Whether benefit of filing revised return u/s 139(5) can be extended to an assessee, who has failed to file return within statutory time limit, but has filed rectified return before intimation u/s 143(1) was served - NO: Bombay HC

THE issues before the Bench are - Whether the benefit of filing revised return u/s 139(5) can be extended to an assessee, who has failed to file return within the statutory time limit, but has filed a rectified return before the intimation u/s 143(1) was served; Whether when the legislature has not expressly covered a particular class of assessees eligible for availing a specific benefit under any section, the same can be availed based on inference and Whether it is open to the High Court to intepreat the judgment of the Supreme Court, on an issue, which has been expressly settled by the Apex Court. And the verdict goes against the assessee.

Facts of the case

The assessee is a registered partnership firm constituted by the partnership deed. The due date for filing of the return was 31/8/1993. The assessee filed its return of income on 30/9/1993 and the said return declared an unabsorbed depreciation to the tune of Rs.2,42,996 for the AY 1993-94. Intimation u/s 143 (1) (a) was issued on 21.9.1994 and served on the assessee on 24.11.1994. The assessee claimed to have filed a revised return for the purpose of correcting the mistake in its claim by declaring the amount of unabsorbed depreciation as Rs.4,14,345. The assessee challenged this intimation before the Deputy CIT (A), who directed the assessing authority to consider the revised return in the light of the judgment of Madhya Pradesh High Court and Calcutta High Court. The Revenue challenged this order and filed a Second Appeal before the Tribunal. Initially the Tribunal passed the order dated 12.12.2002 and set aside the order of the Deputy CIT (A) and remanded the matter back to the CIT (A). A review application was filed by the assessee u/s 254 seeking rectification of the order, which was dismissed by the Tribunal.

On appeal to the High Court, the counsel for the assessee submitted that the Tribunal had erred in coming to the conclusion that the return filed was a revised return. He submitted that it ought to have held that the said return was a valid return since it was a rectified return and it was sought before the intimation u/s 143 (1) (a) was served on the assessee. It was then contended that the Tribunal had erred in relying on the judgment of the Apex Court in the case of "Kumar Jagdish Chandra Sinha (dead) Through LRs etc., Vs. Commissioner of Income Tax, West Bengal". He submitted that the Supreme Court had not decided the issue as to the distinction between a revised return and a rectified return. He, therefore, submitted that the ratio of the said judgment could not have been made applicable to the appellant of the present case.

On the other hand, the Departmental Representative submitted that after the period of filing the return was over and, as such, in view of the provision of Section 139 sub clause (5), the assessee was not entitled to file the revised return. It was submitted that in case of delay in filing the return, the provision of sub clause (5) was not applicable to such cases, which were covered u/s 139(4), in view of the fact that section 139 (5) merely was restricted to the return which was filed under section 139 (1) and (2).

Having heard the parties, the High Court held that,

+ a perusal of the said section (139) as it existed then and more particularly sub clause 5 of the above provision clearly stipulates that it is applicable in respect of applications which are filed under section 139 sub clause 1 and 2. It does not make any reference to a delayed return or a return filed after the stipulated time, as envisaged under section 139 (4);

+ in view of the above, the benefits of sub clause 5 of Section 139 would not apply to the applications which are filed under section 139 (4) of the said Act. Counsel appearing on behalf of the appellant had laid much emphasis on the provisions of sub clause 5 and, more particularly, on the last portion which reads as under: "he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before completion of the assessment, whichever is earlier". It was contended that in the present case admittedly, the order of assessment was not served on the appellant and, therefore, the provisions of sub clause 5 were clearly attracted in favour of the appellant. We are unable to accept the said submission when sub clause 5 has to be read in context with the other provisions of the said section. In the present case, it is an admitted position where the appellant had not furnished the return within time allotted to him under sub sections (1) and (2) and therefore, his case clearly falls within the provision of section 139 (4). Section 139 (5) merely stipulates that it is applicable to any person who has furnished the return under sub sections (1) or (2). In the present case, therefore, if the appellant had filed the return in time, and thereafter had filed a rectified return, he could be permitted to do so under the said provision. Therefore, from the aforesaid provisions it can be seen that the Legislature in its wisdom had intended to give the benefits of filing a revised return only to those persons who fall within the four corners of section 139 sub sections (1) and (2) of the said Act. If the legislature had intended to also give the same benefits to an assessee who had not furnished the return within time, it would have said so in sub clause (5). The very fact that sub clause 4 is not referred to in sub clause (5) clearly indicates the intention of the legislature;

+ the Apex Court in the case of 'Jagdish Chandra" has in terms considered this aspect and has held that the said benefits could not be made applicable to a person who does not file his return within the time allotted to him under sub section (1) and sub section (2);

+ counsel for the appellant had urged that the Apex Court had not given any decision on the point of distinction between a revised return and a rectified return. We are unable to accept the said submission. The Apex Court after taking into consideration the view taken by the High Court thereafter had observed that the High Court had drawn a distinction between a revised return and a rectified return and in that context had observed that there may be distinction. The Apex Court, however, clearly has maintained in its conclusion that the rectified return was in fact a new return. It is not possible for us to interpret the judgment of the Supreme Court and come to a conclusion that this point has not been decided by the Apex Court. It is not open for the High Court to interpret the judgment of the Supreme Court. The Apex Court in several cases has deprecated this practice of the High Court in dissecting the judgment of the Apex Court in this manner.