Income Tax Appellate Tribunal - Delhi
A.K. Mukherjee vs Wealth-Tax Officer on 28 January, 1987
Equivalent citations: [1987]20ITD113(DELHI)
ORDER
H.S. Ahluwalia, Judicial Member
1. These eleven appeals are by the same assessee and involve some common questions. They are, therefore, disposed of by this single order. The main dispute involved in these appeals is the validity of assessments for the first eleven years, i.e,. 1964-65 to 1974-75. Returns for the first five years were filed by the assessee on 1-4-1969 and for the later years were initially filed on 6-10-1969, 24-8-1976, 16-9-1971, 29-8-1972, 16-8-1973 and 29-6-1974, respectively. Revised returns for all these years were filed on 26-3-1979. The WTO initially completed the assessments on 31-3-1979 in the status of a HUF in place of an individual in which status the returns were filed. Assessment was quashed by the AAC following the decision of the Rajasthan High Court in CWT v. Ridhkaran [1972] 84 ITR 705. According to the ITO, the returns filed on 26-3-1979 became pending since the time limit prescribed by Section 17A of the Wealth-tax Act, 1957 ('the Act') had not expired. The WTO, therefore, proceeded on under Section 16(2) of the Act in response to which the assessee's objection was that the WTO had no jurisdiction to assess again on returns which had already been considered, assessed and disposed of. It was also contended that the returns of net wealth filed by the assessee were not under Section 14 of the Act and so the belated returns filed on 26-3-1979 were not legally revised returns, but merely belated returns and the period of one year could not be extended beyond 31-3-1979. The WTO was, however, of the opinion that the time limit for completion of the assessment laid down by Section 17A(2) was one year from the date of filing of a return or the revised return under Section 15 of the Act. Section 15 permitted an assessee to file a return or a revised return at any time before the assessment was made. Section 17A(1) covered cases of both a return or a revised return. Therefore, the assessments could be made within one year of the date of filing these returns which was done on 26-3-1979. He, therefore, passed the assessment orders on 17-3-1980. This objection of the assessee as to the limitation has also been overruled by the AAC on appeals filed by the assessee. The assessee has consequently come up in second appeals before us.
2. There are some other grounds raised on merits against the order of the AAC, namely, the AAC's failure in not giving exemption in respect of value of shares at Rs. 9,500, the AAC's not giving deduction under Section 5(1)(iv) of the Act and the AAC's not granting a reduction of 10 per cent out of market value owing to the big size of the property held. We have heard the representatives of the parties at length in these appeals. So far as the main issue is concerned, the representative of the assessee drew an analogy from the corresponding provision of the Income-tax Act, 1961 ('the 1961 Act') laid down in Section 139. According to him, a revised return under Section 139(5) could be filed only if the original return had been filed under Sub-section (1) or Sub-section (2) thereof. But a return filed under Sub-section (4) which contemplated its filing beyond the period prescribed by Section 139(1) and in the absence of a notice under Section 139(2), could not be revised under Sub-section (5) so as to give a fresh period of limitation for making the assessment. In support thereof, he relied upon several decisions, namely, O.P. Malhotra v.CIT [1981] 129 1TR 379 (Delhi), Dr. S.B. Bhargava v. CIT [1982] 136 ITR 559 (All.), the decision of the Special Bench of the Tribunal in ITO v. Bohra Film Finance [1983] 4 ITD 247 (Jp.) and the decision of the Rajasthan High Court in Vimalchand v. CIT [1985] 155 ITR 593. According to him, since the original returns in respect of all the years except 1974-75 were not filed within the period prescribed by Section 14(1) nor were they filed in response to any notice issued under Section 14(2), they were returns under Section 15 of the Act and on the analogy of the cases above referred to, they could not be revised. Reliance was placed upor Ridhkaran's case (supra) for the proposition that the provisions of the 1961 Act and the 1957 Act should be construed harmoniously and a similar interpretation be placed on them.
