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8. Learned senior counsel then submits that the impact of filing of a bonafide revised return is that once a valid revised income tax return is filed, old income tax return is to be ignored in entirety as it supplants, supersedes and replaces the original income tax return. He invites our attention to Hon'ble Punjab and Haryana High Court's judgment in the case of Beco Engineering Co Ltd Vs CIT [(1984) 148 ITR 478 (P&H)] which has, inter alia, held that, "in case an assessee files revised returns, they are to be taken into consideration for the purposes of making an assessment" and that "the original returns cannot be adverted to for that purpose".

Assessment year: 2008-09 Learned counsel also points out that, in holding so, Hon'ble Punjab & Haryana High Court has followed the judgment of Hon'ble Allahabad High Court in the case of Niranjan Lal Ram Chandra vs. CIT [(1982) 134 ITR 352 (All)], wherein it was observed that "once a revised return has been filed under s. 139(5), the original return is substituted by the revised return as a result of the amendments made in the original return by the revised return" and that "consequently, the IT authorities could not take into consideration the original returns for the assessment of the assessee". Learned senior counsel then points out that the views so expressed in Beco Engineering's case (supra) have been confirmed by Hon'ble Supreme Court in the case of CIT vs Mahendra Mills [(2000) 243 ITR 56 (SC)]. Learned counsel then refers to the judgment of Hon'ble Bombay High Court, in the case of CIT vs Shri Someshwar Sahkari Sakar Kharana Ltd [(1989) 177 ITR 443 (Bom)] wherein, according to the learned counsel, it was held that once a valid revised return is filed, it cannot be open to the Assessing Officer to even look at the original income tax return. Learned counsel then turns to Hon'ble jurisdictional High Court's judgment in the case of CIT Vs Arun Textile [(1991) 192 ITR 700 (Guj)], in support of the proposition that, once a valid revised income tax return is filed, it cannot be open to the income tax authorities to refer to the original income tax return filed by the assessee. It is submitted that the filing of a revised income tax return thus completely supersedes and replaces the original income tax return, and, therefore, it cannot be open to the Assessing Officer to refer to the original income tax return for the purpose of ascertaining default in payment of admitted tax liability. The very foundation of the impugned penalty proceedings thus, according to the learned counsel, is vitiated in law.

Rejoinder:

12. In his brief rejoinder, learned counsel for the assessee submits that we must bear in mind the fact that the impugned penalty is not for misreporting the facts or for making incorrect statements, but for non payment of admitted tax liability at the time of filing income tax return. It is, therefore, not even relevant whether the assesse made any wrong statement about payment of admitted tax liability. Such a lapse of the assessee, even if actually committed, is not relevant for the present purposes. As for Hon'ble Supreme Court's judgment in the case of Prakash Nath Khanna (supra), learned counsel points out that this decision in the context of not adhering to time limit for filing of income tax return. Learned counsel once again points out that the lapse in not making payment of admitted tax liability, at the time of filing income tax return, is event specific and not time specific. Nothing therefore, in the opinion of the learned counsel, turns on this Supreme Court decision. Coming to Hon'ble Delhi High Court's judgment in the case of Vinod Khatri (supra), learned counsel submits that this decision has been delivered in an altogether different context, and, the observations made therein, therefore, have no application in the situation before us. It is pointed out that in the said decision the question was whether non issuance of notice under section 143(2), post filing of the revised return, would invalidate the assessment proceedings. The observations made in an altogether different context should not be taken into consideration, for the present purposes, as the law laid down by Their Lordships. Learned counsel once again reiterates his submissions and urges us to hold that since the assessee has filed a valid revised return and the assessee has duly paid admitted tax liability thereon, penalty under section 221(1) r.w.s. 140A cannot be imposed in respect of lapse in non-payment of admitted tax liability in respect of original income tax return.

16. As a plain reading of the above statutory provisions would show, the lapse, referred to in section 140A(1), is the failure "to pay such (admitted) tax together with interest payable under any provision of this Act for any delay in furnishing the return or any default or delay in payment of advance tax, before furnishing the return" and the lapses punishable under section 221(1) are the lapses in respect of "default in making a payment of tax". The default triggering the penal liability under section 221(1) is the default in making payment of tax, and that the default in payment is tax is with reference to the filing of the income tax return. Viewed thus, default is committed at the point of time when a return of income is filed without making payment of the admitted tax liability. Clearly, therefore, the assessee committed a default in not paying the admitted tax liability when it filed the original income tax return, without payment of admitted tax liability, on 30 th September 2008. To this extent, there is no dispute or ambiguity at all.The question then arises as to what is the impact of filing a revised income tax return. To the extent it pertains to the assessment proceedings, undoubtedly inasmuch as it is the validly revised return is the starting point for the assessment of income, the original income tax return ceases to be relevant. However, that substitution of income tax return is only for the purposes of assessment of income. All the judicial precedents cited at the bar is on these lines. The questions which have come up for consideration in the context of all these judicial precedents is assessment of income and the related claims, in the income tax returns, on that aspect of the matter. The common thread in the cases of Beco Engineering (supra), Niranjan Lal Ram Assessment year: 2008-09 Chhandra (supra), Shri Soemshwaar Sahkari Karkhana (supra), Arun Textiles (supra) and Mahendra Mills (supra), is that in all these cases, there were variations between the claims made in the original income tax return vis-à-vis the revised returns of income and the question before Hon'ble Courts above was as to which set of claims, made in the original return or made in revised returns, should be considered by the Assessing Officer. There is an unanimity in all these decisions that the claims made in revised return alone could be considered by the Assessing Officer but neither we have any quarrel with this proposition nor is that aspect at all relevant in deciding the issue before us. The claims made in an income tax return is one thing and all the actions connected with the original income tax return becoming a legal nullity quite another thing. The basic character and traits of these two set of things are materially different, and just because revised return substitutes the original income tax return for the purposes of adjudication on claims made in the income tax return does not mean that revised income tax return also substitutes original income tax return for all legal purposes, including penal consequences in respect of defaults committed in respect of the original income tax return. That will be a wholly superfluous approach, if adopted. The observations made by Their Lordships in this context cannot be viewed on standalone basis as a complete exposition of law on the question which did not even come up for consideration before Their Lordships. We may, in this regard, refer to the following oft quoted observations made by Hon'ble Supreme Court in the case of CIT vs Sun Engineering Works Pvt Ltd [(1992) 198 ITR 297 (SC)]: