Maneklal Sakarchand Shah vs Commissioner of Income Tax

M.B. Shah, J.—The assessee is an individual earning his income from truck plying. He filed his return on November 17, 1971, for the

assessment year 1971-72. It is not disputed before us that the said return cannot be considered to have been filed u/s 139(1) of the Income Tax

Act, 1961 (""the Act"", for short). It is considered to be a return filed u/s 139(4) of the Act, as it was not filed within the time allowed. The assessee

filed a revised return on March 5, 1974, showing the additional income by disclosing the fact that during the relevant period he had sold his truck.

The Income Tax Officer passed an order on February 7, 1975, and that order was challenged by the assessee before the Appellate Assistant

Commissioner of Income Tax. Before the appellate authority, it was contended that the order passed by the Income Tax Officer was beyond the

prescribed time. The appellate authority rejected the said contention. Aggrieved by the said order of the appellate authority, the assessee preferred

an appeal before the Income Tax Appellate Tribunal. The Tribunal also rejected the said contention.

Thereafter, at the instance of the assessee, the following question is referred for the opinion of this court u/s 256(1) of the Act :

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the revised return filed by the

assessee on March 5, 1974, was a valid return?

At the time of hearing of this matter, learned counsel for the assessee submitted that the Appellate Tribunal was not justified in holding that the

revised return filed by the assessee on March 5, 1974, was a valid return which would extend the period of limitation prescribed for passing an

order on the basis of section 153(1)(c) of the Act. It is his contention that the return u/s 139(4) of the Act was already filed on November 17,

1971, and the assessee was not entitled to file a revised return u/s 139(5) of the Act. He further relied upon Instruction No. 888 issued by the

Central Board of Direct Taxes dated October 1, 1975, which, inter alia, provides as under :

These questions were referred to the Ministry of Law for advice. According to the Ministry of Law, a person who has not filed a return of income

within the time allowed to him under sub-section (1) or sub-section (2) of section 139 of the Act, but files a return of income u/s 139(4) is not

entitled to file a revised return u/s 139(5) of the Act. The Law Ministry has further advised that such a return of income cannot also be taken into

consideration for the purposes of computing the period of limitation u/s 153(1)(c) of the Act. It may, therefore, be noted that the extended time-

limit of one year u/s 153(1)(c) will not be available in respect of a revised return of income purported to have been filed u/s 139(5) where originally

the return was filed u/s 139(4).

He submitted that the aforesaid instruction issued by the Central Board of Direct Taxes is binding on the Income Tax Officer and, therefore, the

assessment order passed by the Income Tax Officer on February 7, 1975, was beyond the time-limit, as it was not passed within the period of

two years from the end of the assessment year in question.

As against this, Mr. Shelat, learned counsel appearing for the Revenue, vehemently submitted that the aforesaid instruction was not at all pointed

out to the authorities below and, therefore, it should be ignored by this court. He also submitted that there is no prohibition under sub-section (4) of

section 139 to the effect that the assessee cannot file a second or revised return after submitting the first return. That is to say, there is no

prohibition on submitting successive returns u/s 139(4) of the Act. Therefore, the assessment order passed by the Income Tax Officer is within

time from the date of submission of the subsequent return filed by the assessee u/s 139(4) of the Act. For this purpose, he relied on the decision of

the Madhya Pradesh High Court in the case of Commissioner of Income Tax Vs. Dr. N. Shrivastava, .

In the case of Commissioner of Income Tax Vs. Dr. N. Shrivastava, the Madhya Pradesh High Court has considered various judgments on this

point and held that since a return under sub-section (4) of section 139 of the Act is a voluntary return, the view that within the period of limitation

prescribed for the purpose, successive returns can be filed, seems to be the correct view. The court has further held that subsequent return or

returns u/s 139(4) are permissible provided they are filed within the period of limitation and in the case of a subsequent or a revised return being

filed, the earlier return gets substituted by the subsequent or revised return and it is the subsequent or the revised return which has to be taken into

consideration for the purposes of assessment and computation of the period of limitation. The starting point of limitation with regard to a return filed

u/s 139(4) of the Act would be the date of the filing of the return and if subsequently return or returns have been filed, the date of the filing of the

last of such of the returns (provided the same had been filed within the period of limitation). We prima facie agree with the aforesaid view

expressed by the Madhya Pradesh High Court, but, at the same time, in this case, in our view, it would not be necessary to decide the aforesaid

question because of the instruction issued by the Central Board of Direct Taxes upon which learned counsel for the assessee places reliance. Since

the effect of the aforesaid instruction has not been considered by the Tribunal, because it was not cited before the Tribunal or the authorities below,

it would be just and proper not to express any final opinion on the question referred to us by the Tribunal. It would be for the Tribunal to decide

the matter afresh in the light of the Instruction No. 888 issued by the Central Board of Direct Taxes and in accordance with law.

In the result, the question is left unanswered. The reference stands disposed of accordingly with no order as to costs.