HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 99 / 2012 Amit Basu Proprietor M/s Global Vision Company, 21/59, Braghu Path, Mansarovar, Jaipur (Raj) ----Appellant Versus DCIT, Circle-II, NCRB, Statue Circle, Jaipur ----Respondent For Appellant(s) : Mr. Gunjan Pathak with Ms. Ishita Rawat For Respondent(s) : Mr. Anuroop Singhi with Mr. Aditya Vijay HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Judgment 24/10/2017 1. By way of this appeal, assessee has assailed judgment and order of tribunal whereby tribunal has partly allowed appeal of assessee and modified order of CIT(A). 2. This court while admitting appeal on 9.4.2012 framed only one question which reads as under:- Whether under facts and circumstances of case and in law learned ITAT was justified in confirming that appellant is not entitled to deduction u/s 10BA of Act only on premises that on account of revised return filed by appellant, it had not claimed exemption u/s 10BA of Act? 3. However subsequently when matter was at final stage on application, vide order dt. 9.10.2017 following questions were (2 of 27) [ITA-99/2012] added:- ii. Whether without there being any error or omission in Original Return filed under Section 139(1) of Act, revised return filed under Section 139(5) of Act, for withdrawing deduction under Section 10BA of Act, which otherwise legally Appellant is entitled for and such withdrawal was not permissible, such revised return ought not to have been considered by ld. AO? iii. Whether claim made for deduction under Section 10BA of Act in original Return filed under Section 139(5) of Act, without there being any error or omission in original return, and such revised return being not-est in law is hit by provisions of Section 80A (5) of Act inserted from Finance Act 2009 with retrospective effect, restricts such claim? 4. Counsel for appellant Mr. Pathak contended that first revised return for relevant Assessment Year 2007-08, assessee claimed exemption u/s 10BA as per form 55 which was attached with return which is part of Annexure-A-1 to these proceedings. However, he contended that for A.Y. 2005-06, claim was rejected vide Annexure-2. Identically, claim for subsequent year namely 2006-07 was also rejected against which he preferred appeal which was also came to be rejected by CIT(A) (Annexure-4) and also Annexure-5. 4.1 For A.Y. 2006-07 however he preferred appeal before tribunal and pending appeal he has filed revised return Annexure-C on 7.5.2008 and has withdrawn his claim u/s 10BA (3 of 27) [ITA-99/2012] Annexure-1 to avoid any penalty proceedings. 4.2 However, to his fortune, tribunal held in his favour vide judgment and order dt. 21.8.2009 Annexure-7 and immediately he has withdrawn his revised return which was filed on 7.5.2008. 5. He has emphasized following claim made by assessee in his letter dated 7.9.2009:- 6. Therefore in view of decision of Hon'ble ITAT, I hereby request to your good self to please consider my claim of deduction u/s 10BA as made by me in my original return filed on 31.10.2007 for which necessary documents are already on record. Again copies of all necessary documents are enclosed hereby for your reference. 7. It may be pointed out that it is settled law that there can be no estoppels against law. If claim is legitimately allowable to me same has to be allowed even if I make such claim in assessment proceeding. In present case I have originally made claim but for reasons stated above I withdrew said claim but now in view of ITAT decision I be allowed claim of deduction u/s 10BA as originally claimed by me. 5.1 He further contended that vide Annexure-9 for A.Y. 2007-08, Assessment order came to be passed ignoring fact that tribunal allowed his claim in his appeal and AO has observed as under:- Therefore, assessee is not manufacturing or producing any article or thing as contemplated u/s 10BA but was simply engaged in polishing and finishing of fully manufactured items purchased by it. Moreover, goods sold by assessee could not be put under category of "artistic Value". (4 of 27) [ITA-99/2012] Hence claim of exemption u/s 10BA is not justified. Moreover as per amendment with section 80 claim of deduction u/s 10BA is to be claimed with return of Income. However assessee has been failed in doing so. Hence, any claim raised later on cannot be entertained in view of amendment as discussed above. 5.2 He further contended that CIT(A) has committed error in observing as under:- A/R has submitted that Hon'ble ITAT, Jaipur Bench in appellant's own case for A.Y. 2004-05 & 2005-06 as well as in A.Y. 2006-07 has decided issue in favour of appellant and as facts remain identical this year as were in earlier year, as finding precedence issue in year under consideration may be decided in favour of appellant. However as facts in year under consideration are different to extent that in original return filed claim of deduction was made but claim was subsequently withdrew by filing revise return. Under Sec 139 (5) any person can revise return if person discovers any omission or any wrong statement therein. In present case appellant by revising return has accepted that there was wrong statement in original return. Once revised return is filed it becomes basis for assessment and original return gets vanishes. In revised return there is no claim of deduction u/s 10BA. By Finance Act 2009 amendment has been made w.e.f. 01.04.2003 i.e. retrospectively and sub sec 5 of 80A was inserted. This subsection provides that where assessee fails to make claim in his return of income for any deduction u/s 10A or 10BA, no deduction shall be allowed to him thereunder. As in present case return means only revised return and no claim was made in evised return, claim of deduction (5 of 27) [ITA-99/2012] u/s 10BA is not admissible. On this account also claim of appellant can not be allowed. action of AO is therefore upheld. First ground of appeal is decided against appellant. 