipt by him. Thus, for the reasons given in para 2.3 to 2.5 of the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X
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