TMI Blog1997 (6) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... 989 was not a valid revised return in view of the Hon'ble Rajasthan High Court (decision) in the case of Vimalchand v. CIT [1985] 155 ITR 593 and Kerala High Court in the case of Eapen Joseph v. CIT [1987] 168 ITR 26 and, hence, no valued assessment order could be passed; 5. That the learned CIT(Appeals)--VI has further wrong in not giving any finding that the assessment order alleged to have been passed on 27-3-1990 was not passed within the time allowed under the Statute; 6. That without prejudice to above, the CIT(Appeals)--VI should have held that although the order is alleged to have been passed on 27-3-1990, it was served on the appellant only on 19-6-1990 and the appellant has reason to believe that it was not passed within the limitation period." 6. Before the CIT(Appeals) the assessee raised a ground that the assessment order made by the Assessing Officer was illegal and bad in law inasmuch as the assessment was not competed within the time prescribed by the Income-tax Act. The CIT(Appeals) verified the assessment record and found that the assessment was completed on 27-3-1990 and the notice of demand was also dated 27-3-1990. He, therefore, concluded that it was a f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect, the extended period of 8 years in the case of concealment of income was also not available to the Assessing Officer. In order to support his contention, the learned counsel for the assessee placed further reliance on the following decisions: (1) M.B. Mercantile Co. v. CIT [1988] 169 ITR 201/[1987] 35 Taxman 169 (Cal.), (2) Smt. Savitri Rani Malik v. CIT [1990] 186 ITR 701 (Gauhati), (3) CIT v. Dr. G.K. Pendkar [1993] 202 ITR 698 (Bom.). The learned counsel further contended that even the limitation of one year had expired on 26-3-1990 as the assessment order was passed on 27-3-1990 and, therefore, it was barred by limitation by one day. In order to support this contention, he placed reliance on the Allahabad High Court decision in the case of Niranjan Lal Ram Chandra v. CIT [1982] 134 ITR 352. 9. The learned Departmental Representative (DR), on the other hand, submitted that a notice under section 139(2) was issued on 20-1-1987 and the return was filed on 27-1-1987 and, therefore, this return should be treated as a return filed under section 139(2). According to him, since the return so filed was a return under section 139(5), the assessee could file a revised retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch 11, 1981 and the assessment order was passed on November 23, 1981, it was held that the assessment was not barred by limitation. 12. On the basis of these contentions and arguments as well as submissions, the learned DR urged that the assessment made on the facts and circumstances of the present case should be declared to have been made within the period of limitation. 13. In reply, the learned counsel for the assessee submitted that the return filed on 27-1-1987 cannot be treated as return under section 139(2) as the notice under section 139(2) was served on the assessee on 10-2-1987 and the assessee was asked to furnish the return within 30 days of the date of receipt of the notice. According to the learned counsel, the Assessing Officer had accepted there turn as revised return and, therefore, it was not a rectified return as the figures were revised. Therefore, the contention of the learned DR is not correct. He further relied on the Allahabad High Court decision in the case of Niranjan Lal Ram Chandra and submitted that the limitation for making assessment has to be counted form the date on which the second revised return is filed and in that case as the revised retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication of the asst. records, it is found that the assessment has been completed on 27-3-1990. The notice of demand is also dated 27-3-1990. Therefore, it is fact on record that the asst. has been completed in time. Therefore, this ground is rejected. " It is noticed from the finding of the CIT(Appeals) that he decided the issue without going into the details and hazards of computation of limitation and the relevant provisions of the law dealing with the period of limitation prescribed for finalising the assessment. 16. In view of this as well as in order to appreciate the relevant facts and the relevant provisions of the law correctly, we frame the issues as under in the form of three questions : (i) Whether, the original return filed on 27-1-1987 is a return under section 139(2) or (4) and What is its effect on the period of limitation ? (ii) Whether, the revised return filed on 27-3-1989 is a valid return under sub-section (2), (4) or (5) of section 139 ? If yes, its effect on limitation ? (iii) Whether, the assessment for the year 1986-87 completed on 27-3-1990 is barred by limitation ? If yes, under which section, i.e., under section 153(1)(a), (b) or (c) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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. (5) If any person having furnished a return under sub-section (1) or sub-section (2), discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the assessment is made." 17. The relevant portion of section 153(1) is extracted and reproduced as under : "153. Time-limit for completion of assessments and reassessments.