3. After carefully considering all the facts and circumstances of the case, we are afraid we are not inclined to agree with him over this contention. Of course, there is a divergence of authorities on the subject. There are the Calcutta High Court Judgments in Mst. Zulekha Begum v. CIT [1981] 129 ITR 560 and Kumar Jagadish Chandra Singh v. CIT [1982] 137 ITR 722 to the contrary. Therefore, it is a question of choice as to what view we should take in the matter. However, in view of this controversy, a Special Bench of the Tribunal decided the issue at Jaipur itself in Bohra Film Finance's case (supra). It would be relevant to reproduce some of the observations from this decision of the Special Bench, which read as under:
... However, we do not want to dilate on this aspect as that is not the question directly before us though perhaps the authorities do support the view that successive revised returns under Section 139(5) can be filed. Then the other question that arose is whether the return filed under Section 139(4) can be corrected and another return under Section 139(4) be filed. There may be two views on this. No doubt the Calcutta High Court has stated that even the return under Section 139(4) can be corrected under Section 139(5) but since we do not want to adopt that view, we proceed to discuss this aspect on the basis that a return under Section 139(4) cannot be revised under Section 139(5). All the same whether another return under Section 139(4) again can be filed or not is the question. This is where we want to say that there can be possibly two views. One view is that there can be successive returns filed under Section 139(4) but subject to the limit prescribed under Section 153 for completing the assessment. This view is fully supported by the observations of the Delhi High Court in Malhotra's case (supra). Now take for instance this very case. The assessee could file another return under Section 139(4) as long as the period for completing the assessment under Section 153 is not completed. The other view may be that so far as the return under Section 139(4) is concerned, there can be no subsequent return under Section 139(4). To hold that there should not be any subsequent return under Section 139(4) even within the period of limitation is not warranted by the scheme of the Act. If such a view is taken it will lead to practical difficulties. If an assessee, who has filed a return under Section 139(4) finds an obvious mistake or omission which is not intended cannot correct it by filing another return under Section 139(4) within the period prescribed. We do not think that the Legislature intended such a situation to arise. It is therefore proper to hold that successive returns under Section 139(4) can be filed so long as they are ultimately within the prescribed time.
While differing with the view taken by the Calcutta High Court, our learned brothers themselves were of the opinion that there could be successive returns filed under Section 139(4). They also observed that the assessee could file another return under Section 139(4) as long as the period for completing the assessment under Section 153 had not expired. They also observed that to hold that there should not be any subsequent return under Section 139(4) even within the period of limitation was not warranted by the scheme of the Act. An assessee who had filed the return under Section 139(4) could correct it by filing another return under Section 139(4) within the period prescribed. This would not be an invalid return. The only thing that the Special Bench, therefore, decided was that when the time limit for making the assessment had already expired, there could be no assessment and, therefore, the assessee could not file a return under Section 139(4). Any revised return filed by the assessee after that period would be an invalid return. If a return is invalid, naturally the ITO would not get any period of limitation from the filing of such a return. But as long as the returns were within the period within which an assessment could be made and a return filed according to law, naturally these will be valid either as returns or as revised returns and, therefore, to that extent the ITO would be at liberty to treat such returns and make assessment within the prescribed period of limitation. The Special Bench never decided anything beyond that.
4. Coming to the Rajasthan High Court decision in Vimalchand's case (supra) the previous year had ended on 31-10-1970. The returns were, therefore, to be filed by 30-3-1971. No notice under Section 139(2) was issued. The first return filed was on 11-3-1974. The assessment of the firm was made on 10-10-1974. One of the partners had filed a return on 29-1-1971. Subsequently another return was filed on 13-3-1974. This assessment was completed on 6-11-1974. The assessee filed the first return on 29-8-1971. The alleged revised return was filed on 13-3-1974. The assessment was completed on 6-11-1974. The AAC held that the returns filed by the assessee were no returns in the eye of law and because the period of limitation could not be extended by filing the returns under Section 139(5) which period had already expired before the last return was filed. It was for this reason that the assessments completed beyond the time were held to be a nullity and that is all the Hon'ble High Courts approved. Now in the present case, prior to the insertion of Section 17A there was no time limit for the filing of the returns or for making the assessments so that the original returns or the revised returns could be filed at any time before the assessment. Consequently, the assessment could be made at any time. Section 17A was inserted by the Taxation Laws (Amendment) Act, 1975 with effect from 1-1-1976. This for the first time laid down the period of limitation for making the assessments. In respect of assessment years earlier to those commencing on 1-4-1975, the period prescribed was one year from the date of filing of the return or a revised return under Section 15 of the Act. Now for the purpose of filing a return under Section 15 before 1-4-1976, there was no limitation and, therefore, returns or revised returns could be filed under Section 15 at any time. The analogy of the Income-tax Act would, therefore, not straightaway apply to cases under the Wealth-tax Act because under Sub-section 139(5), a return filed under Sub-section (1) or (2) only can be revised. Even under the language of that section, the Special Bench has held that a return filed under Sub-section (4) could be revised, provided there was still a period available for filing a return. In the Act, there is no express prohibition against revising a return under Section 15. Therefore, on the analogy of this Special Bench pointed out above, even if we were to interpret the provisions of the Act in pari materia with the Income-tax Act, a return filed under Section 15 could be revised at any time provided there was still limitation for filing another return under Section 15. Since no assessment had been completed in respect of any of these returns, therefore, the period of limitation for filing a return for all the years prior to 1-4-1975 was 4 years, i.e., up to 31-3-1979. Therefore, a return or a revised return could be filed at any time before 31st March and that return was not invalid. If it was valid, obviously an assessment could be made thereon within one year from the date of filing of the return.