5.3 He further contended that tribunal while considering case observed as under:- 2.7 During course of proceedings, ld.AR was informed that one of us (Accountant Member) was party to order of Bangalore Bench in case of ACIT vs JSW Steels Ltd., 4 ITR (Trib) 202 in which it was held that depreciation cannot be allowed by adverting to particulars furnished in original return when revised return has been filed.The ld.AR relied on decision of Honb'le Apex Court in of Bajaj Tempo Ltd. 196 ITR 188 in which it has been held that provision granting incentive should be construed liberally. Reliance has been placed on decision of Hon'ble Allahabad High Court in case of CIT vs Andhra Cotton Mills Ltd., 219 ITR 404 in which it is held that revised return cannot be filed for withdrawing claim in original return correctly made. Hon'ble Calcutta High Court held that revised return cannot wash away original return. 2.8 We have heard both parties. It is useful to reproduce provisions of Section 139(5), 80A(5) and 80AC "Section 139 (5) If any person, having furnished return under sub-section (1), or in pursuance of notice issued under sub- section (1) of section 142, discovers any omission or any wrong statement therein, he may furnish revised return at any time before expiry of one year from end of relevant assessment year or before completion of assessment, whichever is earlier: (6 of 27) [ITA-99/2012] Provided that where return relates to previous year relevant to assessment year commencing on 1st day of April, 1988, or any earlier assessment year, reference to one year aforesaid shall be construed as reference to two years from end of relevant assessment year. Section 80A(5) Where assessee fails to make claim in his return of income for any deduction under section 10A or section 10AA or section 10B or section 10BA or under any provision of this Chapter under heading C. Deductions in respect of certain incomes , no deduction shall be allowed to him thereunder. Section 80AC. Deduction not to be allowed unless return furnished.-- Where in computing total income of assessee of previous year relevant to assessment year commencing on 1st day of April, 2006 or any subsequent assessment year, any deduction is admissible under section 80-A or section 80-IAB or section 80-IB or section 80-IC, **or section 80-ID or section 80-IE no such deduction shall be allowed to him unless he furnishes return of his income for such assessment year on or before due date specified under sub-section (1) of section 139. 2.22 Hon'ble Madras High Court in case of CIT vs Pyramid Samiria Theatre Ltd. 316 ITR 75 had occasion to consider as to whether assessee can be considered as assessee in default on basis of original return and not depositing tax u/s 140A, in case assessee files revised return u/s 139(5) of Act. Hon'ble Madras High Court held that assessee will not be default after filing of revised return. revised return filed u/s 139(5) of Act becomes return u/s 139(1) on basis of doctrine of substitution. Hon'ble Allahabad High Court in case of Dhampur Sugar Mills Ltd. vs CIT, 90 ITR 236 held as under:- (7 of 27) [ITA-99/2012] effective return for purposes of assessment is thus return which is ultimately filed by assessee on basis of which he wants his income to be assessed... But when assessment has to be made assessee is given right to file correct and complete return if he discovers error or omission in return filed earlier. assessment can be completed only on basis of correct and complete return.... Once revised return is filed, original return must be taken to have been withdrawn and to have been substituted by fresh return for purpose of assessment. 5.4 Counsel for appellant Mr. Pathak has relied upon following decisions:- In Golden Insulation & Engg. Ltd. vs. Commissioner of Income Tax (DEL HC) (2008) 305 ITR 427 it has been held as under:- 10. bare reading of aforesaid Section makes it clear that assessed may file revised return if it discovers any omission or any wrong statement therein. Insofar as present case is concerned, there is no omission or wrong statement which required assessed to file revised return. reason for filing revised return was only that company had passed resolution to change its method of valuation of closing stock because it did not correctly show profit or loss for each accounting year, and that new method adequately reflected position in regard to previous year's operations. This meant that assessed would show loss of Rs. 4,01,290/- instead of Rs. 3,00,369/- declared with return filed initially. 14. Insofar as present case is concerned, we find that provision of Section 139(5) of Act clearly sets out two conditions under which revised return can be filed and none of these are (8 of 27) [ITA-99/2012] applicable to facts of assessed's case. It is for this reason that revised return showing changed calculation of closing stock ought not to have been accepted by Assessing Officer. only reason for change in method of valuation of closing stock was, as explained by assessed, that is, method adopted did not reflect correct state of affairs. result of change in method of valuation was that assessed showed loss of Rs. 4,01,290/- which is increase from original loss shown as Rs. 3,00,369/-. This was clearly not legally valid reason nor was it bona fide. In facts of present case, change was not justified or legally permissible. In Bajaj Tempo Ltd. vs. Commissioner of Income Tax (1992) 196 ITR 188 Supreme Court held as under:- 5. limited question is whether assessee which has been found by tribunal to be new company could be denied benefit as visualised in Section 15C(1) because of operation of Clause (i) of Sub-section (2). It is restrictive