---(1) No order of assessment shall be made under section 143 or section 144 at any time after--- (a) the expiry of---- (i) four years from the end of the assessment year in which the income was first assessable, where such assessment year is an assessment year commencing on or before the 1st day of April, 1967 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to whether the revised return filed on 27-3 -1989 is a valid return under section 139(2), (4) and (5) and if yes what is its effect on limitation for completing the assessment, at the outset itself, we may say that once we have taken a decision, respectfully following the decision of the Hon'ble Supreme Court in the case of Kumar Jagdish Chandra Sinha, that the revised return is an invalid return, it is a futile exercise and repetition of the subject already dealt with. But, in our opinion, it is necessary to say so in order to meet the arguments and contentions of both the parties. The first contention of the revenue is that the revised return filed by the assessee on 27-3-1989 may be treated as a return under section 139(2), as notice under section 139(2) was already issued on 20-1-1987 and served on the assessee on 10-2-1987, i.e., before the revised return was filed. The assessee's contention is that as this return was not filed within 30 days from the date of service of notice under section 139(2) and it was filed long after that date, it cannot be treated as a return under section 139(2). The second contention of the assessee is that the Assessing Officer has already treated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that the assessment was not barred by limitation." In this view of the matter if the Assessing Officer has acted upon such return without any objection from the assessee it would not be open to the assessee to challenge and contend later that the return filed subsequently was invalid. Our view gets support from the Calcutta High Court decision in the case of Mst. Zulekha Begu (Khatoon) v. CIT [1981] 129 ITR 560 wherein at pages 568-569, it was observed as under : At page 568 : "On a consideration of the sections and the decisions cited it appears to us that it an assessee after having filed a return under section 139(4) files another return subsequently it is to be assumed that he has given a go-by to the return filed previously and that so far as he is concerned the return filed subsequently is the correct and proper return. Where the ITO accepts the return filed subsequently, allows it to be filed and proceeds to assess thereunder without any objection from the assessee, it would not be open to the assessee to contend later that the return filed subsequently was invalid." At page 569 : "For the above reasons, we hold that the subsequent return filed by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as prescribed in section 153(1)(b) was available to the Assessing Officer, the assessment was not barred by limitation. No doubt it is case covered by the provisions of section 271(1)(c), as it is evident from last para of page 2 of the assessment order and from last but one para of the assessment order, wherein the Assessing Officer has very clearly recorded that the penalty for concealment and bogus loss was initiated under section 271(1)(c). The assessee, on the other hand, placed reliance on the following decisions and contended that as the Assessing Officer did not initiate the penalty proceedings under section 271(1)(c) before 31st March, 1989 and did not record his finding to that effect the extended period of 8 years was not available to him: 1. M.B. Mercantile Co.'s case : wherein it was held that before expiry of normal period of limitation, the ITO should record facts regarding concealment supported by the materials on record. 2. Smt. Savitri Rani Malik's case : wherein it was held that the assessee must be informed about the discovery of concealment of income within the normal period of limitation. 3. Dr. G.K. Pendkar's case : wherein it was held "where the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m and, therefore, the assessment made by him on 27-3-1990 is barred by limitation under section 153(1)(b) also. 28. The third limitation period as envisaged in section 153(1)(c) is of one year from the date of filing of the return or revised return under sub-section (4) or (5) of section 139. As we have already held that there was no valid revised return under section 139(5), we confine our discussion to the return filed under section 139(4) only as discussed above. As the latest one is to be considered, we find that the second return under section 139(4) was filed on 27-3-1989 and the period of one year expired on 26-3-1990. As the period of one year expired on 26-3-1990 and the assessment was completed on 27-3-1990, it is barred by limitation. In our opinion, the contention of the learned DR that the limitation expired on 27-3-1990 does not hold good. 29. In the case of Niranjan Lal Ram Chandra, where the second revised return was filed on 8-2-1972, it was held by the Allahabad High Court that the time for completion of assessment was extended up to 7-2-1973 only. Respectfully following this decision, we hold that the assessment completed in the present case on 27-3-1990 is b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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