5. This apart, at present we are considering the technical provisions barring an assessment. It is a well established principle of law that rules of limitation since they seek to deprive the parties from their rights, should be interpreted strictly and ordinarily the right of a party to have a redress should not be taken away unless the law expressly provides for that. Now for the delay of filing of the returns or the revised returns, it is not the WTO who is to blame. At that time there was no law of limitation for making assessments. It is the assessee who failed to file the returns of the earlier years in time and delayed them. Even after filing the returns, there were other technical objections; such as, the status of then assessee, etc., over which the matter had to go to the appellate authorities. It is the assessee who ultimately filed the revised returns on 26-3-1979. If the revised returns were not taken into consideration by the WTO, the assessee would have a legitimate grudge that his allegations were not looked into. If the WTO proceeded on to look into them, naturally, it would not be possible for him to complete the assessments by 31-3-1979 which according to the assessee would be the last date for making valid assessments. The fact that the WTO has looked into the later returns and made assessments within one year from the filing thereof, clearly shows that the intention of the WTO was to proceed in accordance with the purpose and the intent of the Act. Under Section 42C of the Act, no return of wealth, assessment, notice, summons or other proceeding furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of wealth, assessment, notice, summons or other proceeding if such return of wealth, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act. Therefore, unless it is found that there has been a deliberate departure from the provisions, the law should lean in favour of validity rather than the invalidity of the proceedings. As we have pointed out above, the Rajasthan High Court judgment does not directly cover the issue apart from the fact that there is no such provision corresponding to Section 139(4) of the Income-tax Act under the Wealth-tax Act. The assessments have been made on returns filed by the assessee himself. Therefore, it would be adding insult to the injury done to the department by the assessee who has delayed the return and then revised them to hold that the assessee cannot be assessed merely because of the delay, particularly when he has been responsible for all the delays. Strict rules of interpretation which previously were to the effect that where true interpretations of a statute are possible, the one in favour of the assessee should be accepted, have already been given a go by the Superior Courts. In this behalf, we may refer to the famous decision of the Hon'ble Supreme Court in McDowell & Co. Ltd. v. CTO [1985] 154 ITR 148, Distributors (Baroda) (P.) Ltd. v. Union of India, Workmen of Associated Rubber Industries Ltd. v. Associated Rubber Industry Ltd. [1986] 157 ITR 77 the Full Bench Decision of the Patna High Court in CIT v. Sheo Kumari Debi [1986J157 ITR 13 is also relevant. All these authorities have set up a trend that the true intention of law should be ascertained and the interpretation should be taken which prevents evasion of law. We, therefore, overrule the preliminary objection.
6. Coming to the merits, we find that although the exemption of the value of shares was not claimed by the assessee before the AAC, the shares are obviously exempt up to certain limits under Clause (xxiii) of Section 5(1) of the Act. Even if the assessee has failed to do so, we do not want to stand in his way inasmuch as it is the function of the taxation authorities to grant due exemptions if the assessees are ignorant of the rules. Similarly, so far as the claim under Section 5(1)(iv) is concerned, for some years, the claim has to be allowed straightaway and for some years it has to be allowed if the house property was actually occupied by the assessee. The claim has not been duly considered. We direct that the WTO shall allow the claim accordingly. However, as regards the last ground, namely, 10 per cent deduction on account of big size, the figures taken by the Valuation Officer have already been disturbed by the AAC who has proceeded on to estimate the value in accordance with the rental method. Now Rule 1BB of the Wealth-tax Rules, 1957 ('the Rules'), which prescribed valuation of the properties by rental method does not provide for any further deduction for joint ownership for big size of the property. Therefore, on this account, the assessee is not entitled to succeed.