clause. It denies benefit which is otherwise available in Sub-section (1). provision in taxing statute granting incentives for promoting growth and development should be construed liberally! In Broach Distt. Co- Operative Cotton Sales Ginning and Pressing Society Ltd. v. Commissioner of Income Tax, Ahmedabad, MANU/SC/0084/1989 : [1989]177ITR418(SC) assessee cooperative society claimed that receipts from ginning and pressing activities was exempt under Section 81 of Income tax Act. question for interpretation was whether cooperative society which carried on business of ginning and pressing was society engaged in 'marketing' of agricultural produce of its members. Court held that object of Section 81(1) was to encourage and promote growth of cooperative societies and consequently liberal construction must be given to operation of that (9 of 27) [ITA-99/2012] provision. And since ginning and pressing was incidental or ancillary to activities mentioned in Section 81(1) assessee was entitled to exemption and proviso did not stand in way. In Commissioner of Income Tax, Amritsar v. Strawboard Manufacturing Company Ltd., MANU/SC/0119/1989 : [1989]177ITR431(SC) was held that law providing for concession for tax purposes to encourage industrial activity should be liberally construed. question before Court was whether Straw Board could be said to fall within expression "paper and pulp" mentioned in Schedule relevant to respective assessment yeaRs. Court held that since word "paper and pulp" was mentioned in Schedule intention was to refer to paper and pulp industry and since Straw Board Industry could be described as forming part of paper and pulp industry it was entitled to benefit. In Commissioner of Income Tax vs. Chitranjali (1986) 159 ITR 801, Calcutta High Court held as under:- 6. In instant case, assessment has been completed on return filed by assessee within period prescribed under Section 153(1)(a) of Act. It was not contended that in view of subsequent return filed, original return was invalid or non est. Section 139(5) permits assessee, if he discovers omission or wrong statement in original return to file revised return at any time before assessment is made. Such revised return does not wash away original return. Such revised return does not exonerate assessee of any default or offence committedwith reference to original return. As matter of fact, in this case, Income Tax Officer in course of assessment initiated penalty proceedings under Section 271(1)(c) of Act. originally filed return is return in all essential respects and revised return only cures defects contained in original return. (10 of 27) [ITA-99/2012] In disposing of appeal, Appellate Assistant Commissioner may confirm, reduce, enhance or annul assessment or he may set aside assessment or refer case back to Income Tax Officer for making fresh assessment in accordance with direction given by him. On appeal from assessment, if it was completed within period of limitation, Appellate Assistant Commissioner may set aside assessment and direct Income Tax Officer to make fresh assessment, if assessment is otherwise not in conformity with law or procedure. Income Tax Officer has same power in making such fresh assessment as he had originally while making assessment under Section 143 of Act. If Appellate Assistant Commissioner does not limit scope of enquiry by Income Tax Officer to any specific aspect or issue, but only sets aside entire assessment and directs Income Tax Officer to make assessment afresh, power of Income Tax Officer is not affected by anything which he might have omitted to do in original order of assessment which was set aside by Appellate Assistant Commissioner. In this case, entire assessment order was challenged and Appellate Assistant Commissioner, after accepting contention of assessee about infirmity in assessment, set aside assessment directing Income Tax Officer to make fresh assessment. Income Tax Officer in reframing assessment can take into account all returns filed before him. In Commissioner of Income Tax vs. Andhra Cotton Mills Ltd. (1996) 219 ITR 404 Andhra Pradesh High Court held as under:- 3. According to learned counsel for Revenue, even statutory provisions relating to assessment require that particulars of depreciation had to be given and deduction of depreciation (11 of 27) [ITA-99/2012] allowance was necessary in making assessment. We have gone through decision cited by learned counsel for Revenue and also provisions of IT Act. We find that under s. 139(5), revised return could be filed if there is omission or wrong statement. No doubt, in case of company under Companies Act, Sch. VI, Part II, P&L account need not contain provision for depreciation. But that fact has to be mentioned. In present case, assessee had prepared P&L account providing for depreciation and, therefore, did not opt for at option in normal course of its business. In original return, P&L account containing provision for depreciation has been filed. In circumstances, it cannot be said that there was any wrong statement in original return which could enable assessee to file revised return under s. 139(5). Since that valid revised return itself was not valid return for being processed by ITO, claim of assessee that particulars of depreciation are not given and, therefore, deduction should not be allowed is untenable. Moreover, under s. 143(1)(b) (iv), even while making assessment accepting return of assessee, ITO has to allow proper deduction under s. 32. Under s. 143(3), assessment made under s. 143(1) is deemed to be incomplete or inadequate if proper depreciation is not allowed. These provisions also indicate, along with s. 28 which requires that income from business has to be computed in accordance with provisions of ss. 29 - 44, and r/w s. 145, that depreciation is