2004 Supreme(Cal) 779

High Court Of Calcutta
D. K. SETH, RAJENDRA NATH SINHA
KALYANPUR CEMENT LTD. - Appellant
Versus
JOINT COMMISSIONER OF INCOME TAX - Respondent
IT Appeal 146  Of  1999
Decided On : 12/21/2004

The second revised return filed after the intimation is a valid return and the AO is required to consider the second revised return filed on 7th January 1991 and proceed in accordance with Section 143(1) or Sub-section (1a) or Sub-section (1b), as the case may be.

Headnote:

INCOME TAX ACT, 1961 - SECTION 139(1), 139(5), 143(1), 143(1a), 143(1b), 143(2), 143(3), 32(2) - REVISED RETURN - VALIDITY - CARRY FORWARD OF UNABSORBED DEPRECIATION - WHETHER SECOND REVISED RETURN FILED UNDER SECTION 139(5) IS VALID AND WHETHER AO IS OBLIGED TO ADJUST THE DEMAND MADE UNDER SECTION 143(1)(A) RAISED ON THE BASIS OF THE EARLIER RETURNS.

Fact of the Case:

The assessee filed a return under Section 139(1) of the IT Act, 1961 covering a period of 21 months from 1st July 1987 to 31st March 1989. A revised return (first revised return) was filed on 30th March 1990. On 19th September 1990, the AO issued an intimation under Section 143(1)(a) accepting the revised return and reducing the amount of loss as claimed while levying additional tax under Section 143(1)(a). The assessee applied for rectification of the said order dt. 19th September 1990 under Section 154 on 20th October 1990 claiming carry forward of earlier years' loss and unabsorbed depreciation. This application for rectification was rejected on the ground that neither in the original return nor in the revised return any claim for carry forward of earlier years' loss or depreciation was made. On 7th January 1991, a revised return (second revised return), claiming carry forward of earlier years' loss and unabsorbed depreciation, was filed.

Finding of the Court:

The court held that the second revised return filed after the intimation is a valid return. The court also held that the AO was required to consider the second revised return filed on 7th January 1991 and proceed in accordance with Section 143(1) or Sub-section (1a) or Sub-section (1b), as the case may be. In this case, since the revised return has been filed after the intimation within the-time and validly, therefore, now the assessment is to be made under Sub-section (1b) of Section 143.

Issues: 1. Whether, when a second revised return was filed under Section 139 (5) of the Act within the specified period of one year from the end of the relevant assessment order (year), the AO is obliged to adjust the demand made under Section 143 (1) (a) raised on the basis of the earlier returns and whether the Tribunal is justified in law in deciding the case without considering the legal position? 2. Whether, in view of the fact that the petitioner had filed a revised return on 7th Jan. 1991 claiming a loss of Rs. 2,49,05,044 and carry forward the loss of unabsorbed depreciation of Rs. 6,26,26,557 the Tribunal without deciding the question as to whether there was any reduction of loss consequent upon the filing of the second revised return on 7th Jan. 1991 could send the matter back when there was no dispute regarding the carry forward unabsorbed depreciation of a sum of Rs. 6,26,26,557?

Ratio Decidendi: 1. Section 139(5) permits furnishing of revised return within the relevant assessment year or before the completion of the assessment, whichever is earlier provided he has furnished a return either under Section 139(1) or in pursuance of the notice issued under Section 142(1). 2. Section 143 postulates under Sub-section (1) to accept the return as submitted either under Sub-section (1) or Sub-section (1a) or Sub-section (1b) or to issue a notice under Sub-section (2) in such situation contemplated in that sub-section and then to assess under Sub-section (3) of Section 143. 3. The provision of Sub-section (1b) of Section 143 clearly indicates that an intimation is not an assessment within the meaning; of Sub-section (5) of Section 139. 4. In such a circumstances, the learned Tribunal was wrong in holding that the issue stands covered against the assessee by reason of the discussion made in the order on account of amendment of Section 143 (3) w. e. f. 1st April, 1989 or that the only question to be decided with regard to the enhancement of the figure by reason of the first revised return with regard to the loss claimed.

Final Decision: The court set aside the order of the Tribunal and all consequential orders and remanded the case for being assessed by the AO afresh on the basis of the second revised return in the light of the observation made above in accordance with law in terms of Section 143(1b).