7. In 1968-69 onwards, there is another ground by the assessee that the AAC had erred in upholding addition of Rs. 1,04,805 on account of jagir compensation which amount was not in existence since the sum received bad already been spent in the year 1966-67. Before the AAC, the contention was that this amount had been invested in the firm Harish Vyas & Co. and photostat copies of certificates were produced to show the payment of various amounts to this concern. The AAC rejected this contention on the ground that the counsel was unable to produce a copy of the assessee's account in that concern from the assessment year 1966-67 onwards. The assessee was also unable to lead any evidence in support of the contention that the money has been lost in the same year. Even in income-tax proceedings, there was no claim that the money had been considered as a bad debt. He, therefore, rejected the assessee's claim regarding sale of jagir bonds for all these years. To our mind, the assessee has already died and his legal representatives may not be in possession of all the material. We have already upheld the validity of belated assessments. Because of this delay if the assessee has not been able to procure the proper evidence, the matter should be decided on whatever evidence is available. We, therefore, direct that the WTO shall look into the matter afresh and try to ascertain as to what happened to the jagir compensation and grant appropriate relief in the year in which it is due.
8. In the result, the appeals are partly allowed as above.
A. Kalyanasundharam, Accountant Member
1. I have had the benefit of going through the order passed by my learned brother. I am not able to appreciate the conclusion arrived at by him on the issue of belated return filed would have the effect of extending the time beyond the limit prescribed under the statute. In the Income-tax Act, Section 139(4) talks of a return filed by an assessee which is not under Section 139(1) or 139(2) or in pursuance to notice under Section 139(2). Section 139(5) provides for revising of a return which has been filed under Section 139(1) or in pursuance to a notice under Section 139(2). Under Section 139(4) time limit has been provided in filing of the return and accordingly an assessee who had not filed his return under Section 139(1) or in pursuance to notice under Section 139(2) can file the return within a period of two years from the end of the assessment year in which the return was originally due. Section 153(1) provides the time limit for completion of an assessment. According to this section, the normal time limit for completion of an assessment is two years from the end of the assessment year in which the return was originally due. Sub-clause (c) of Section 153(1) provides an extension of one year for completion of an assessment in cases where a return is filed under Section 139(4) or a revised return is filed under Section 139(5).
2. In Wealth-tax Act, Section 15 has been so provided to be on a similar line as of Section 139(4) and 139(5) of the Income-tax Act. The title to Section 15 has been given as 'Return after due date and amendment of return'. Section 15 reads as under:
If any person has not furnished a return within the time allowed under Section 14, or having furnished a return under that section discovers any omission or a wrong statement therein, he may furnish a return or a revised return, as the case may be, at any time before the assessment is made.
To my mind Section 15 should be read as given below to appreciate the intention of the Legislature:
If any person has not furnished a return within time limit under Section 14, he may furnish a return at any time before the assessment is made ; and If any person having furnished a return under Section 14 discovers any omission or a wrong statement therein, he may furnish a revised return at any time before the assessment is made.
This has to be read as mentioned above for the reason that there would otherwise be no purpose served by the insertion of the words 'as the case may be'. Section 17A provided the time limit for completion of the assessment which is akin to Section 153 of the Income-tax Act. Clause (b) of Section 153(1) provides that the normal time limit for completion of an assessment of wealth would be four years from the end of the assessment year in which the return was to be filed. It further provides that the time limit so provided would be taken to be one year from the date of filing of a return or a revised return under Section 15.
3. According to my learned brother, a person who had filed his return belatedly, i.e., beyond the time limit prescribed under Section 14(1) or 14(2), i.e., under Section 15, he is also entitled to file a revised return. He has reproduced the observations of the Special Bench in the case of Bohra Film Finance (supra). Certain observations at pages 261 and 262 have been reproduced but my learned brother has not appreciated the last lines of the observation by the learned members. It is, therefore, proper to hold that successive returns under Section 139(4) can be filed so long as they are ultimately within the prescribed time. It is pertinent to note here that the term used is successive returns and not a revised returns. They have done so far the reason that they have realised that revised return has been given a particular meaning by the statute and no appellate authority would have the power to modify it but to interpret as it reads. They have realised that a revised return follows a return that has been filed under Section 139(7) or 139(2). They have also realised that a person who has filed return under Section 139(4) can also commit some mistakes and omit certain items to be included as an income or has wrongly included certain items as income which necessarily would have to be corrected for which purpose he is not deprived of filing a successive return or a statement showing the correct income which has necessarily to be taken note of by the ITO before filing of the return. Now the question that arises is once the time limit has been extended by virtue of the first return which is filed belatedly, can the successive return would also entitle the extension of the time limit by one more year from the already extended time by one year. This can at best be explained by way of an illustration. Mr. 