proper deduction in arriving at correct income from business. No doubt, s. 34 provides that deduction shall be allowed only if prescribed particulars are furnished. This only ensures that correct information is available to ITO for allowing proper deduction. But this cannot be construed to mean that where assessee deliberately withholds information, no deduction for depreciation could be given in computing income. In present case, motivation for assessee to withdraw claim for (12 of 27) [ITA-99/2012] deduction of depreciation is only to get set-off of business loss of earlier year. But current depreciation is first charge on profit as held by Supreme Court in Mother India Refrigeration Industries (P) Ltd.'s case (supra) and that charge cannot be ignored by withholding particulars so as to avail of setting off earlier year's loss which lapses by prescribed period of limitation. In our considered opinion, therefore, assessee cannot withdraw claim for depreciation allowance when particulars are available in accordance with s. 34 only for purpose of setting off of loss of earlier years. Since particulars were available as furnished along with original return, ITO is bound to allow deduction of depreciation in computing income from business. assessment made by ITO, in this case, is, therefore, correct and in accordance with law. question referred to us is, therefore, answered in negative, in favour of Revenue and against assessee. In Commissioner of Income Tax & Anr. vs. Venkatesh Dutt (2009) 319 ITR 331, Karnataka High Court held as under:- 9. following questions of law was proposed by State for consideration: (1) Whether Tribunal had jurisdiction to entertain cross-objections filed by assessee to appeal filed by Revenue when Revenue's appeal had been dismissed by upholding order of remand passed by Appellate Commissioner resulting in entire assessment order being set aside for consideration afresh ? (2) Whether Tribunal was correct in proceeding to examine merits of assessment proceedings as to whether income should be assessed in hands of assessee or not when assessment order itself had been set aside and (13 of 27) [ITA-99/2012] entire matter was before Assessing Officer for consideration afresh as particulars available when passing original assessments were not sufficient ? (3) Whether Tribunal was correct in proceeding to entertain cross- objections and permitting assessee in said proceedings for first time to withdraw his earlier admission and concession that income declared by him did not belong to him but to certain other entities without basing these conclusions on any cogent material and consequently recorded perverse finding ? (4) Whether Tribunal was correct in holding that income which had been originally included in assessment proceedings in hands of assessee and which had not been included in hands of M/s. Intercorp Associates and other entities should be excluded from total income of assessee as assessments in case of firm had been reopened and in case of one other entity reference application before this hon'ble court had been filed ? (5) Whether Tribunal was correct in condoning delay in presenting cross-objections when no cogent reasons had been assigned by assessee and especially when main appeal filed by Revenue had already been rejected and consequently cross-objection itself could not be entertained ? 11. Re. Question No. 3 : It is well-settled principle that when assessee files any return or revised return, he/she is always entitled to in law to show that return filed is by bona fide mistake. It is, therefore, in principle, cannot be argued that assessee cannot retract from returns or revised returns filed for valid reason in law. In that view, question No, 3 is answered in affirmative. In Esthuri Aswathiash vs. Income Tax Officer (1961) 41 ITR 539, Supreme Court held as under:- (14 of 27) [ITA-99/2012] 6. Under section 22, sub-section (3), assessee may submit revised return if after he has furnished return under sub-section (2) he discovers any omission or wrong statement therein. But such revised return can only be filed "at any time before assessment is made" and not thereafter. return dated February 26, 1957, was submitted after assessment was made pursuant to earlier return and it could not be entertained. Nor could lodging of such return debar Income Tax Officer from commencing proceeding for reassessment of appellant under section 34(1) of Indian Income Tax Act. There is also no substance in contention that for assessment year 1950-51 assessee could be assessed under Mysore Income Tax Act and not under Indian Income Tax Act. By Finance Act XXV of 1950, section 13, clause (1), it was provided in so far as it is material that : "If immediately before 1st day of April, 1950, there is in force in any Part-B State.... any law relating to income-tax or super-tax or tax on profits of business, that law shall cease to have effect except for purposes of levy, assessment and collection of income-tax and super-tax in respect of any period not included in previous year for purposes of assessment under Indian Income Tax Act, 1922 (XI of 1922), for year ending on 31st day of March, 1951, or for any subsequent year." In Commissioner of Income Tax vs. Lucknow Public Educational Society (2009) 318 ITR 223, Allahabad High Court held as under:- 10. In facts and circumstances of case, we are of view that Assessing Officer has treated Revised Return as "non est" wrongly for reason that Assessing Officer himself has passed (15 of 27) [ITA-99/2012] order under Section 143(3) on basis of Original Return where assessee was legally entitled for exemption under Section 11, if not under Section 10(23C). department should not take advantage of ignorance of assessee as per CBDT Circular No. 14 (XL-35)/1955, dated 11-4- 1955, quoted in Parekh Bros. v. CIT MANU/KE/0059/1983 : [1984] 150 ITR 105 : [1983] 15 Taxman 539 (Ker.). Hence, it was duty of Assessing Officer to ask information from assessee at time of scrutiny but he has not asked any information before completing assessment under Section 143(3) of Act. It may also be mentioned that Tax Audit Report along with return is not mandatory condition as per ratio laid down in case of CIT v. Rai Bahadur Bissesswarlal Motilal Malwasie Trust MANU/WB/0200/1991 : [1992] 195 ITR 825 : 65 Taxman 273 (Cal.) as well as in case of CIT v. Sankalp Welfare Society MANU/PH/1233/2007 : [2008] 303 ITR 64 (Punj. & Har.). Audit Report can be furnished before completing assessment as per ratio laid down in case of CIT v. L.M. Singhvi MANU/RH/0612/2005 : [2007] 289 ITR 425 : [2006] 157 Taxman 312 (Raj.). 