S.P. Gramophone Co. vs Income Tax Appellate Tribunal

S.P. Goyal, J.—The assessee filed its first return on 26-11-1963 showing an income of Rs. 1,12,693. A revised return was filed on 22-3-1968 and on its basis, the ITO completed the assessment on 19-3-1969. Having failed in appeal before the AAC against the said assessment, it took the matter to the Tribunal who set aside the same and remanded the case for refraining the assessment according to the directions contained in its order. Accordingly, the ITO made reassessment on 27-3-1982. Its validity was challenged in appeal on the ground that the initial assessment completed on 19-3-1969 was barred by time. Having failed the assessee again approached the Tribunal. The principal argument raised there was that the initial return itself having been filed under sub-section (4) of section 139 of the income tax Act, 1961 (''the Act'') no revised return could be filed under sub-section (5). The Tribunal did not accept the plea that the revised return could not be filed but the main reason given by it was that after the remand, the assessing authority could not allow any point to be taken beyond the remand order and the assessment has to be framed in accordance therewith. The assessee then moved an application u/s 256(1) of the Act which was also declined. He then filed this petition u/s 256(2) for a mandamus to get the following four questions referred to this Court:

Whether, on the facts and in the circumstances of the case, the Tribunal was justified in not allowing to raise the plea that the reassessment framed by the ITO in pursuance of the direction of the Tribunal, was time-barred?

Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the plea of the time-barred could not be raised in reassessment proceedings taken in pursuance to the order of the Tribunal, who had set aside the assessment?

Whether, on the facts and in the circumstances of the case, the return of income filed for the assessment year 1963-64 on 26-11-1963 was a return u/s 139(4) of the income tax Act, 1961, which could not be revised u/s 139(5)?

Whether, on the facts and in the circumstances of the case, the revised return of income filed on 22-3-1968 could extend the period of limitation as provided u/s 153(1)(c) of the income tax Act and the assessment made by the income tax Officer vide his orders dated 27-3-1982 is time-barred?

A bare perusal of the four questions would show that in fact the points involved are only two, namely, as to whether it was open to the assessee to raise the point of limitation against the original assessment after the remand and whether the original assessment framed on 19-3-1969 was barred by time. It is not disputed that against the original assessment the plea that it was barred by limitation was raised before the appellate authority and was turned down. Before the Tribunal the assessee never took up this point and the same, therefore, stood concluded by the remand order. After the remand, the assessing authority had to frame the assessment in accordance with the remand order and could not take up any point beyond its scope. If the correctness of the remand order is not challenged through appropriate proceedings, as held by the Supreme Court in Nain Singh Vs. Koonwarjee and Others, , it would not be open to review when the matter comes again before that authority in appeal or revision against the order passed by the authorities below in accordance with the remand order. It would, therefore, be futile to get this question referred even though it may be a question of law. On the second point again, there is no material on the record to show that the original return dated 26-11-1963 was filed under sub-section (4) and not sub-section (5) of section 139. The ITO has recorded a firm finding that the said return was filed under sub-section (1) or sub-section (2) of section 139. The AAC, on the contrary, observed that the return had been filed u/s 139(4). The Tribunal, as noticed above, did not accept the contention of the assessee that the original return could not be revised which necessarily means that they did not agree with the stand of the assessee that the same was filed u/s 139(4). The question as to under what provision the original return was filed being one of fact, the finding of the Tribunal would be binding on this Court. Once, this finding is accepted, it could not be disputed that the assessment made on 19-3-1969 was well within time. No question of law on the point of limitation would, therefore, arise on the findings recorded by the Tribunal.

For the reasons recorded above, this petition fails and is hereby dismissed leaving the parties to bear their own costs.