'A' should have filed a return for the assessment year say 1980-81 by 30-6-1980. The normal time limit for completion of the assessment expires by 31-3-1983. Mr. 'A' files the return for the first time on 20-3-1983. According to Section 153(1)(c) the ITO can complete the assessment on or before 20-3-1984 as he gets one year time for completion of the assessment from the date of filing of the belated return. Before completion of the assessment on 20-3-1984 the assessee files another return say on 19-3-1984. Can the return filed on 19-3-1984 give a further extension of time of one year for completion of the assessment by treating the return filed on 19-3-1984 as a revised return ? The answer to this question is emphatically 'No'. Section 153(1)(c) is clearly related to the first of the return filed under Section 139(4). Whereas a revised return filed under Section 139(5) provided the first return was one that was filed under Section 139(1) or 139(2), the last of such revised return would be considered for purposes of Section 153(1)(c) and the time limit of one year would start from the date of last of such a revised return which revised return should have been filed before the assessment is completed. This is perhaps so introduced by the Legislature for the reason that a person who has already filed a belated return had sufficient time to check up whether he is filing a proper and a right return or not. It would totally defeat the provisions contained in the statute if a person who has filed a belated return almost by the close of the period of completion of assessment as provided under Section 153 is treated at par with a person who files a return under Section 139(1) or 139(2). If the Legislature did not intend to keep this distinction, there was absolutely no purpose served by providing Section 139(4) and also 139(5). It would be a futile exercise to use the term even under Section 153(1)(c) of extension of one year from the date of filing of a return under Section 139(4) or a revised return under Section 139(5). In the Wealth-tax Act, as already observed above specially in regard to the manner in which the Legislature intended to bring in the term 'return' and the 'revised return' which is akin to the provisions in the Income-tax Act. To my mind, allowing of further extension of one year on the basis of a return which has been filed to correct the return that was filed under Section 15 or 139(4) to extend the time from that last return is only giving the power to the income-tax authorities which was never intended by the Legislature. The harmonious interpretation of a section means interpreting in a manner which is common to both or to be used in the same manner for either of the parties. This has been properly appreciated by the Rajasthan High Court in the case of Vimalchand's case (supra). Their Lordships observed that the time limit of one year would start from the date of filing of the first belated return and once the time is so extended then whatever returns have been filed before the completion of the assessment as a consequence of an extension already granted would not result in a further extension of time for completion of the assessment. There is no bar under the statute for any person filing successive returns as many times he desires. But each such successive return cannot be treated as a belated return for the purpose of finding out the extended time for completion of the assessment. Once the return is delayed, the return is to be held to have been filed under Section 139(4). Let us take the case of an assessee who for the assessment year 1980-81 files a return belatedly say on 1-5-1982. According to the provisions of Section 153(1)(c), the assessment could be completed on or before 30-4-1983. Let us take another example where the return for the same assessment year is filed on say 1-5-1981. In this case the normal period of completion of assessment expires on 31-3-1983. On 28-3-1983 the assessee files another return which is said to be a revised return of the return already filed on 1-5-1981. In this case if we apply Section 153(1)(c) then the assessment on the basis of the return filed on 1st May could have been completed by 30-4-1982 but it could be completed by 31-3-1983 as normal time available for completion expires on that day. Assuming that the ITO treats the return that is filed on 28-3-1983 as a revised return though it is not a revised return within the meaning of Section 139(5) and does not complete the assessment by 31-3-1983 then in that event can he make an assessment up to 27-3-1984 or not or should have completed the assessment by 31-3-1983 which question needs to be answered by looking into the provisions of Section 153(1)(c), read with Section 139(4) and 139(5) and a harmonious interpretation has to be provided. As already observed, Section 139(5) clearly lays emphasis on the fact that the first return being one which is filed either under Section 139(1) or 139(2) and not under Section 139(4). When the original return is not made under Section 139(1) or 139(2) then it would not be termed to be a revised return within the meaning of Section 139(5). When it is not a revised return within the meaning of Section 139(5) then as per Section 153(1)(c) the extension of one year would not apply as such extension of time would apply only in the case of revised return filed under Section 139(5). Exactly similar provisions are contained in Wealth-tax Act. In view of my observations above, I am of the view which view is also supported by the Rajasthan High Court decision, supra, and also supported by the Special Bench in the case of Bohra Film Finance (supra) that a belated return though could be corrected by means of a successive statement or even a return, would not extend the time beyond the already extended time or if the time for completion of assessment is available then further extension of one year from the date of such successive return is not recognised by the statute. Accordingly an assessment if not made within the time limit, is barred by time and there is no power provided under the statute to make an assessment which gets barred by time. The assessment so made would be totally illegal.