12. In instant case, Assessing Officer has not asked any information before denying exemption for which assessee was legally entitled. On other hand, he has rejected Second Return which was enclosed with necessary documents for claiming exemption. 13. ratio laid down in Kumar Jagdish Chandra Sinha's case (supra), is not applicable in instant case as facts were quite different. In said case, penalty was imposed under Section 170(1C). It was observed that before assessment, it was duty of Assessing Officer and if it discovers any omission or any wrong statement in original Return, then opportunity might have been given to assessee. In instant case, no opportunity was given to assessee for any discrepancy. assessee was entitled for exemption under Section 11 of Income Tax Act and that (16 of 27) [ITA-99/2012] exemption was statutory exemption available to assessee. .. Another decision of this court in Commissioner of Income Tax vs. Rajasthan Fasteners (P) Ltd. (2014) 363 ITR 271 (Raj.) wherein it has been held as under:- 16. Admittedly, respondent-assessee is 100% export oriented unit and had been claiming exemption right from assessment year 2004-05 u/s 10B. It may be that claim is to be allowed on year to year basis but when facts and circumstances reveal that assessee was eligible even this year for exemption u/s 10B and it has been found to be in order except that instead of mentioning exemption u/s 10B, while e-filing return of income tax, it was wrongly, on account of typographical error mentioned Sec.80IB, in our view, it cannot be said to be such mistake by which exemption could be disallowed outrightly. It was already stated by assessee during course of hearing before AO himself that it complies with all requirements for claim of exemption u/s 10B. assessee company was under bonafide belief that there was no mistake in return, hence no revised return was filed but after knowing clerical/computerized mistake that claim was wrongly mentioned as u/s 80IB instead of Sec.10B, assessee company filed revised computation of income claiming deduction u/s 10B of IT Act vide letter dt. 13/12/2010 before AO. Not only this, assessee also filed copy of ARE-1 duly sealed and signed by custom authorities in respect of exports having taken place. For evidencing realization of export bills, statement of outstanding export bills from Andhra Bank as on 31/08/2008 showing export bills outstanding for realization as on that date was also submitted. From statement of outstanding export bills as confirmed by Andhra Bank, it was clear that no bill prior to date of March, 2008 had been shown as outstanding for realization. It is (17 of 27) [ITA-99/2012] admitted fact that since assessment year 2004-05, assessee did not have any taxable income after adjusting unabsorbed depreciation and therefore tax was being paid u/s 115J and therefore deduction u/s 10B was being claimed in computation of income. In our view, mentioning of Sec.80IB was only clerical mistake and with all fairness as per facts & circumstances and as per previous claims in tax calculation u/s 115J, assessee was legally entitled for this benefit. It was also admitted that assessee had neither changed/revised financial statements nor tax audit report (Form 3CD) originally filed by it. assessee had only submitted audit report in Form 56G which was not enclosed with return in view of provision of Rule 12 of IT Rules. purpose of audit report in Form 56G is totally different than purpose of audit report in Form 3CA annexed with Form 3CD. It is also admitted fact that financial statement also remained same. In our view, spirit behind this statement must be that assessee should have claimed exemption in his return and filed same within due date and in instant case, assessee on facts available on record clearly shows that claim was duly made but section was inadvertently wrongly mentioned and this fact came to notice of assessee at later point of time when pointed out by AO. In our view, purpose of assessment proceedings before taxing authorities was to assess income correctly and tax liability of assessee in accordance with law. If such clerical mistake occurred, then in our view, AO was duty bound to inform assessee that this claim is wrongly claimed and that one may claim exemption under concerned section. It is also admitted position that substantial manufacturing activities were being carried out by assessee within bonded premises in terms of CBEC circular No.65/2002-Cus dated 07/10/2002 and notification No.52/2003-Cus dt.31/03/2003. In our view, allegation of AO was totally unfounded as all documents, which are issued by Government authorities, (18 of 27) [ITA-99/2012] could not have been predated or fabricated by assessee and in our view allegation of AO that claim could be in nature of afterthought is not correct. 5.5 main contention of appellant was with regard to provisions of Sec. 139(5) which reads as under:- (5) If any person, having furnished return under sub-section (1), or in pursuance of notice issued under sub- section (1) of section 142, discovers any omission or any wrong statement therein, he may furnish revised return at any time before expiry of one year from end of relevant assessment year or before completion of assessment, whichever is earlier : Provided that where return relates to previous year relevant to assessment year commencing on 1st day of April, 1988, or any earlier assessment year, reference to one year aforesaid shall be construed as reference to two years from end of relevant assessment year.] 5.6 He contended that return was filed with view to avoid penalty since his claim u/s 10BA was rejected by Assessing Officer and confirmed by CIT(A) in two previous years. Therefore, to avoid any penalty he has withdrawn his claim. However, subsequently when decision came in his favour, tribunal has written letter withdrawing revised return which was filed on 7.5.2008. main contention was that return which was filed u/s 139(5) was nonest inasmuch return under Sec.139(5) can be filed only in case where sub sec.(1) it contains omission or any wrong statement therein. 5.7 Mr. Pathak relying on above decisions contended that two (19 of 27) [ITA-99/2012] courts have referred and held that Sec. 139(5) is nonest in view of fact that omission and wrong statement was not there. 5.8 He further contended that claim which was made u/s 80A and under Sub clause (5) even if claim is not made, it is duty of Assessing Officer to allow said claim as it was filed in return which was filed earlier and it was on record that claim which was made ought to have been allowed in view of language used in sub clause (5) of Sec.80A. He further contended that Assessing Officer has allowed for subsequent year same claim and for previous two years, tribunal has allowed and it is only for relevant year where assessee has put to loss because of delay in decision of tribunal and to file revised return. Therefore, he is victim of circumstances which is beyond his control and sufferer of delay system. 6. Counsel for respondent Mr. Singhi has relied upon decision of Supreme Court in case of Commissioner of Income Tax vs. Mahendra Mills (2000) 243 ITR 56 wherein it has been held as under:- 25. In Ascharajlal Ram Prakash case MANU/UP/0213/1972 : [1973]90ITR477(All) Allahabad High Court said that since it is not mentioned in Section 34 as to in what form prescribed particulars of depreciation must be furnished and that, therefore, there is no requirement in that Section that particulars must be furnished. High Court further went on to say that merely because form of return provides for place where statement of such particulars should be set out, would not mean that in absence of such statement Income-tax Officer has no power to allow depreciation. This is contrary to mandate of Section 34 as well as Board circular dated August 31, 1965. Madras High Court in Dasa Prakash Bottling Co. case MANU/TN/0461/1979 : [1980]122ITR9(Mad) (20 of 27) [ITA-99/2012] following Allahabad High Court in case of Ascharajlal Ram Prakash said that Income-tax Officer can disallow claim of depreciation if assessee did not furnish prescribed particulars. It further went on to hold that it would be open to Income-tax Officer to grant depreciation even if assessee had not furnished prescribed particulars. In this case assessee did not give particulars relating to depreciation in return form nor did it claim depreciation. On being called upon by Income-tax Officer to furnish necessary particulars assessee in response thereto furnished particulars under protest. On that basis Income-tax Officer granted depreciation. We do not think that views expressed by Madras High Court lay down correct law. Section 34 is not in nature of merely enabling provision. In absence of particulars of depreciation as required by Section 34, there is no mandate on Income- tax Officer under Section 29 to compute income by allowing depreciation under Section 32. In second Madras case (CIT v. Southern Petro Chemicals Industries Corporation Ltd. MANU/TN/0902/1998 : [1998]233ITR400(Mad) assessee did claim depreciation but he withdrew same in revised return. On that basis it was held that since assessee had furnished particulars regarding claim of depreciation in original return assessee would not be able to withdraw his claim for depreciation. It would appear that High Court proceeded on basis that revised return was not valid return under Section 139(5) of Act. High Court followed its earlier decision in Dasa Prakash Bottling Co, To us it appears that if revised return is valid return and assessee has withdrawn claim of depreciation it cannot be granted relying on original return when assessment is based on revised return. 26. We get support from earlier decision of this Court in Dharampur Leather Co. Ltd. case MANU/SC/0192/1965 : [1966]60ITR165(SC) . Allowance of depreciation is calculated on written down value of assets, which written down value would be actual cost of acquisition less aggregate of all deductions "actually allowed" to assessee for past years. "Actually allowed" does not mean 'notionally allowed'. If assessee has not claimed deduction of depreciation in any past year it cannot be said that it was notionally allowed to (21 of 27) [ITA-99/2012] him. thing is "allowed" when it is claimed. subtle distinction is there when we examine language used in Section 16 and that Sections 34 and 37 of Act. It is rightly said that privilege cannot be to disadvantage and option cannot become obligation. 27. We thus uphold views expressed by High Courts of Bombay, Punjab and Haryana, Karnataka, Andhra Pradesh, Calcutta and Kerala. Accordingly appeal is dismissed. We answer question set out in beginning of this judgment in affirmative, i.e., in favour of respondent-assessee and against Revenue. There shall be no order as to costs. 