4. In the result, the appeals of the assessee are allowed and as a consequence the other grounds are infructuous.
THIRD MEMBER ORDER G. Krishnamurthy, Senior Vice President
1. In this reference made to me as a Third Member, the point of difference of opinion between my learned brothers of Jaipur Bench, who originally heard these appeals, is:
Whether the assessments in question were barred by time ?
2. I have heard the learned counsels for the assessee as well as the department, perused the orders passed by the learned brothers and now I proceed to mention briefly the relevant facts.
3. These appeals relate to the wealth-tax assessment years 1964-65 to 1974.75. The main dispute that arose for consideration in all these appeals is the validity of reassessments made for the years 1964-65 to 1974-75. The wealth-tax returns for the first five assessment years were filed on 1-4-1969 and for later years on 6-10-1969, 24-8-1976, 16-9-1971, 29-8-1972, 16-8-1973 and 29-6-1974, respectively. These are the dates available from the order of the learned Judicial Member, which I have adopted here as there was no dispute on that issue. However, revised returns were filed for all these years on 26-3-1979. The WTO initially completed the assessments on 31-3-1979 in the status of a HUF whereas the returns were filed in the status of individual. For that reason the assessment made were quashed by the AAC relying upon the decision of the Rajasthan High Court in the case of Ridhkaran (supra). Thereafter the WTO proceeded to make assessments for all these years on the basis of the returns filed on 26-3-1979 overruling the objections raised by the assessee that the returns filed on 26-3-1979 were invalid returns though filed by the assessee styling them as revised returns and the proposed reassessments would be time barred. The objection taken by the assessee, to put it shortly was, the returns filed on 26-3-1979 were belated returns within the meaning of Section 14 or 15 and they should be ignored. Once they were ignored, one has to go back to the returns filed originally and since assessments already made on the basis of those returns were quashed on appeal, they should not be again reconsidered and even if they were to be reconsidered, they were barred by time limits provided in Section 17A. The WTO's reasoning in overruling the assessee's objection was that under Section 17A a time limit of one year was available to make assessment or a revised assessment from the date of filing of the return or the revised return filed under Section 15 and since returns filed were revised returns within the meaning of Section 15, he had the necessary jurisdiction to make the assessments within the period of one year provided for in Section 17A. On this reasoning he made the reassessments on 17-3-1980.1 am not in these appeals concerned with the amounts of net wealth assessed as originally or in the revised returns or declared by the assessee except by way of historical background.
4. The assessee then took the matter in appeal before the AAC and repeated the contentions and urged strongly that the reassessments were bad in law as they were time barred. The AAC, however, overruled these objections and confirmed the assessments. There were then further appeals to the Tribunal.
5. Argument raised before the Tribunal was that the provisions of the Income-tax Act and the Wealth-tax Act insofar as filing of the returns of income are concerned as well as the procedure prescribed for assessment are analogous. Drawing an analogy from the corresponding provisions of the 1961 Act laid down in Section 139, the assessee contended that a revised return under Section 139(5) could be filed only if the original return had been filed under Sub-section (1) or Sub-section (2) of Section 139. A return filed under Sub-section (4) of Section 139, which contemplated filing of a return beyond the period prescribed by Section 139(1) or 139(2) could not be revised under Sub-section (5) so as to give a fresh period of limitation for making the assessment. In support thereof reliance was placed upon the judgments of the Delhi High Court in the case of O.P. Malhotra (supra) and Dr. S.B. Bhargava (supra). Reliance was also placed upon a decision of the Special Bench of the Tribunal in the case of Bohra Film Finance (supra) and lastly upon the decision of the Rajsthan High Court in the case of Vimalchand (supra). On the basis of these decisions, it was urged that since the original returns in respect of all the years were not filed within the precribed period under Section 14(1) they were to be treated as returns filed under Section 15 and since no revised return under Section 15 could be filed on the analogy of the 1961 Act, those returns should be ignored. These contentions were stoutly opposed by the revenue relying upon the decision of the Calcutta High Court in the cases of Mst. Zulekha Begum (Khatoon) (supra) and Kumar Jagdish Chandra Sinha (supra).
6. Eventually the question that turned before the Tribunal was whether the returns filed on 26-3-1979 could be regarded as valid returns or invalid returns. If they are valid returns, then the reassessments made on 17-3-1980 would be well within time and would be valid assessments but if the returns are taken to be invalid, then the assessments made would be beyond the time limit and, therefore, be invalid. The learned Judicial Member took the opinion that those returns were valid returns and therefore the assessments made are valid. The learned Accountant Member, however, took a different opinion. Hence, the difference of opinion between the two learned Members, who heard the appeals which eventually came to me as a Third Member.
7. In a case of this nature one would very much like to disucss the pros and cons of the matter and the relevant provisions of the law in order to adjudicate upon the issue but in this case I find there is a decision of the Rajasthan High Court which is binding upon me as well as Bench, which directly decides the issue in favour of the assessee, which the learned Judicial Member has somehow interpreted as distinguishable, with which the learned Accountant Member differed. There is also the decision of the Special Bench of the Tribunal referred to above, which also was in favour of the assessee. Following those two authorities, I am inclined to agree with the view taken by the learned Accountant Member that the returns filed on 26-3-1979 should be regarded as non est in law and consequently the assessments made on 17-3-1980 could only be said to be invalid.
8. Before I go to the case law, I would like to reproduce Section 15, which is very material for the decision of the present case. That section provided that--
If any person has not furnished a return within the time allowed under Section 14, or having furnished a return under that section discovers any omission or a wrong statement therein, he may furnish a return or a revised return, as the case may be, at any time before the assessment is made .
It is also necessary to notice Section 17A(1)(a) which was introduced with effect from 1-4-1976. By Sub-section (1) it has been laid down:
17A. (1) No order of assessment shall be made under Section 16 at any time after the expiration of a period of--
(a) four years commencing on and from the 1st day of April, 1975 or one year from the date of the filing of a return or a revised return under Section 15, whichever is later, where the assessment year is an assessment year commencing before that date;
It will be seen from this section that the time limit for making an assessment or a reassessment is one year from the date of filing of a return or a revised return under Section 15, whichever is later, where, the assessment year commencing before that date, i.e., if a revised return has been filed under Section 15 a time limit of one year is available to complete the assessment. This was the reason why the question arose whether the returns filed on 26-3-1979 could be regarded as revised returns filed under Section 15. As noticed earlier a revised return could be filed only when an omission or a wrong statement was found in the return furnished within the time allowed under Section 14.
9. In thsse appeals the returns filed originally were already processed and assessments were made thereon but they were set aside by the AAC for being redone by the WTO. Those returns ought to have been processed by the WTO pursuant to the directions given by the appellate authority. In the meantime, the assessee no doubt filed returns on 26-3-1979. Those returns were filed beyond the time prescribed under Section 14. It is not known what was the provocation for filing the returns on 26-3-1979. While that mystery remained unresolved, the WTO sought to take advantage of these returns and make assessments within a period of one year from that date so as to bring the assessments within the provisions of Section 17A(1).
10. Now the issue is whether the WTO could act upon those returns, which were filed beyond the time provided under Section 15. Conceptually, textually and procedurally there does not appear to be any difference between the procedure prescribed under the 1957 Act or under the 1961 Act, except for the minor changes in the language used in regard to the procedure prescribed for filing of returns, revised returns and for making of assessments as well as reopening of assessments it was more or less the same. It appeared to me that the provisions of Section 139(4) and (5) were written into Section 15. Thus unless so a return is held to be a return validly filed within the meaning of Section 14 the question of revising that return cannot arise. A somewhat similar situation arose under the 1961 Act, which was resolved by the Rajasthan High Court in the case of Vimalchand (supra).
11. In that case Manakchand Laxmichand, Sirohi, is a registered firm. Its partners are Laxmichand and Vimalchand. The previous year relevant to the assessment year ended on 31-10-1970 in the case of the firm as well as its partners. The three assessees, namely, the registered firm and its partners, Laxmichand and Vimalchand, were to file returns by 30-6-1971. No returns were filed within that time. It appears from the order of the Tribunal dated 27-8-1976, that no notice was issued under Section 139(2) to the assessees. Subsequently, the assessee-firm filed a return on 11-3-1974, declaring an income of Rs. 34,560. The assessment of the assessee-firm was completed on 10-10-1974, on a total income of Rs. 43,117. Laxmichand, one of the partners of the firm, filed a return under Section 139(4) on 20-8-1971, declaring an income of Rs. 32,292. Subsequently, another return was filed on 13-3-1974, declaring a total income of Rs. 32,348. The assessment was completed on 6-11-1974, on an income of Rs. 40,119. Vimalchand, the other assessee (partner of the firm), filed a return under Section 139(4), on 29-8-1971, in which an income of Rs. 17,265 was shown. Another return (the alleged revised return) was filed on 13-3-1974 declaring a income of Rs. 17,327. The ITO completed the assessment, vide order dated 6-11-1974, on a sum of Rs. 17,327. The assessee went in appeal. The AAC held that the returns filed by the assessee were no returns in the eye of law and that the period of limitation could not be extended by filing the returns under Section 139(5). He opined that the assessments in question should have been completed by 31-3-1974, and as the assessments were completed beyond the said time, they were a nullity. Consequently, he annulled the three assessments made by the ITO.