6.1 He also relied upon decision of Gujarat High Court in Principal Commissioner of Income Tax-I vs. Babu Bhai Ramamn Bhai Patel (2017) 84 Taxman.com 32 (Guj.) wherein it has been held as under:- 6. Sub-section (5) of Section 139, therefore, gives right to assessee who has furnished return under sub-section (1) or sub-section (4) to revise such return on discovery of any omission or wrong statement. Such revised return, however, can be filed before expiry of one year from end of relevant assessment year or before completion of assessment, whichever is earlier. This is precisely what assessee did while exercising right to revise return. Sub-section (5) of Section 139 does not envisage situation whereupon revising return if case for loss arises which assessee wishes to carry forward, same would be impermissible. In terms, sub-section (5) of Section 139 allows assessee to revise return filed under subsection (1) or sub-section (4) as long as time frame provided therein is adhered to and requirement of revised return has arisen on discovery of any omission or wrong statement in return originally filed. Accepting contention of revenue would amount to limiting scope of revising return already filed by assessee flowing from sub-section (5). No such language or intention flows from such provision. (22 of 27) [ITA-99/2012] 6.1 Allahabad High Court in case of Dhampur Sugar Mills Ltd. vs. Commissioner of Income Tax, Delhi Central reported in [1973] 90 ITR 236, in context of Income Tax Act, 1922 held that assessee is given right to file correct and complete return if he discovers error or omission in return filed earlier. assessment can be completed only on basis of correct and complete return. earlier return, after revised return has been filed, cannot form basis of assessment although it may be used to indicate conduct of assessee. There is clear distinction between revised return and correction of return. Once revised return is filed, original return must be taken to have been withdrawn and substituted by fresh return for purpose of assessment. 6.2 He further relied upon decision of Supreme Court in Goetze (India) Ltd. vs. Commissioner of Income Tax (2006) 284 ITR 323 wherein it has been held as under:- 2. question raised in this appeal relates to whether appellant assessee could make claim for deduction other than by filing revised return. assessment year in question was 1995-96. return was filed on 30-11- 1995, by appellant for assessment year in question. On 12-1-1998, appellant sought to claim deduction by way of letter before assessing officer. deduction was disallowed by assessing officer on ground that there was no provision under Income Tax act to make amendment in return of income by modifying application at assessment stage without revising return. 3. This appellant's appeal before Commissioner (Appeals) was allowed. However, order of further appeal of department before Income Tax Appellate Tribunal was allowed. appellant has approached this court and has submitted that Tribunal was wrong in upholding assessing officer's order. He has relied upon decision of this court in National Thermal Power Company Ltd. v. CIT MANU/SC/1287/1997 : [1998]229ITR383(SC) , to contend that it was (23 of 27) [ITA-99/2012] open to assessee to raise points of law even before Appellate Tribunal. 4. decision in question is that power of Tribunal under section 254 of Income Tax Act, 1961, is to entertain for first time point of law provided fact on basis of which issue of law can be raised before Tribunal. decision does not in any way relate to power of assessing officer to entertain claim for deduction otherwise than by filing revised return. In circumstances of case, we dismiss civil appeal. However, we make it clear that issue in this case is limited to power of assessing authority and does not impinge on power of Income Tax Appellate Tribunal under section 254 of Income Tax Act, 1961. There shall be no order as to costs. 6.3 He also relied upon decision of Allahabad High Court in Dhampur Sugar Mills Ltd. Vs. Commissioner of Income Tax (1973) 90 ITR 236 wherein it has been held as under:- 5. question however remains as to whether this return will continue to form basis for purposes of assessment even after it was substituted by revised return. Section 22(3) of 1922 Act as also Section 139(5) of 1961 Act permit assessee to file revised return if he discovers any omission or wrong statement in return filed by him. Income-tax Actcontemplates filing by assessee of correct and complete return. law gives him right to substitute and bring on record correct and complete return if he discovers any omission or wrong statement in return originally filed by him. law cannot contemplate making cf assessment on basis of return which even assessee claims contains wrong statements. When assessee files revised return, he in fact admits that original return filed by him was not correct or complete and substitutes same by revised return which according to him is correct and complete. effective return for purposes of assessment is thus return which is ultimately filed by assessee on basis of which he wants his income to be assessed. Learned counsel for assessee, to support his contention to contrary, urged (24 of 27) [ITA-99/2012] that, as penalty proceedings under Section 28(1)(c) of 1922 Act or under Section 271(2)(c) of 1961 Act are permissible if assessee conceals particulars of his income or deliberately furnishes inaccurate particulars of such income in original return even though he may subsequently file correct and complete revised return, it must be held that original return is also effective return. I am not inclined to accept contention. person is penalised for wrong act that he does and offence becomes complete as soon as act is done. It cannot be cured by subsequent mending. It is on this principle that assessee can be penalised for concealing particulars of his income or deliberately furnishing inaccurate particulars of such income. But, when assessment has to be made assessee is given right to file correct and complete return if he discovers error or omission in return filed earlier. assessment can be completed only on basis of correct and complete return. earlier return, after revised return has been filed, cannot form basis of assessment although it may be used to indicate conduct of assessee. Hence, for purpose of assessment of income, effective return must be revised return filed by assessee ultimately. 