12. Thereafter there were appeals before the Tribunal and the Tribunal reversed the order of AAC holding that the assessment were completed within the time allowed. The view that prevailed with the Tribunal in that case was that the assessee could revise returns under Section 139(5) even though a return was filed under Section 139(4), i.e., not in accordance with Sub-section (1) or Sub-section (2) of Section 139. Then the question that went before the Rajasthan High Court for its consideration was whether a return filed under Section 139(4) could be treated as the same as returns filed under Section 139(1) or 139(2) and whether such a return could be revised under Section 139(5). The Rajasthan High Court held:
A perusal of Section 139 of the Income-tax Act, 1961, shows that returns can be filed under Sub-sections (1), (2) and (4) of Section 139. Thus filing of three returns is contemplated. The returns contemplated under Subsections (1A) and (3) are to be treated as returns under Sub-section (1) and so also a return required under Sub-section (4A). The obligatory returns are under Sub-sections (1) and (2) of Section 139 whereas the voluntary return is under Sub-section (4). In other words, filing a return under Section 139(4) is permissive and voluntary. Section 139(4) is merely an enabling provision. Though three different types of returns are contemplated under Section 139, the right of the assessee to revise the return is only in respect of the return filed under Sub-section (1) or (2) of Section 139. A voluntary return filed under Section 139(4) is not the same as a return envisaged by Section 139(1) and (2). The extended time-limit of one year under Section 153(1)(c) for completing the assessment will not be available in respect of a revised return purported to have been filed under Section 139(5) where originally the return was filed under Section 139(4).
It may be worthwhile to note that the Rajasthan High Court in this case noticed with approval a Special Bench decision of the Tribunal in the case of Bohra Film Finance (supra) where an exactly similar view was taken. The Special Bench of the Tribunal in that case, as noticed by the High Court, held as under:
(1) that the return filed under Section 139(4) cannot be treated as one under Section 139(1) or (2) ;
(2) that it is not possible to construe the returns filed under Section 139(4) as filed under Section 139(1) or (2) or that Section 139(4) can be read as a proviso to Section 139(1) or (2);
(3) that the return provided for under Sub-section (4) of Section 139 stands in a category different from those provided in Sub-section (1) or Sub-section (2) and such a return cannot be revised under Sub-section (5) because such sub-section does not say so ;
(4) that a return filed under Section 139(4) cannot be revised under Section 139(5) so as to extend the period of limitation for making the assessment.
Thus, upholding the view taken by the Special Bench of the Tribunal the High Court proceeded to notice the decisions of the Calcutta High Court given in the cases of Mst. Zulekha Begum (Khatoon) (supra) and Kumar Jagadish Chandra Sinha (supra) as well as the decisions given by the Allahabad High Court in the case of Metal India Products v. CIT [1978] 113 ITR 830 (FB) and also the judgment of the Delhi High Court in the case of O.P. Malhotra (supra). It also noticed another decision of the Allahabad High Court in the case of Dr. S.B. Bhargava (supra). It held that it would approve of the view taken by the Allahabad and the Delhi High Courts and expressed dissent with the view taken by the Calcutta High Court.
13. It would, thus, be seen that the Rajasthan High Court noticed the conflicting judicial opinions on the subject and preferred to dissent from the view taken by the Calcutta High Court. But I find from the order of the learned Judicial Member that he preferred to follow the decision of the Calcutta High Court in preference to the decisions given by the Allahabad and Delhi High Courts and also in preference to the decision of the Rajasthan High Court, which was binding on him as well as the decision of the Special Bench of the Tribunal, which also by convention evolved by the Tribunal, is binding on him.
14. Since I am of the opinion that there is no material difference between the provisions of the 1957 Act and the 1961 Act insofar as the filing of returns are concerned, and that the principle of law laid down under the Income-tax Act is equally applicable to the Wealth-tax Act also the decision given by the Rajasthan High Court in identical circumstances in income-tax case is binding on me and applying that ratio to the wealth-tax case before me, I am inclined to agree with the view taken by the learned Accountant Member that the returns filed on 26-3-1979 could not be regarded as returns filed under Section 14 that they are voluntary and optional and, consequently, they could not be revised. Once they could not be revised or treated as revised returns, the time limit provided for in Section 17A(1) of one year from the date of filing of those returns is not available to the WTO and, consequently, the assessments made by him on the basis of those returns could not be held to be valid.
15. The matter will now go before the original Bench, which heard the appeals originally, for decision according to majority view.