6. There is distinction between revised return and correction of return. If assessee files some application for correcting return already filed or making amends therein, it would not mean that he has filed revised return. It will still retain character of original return, but once revised return is filed, original return must be taken to have been withdrawn and to have been substituted by fresh return for purpose of assessment. same view has been taken in Gopaldas Parshottamdas v. Commissioner of Income-tax, [1941] 9 I.T.R. 130 (All.). 6.4 He also relied upon decision of this court in M/s. Young Steel Pvt. Ltd. vs. Commissioner of Central Excise, Jaipur-I D.B. Central/Excise Appeal No.1/2006 decided on 23.8.2017 wherein it has been held as under:- (25 of 27) [ITA-99/2012] 10. Taking into consideration that no basis was laid even before first authority or Tribunal and when act and provisions are made it is not to be presumed ultra vires unless it has been quashed and set aside by High Court or any High Court or Supreme Court, in writ jurisdiction. 11. In our considered opinion, regarding Section 35G it will not be appropriate to held any provision to be unconstitutional because power under section 35G is only to be exercised in substantial question of law arising out of Central Excise Act and not on any constitutional point. 12. In that view of matter, fist question is required to be answered against assessee in favour of department. On second issue which is posed for our consideration is Section 10 of General Clauses Act and judgment of Manglore Chemicals (supra). 13. In our considered opinion, when considering rule there are five conditions which are required to be fulfiled since assessee is claiming exemption. If one is to claim exemption and non-payment of tax, interpretation of such exemption should be construed and it is in aid to rule. Once interpretation is found to be proved one has to go by rule. 14. In our considered opinion, rule even if it is construed liberally cannot travel beyond next working day of closure either it is Saturday, Sunday and public holiday or any other circumstances where movement of person is not possible to reach office of Central Government or respondent namely in case of curfew or any other exigency, time can be extended and all documents on record do not show that on date of intimation of there was curfew in area which is to be proved by assessee and not by department. 7. We have heard counsel for parties. 7.1 Before proceeding with matter, crucial question which came for our consideration is whether return filed u/s 139(5) is revised return and return filed on 7.5.2008 Annexure-5 can be (26 of 27) [ITA-99/2012] allowed to be withdrawn vide letter dt. 7.9.2009. 8. On close reading of Sub-Sec.(5) of Sec.139, it is very clear that legislature has given chance to assessee to check his position within one year or before end of relevant assessment, whichever is earlier. Since, period was expired but for year assessee has taken his position and withdrawn his claim after that position is taken. Sec.139(5) is very clear that assessee could not have withdrawn claim, having withdrawn same by filing revised return. It is only open for department to accept it or not to accept it. Having taken advantage of position of claiming benefit u/s 139(5) and to avoid penalty, in our considered opinion, it is not desirable to allow any party to blow hot and cold. If tribunal decision would not have been in his favour, assessee could not have contended that this is nonest. Even if department would have denied that this is nonest, he would have contested matter. 9. Apart from that, it is very settled law that person who is taking advantage of provisions of Sec. 139(5), he cannot say that it is nonest. In that view of matter, even if view taken by tribunal subsequently but legally Sec.139(5) benefit cannot be withdrawn vide letter dt. 7.9.2009, which is reproduced here for ready reference:- 6. Therefore in view of decision of Hon'ble ITAT, I hereby request to your good self to please consider my claim of deduction u/s 10BA as made by me in my original return filed on 31.10.2007 for which necessary documents are already on record. Again copies of all necessary documents are enclosed hereby for your reference. (27 of 27) [ITA-99/2012] 7. It may be pointed out that it is settled law that there can be no estoppels against law. If claim is legitimately allowable to me same has to be allowed even if I make such claim in assessment proceeding. In present case I have originally made claim but for reasons stated above I withdrew said claim but now in view of ITAT decision I be allowed claim of deduction u/s 10BA as originally claimed by me. 10. In that view of matter, revised return was not permissible and revised return of revised return is not thought of by legislature. Thus, u/s 139(5) once return is filed after period of limitation which is prescribed under Act, position of assessee is very clear that he cannot do it. It is only for department to take call whether to accept or not. 11. On point of Sec.80A (5), in our considered opinion return which is claimed under consideration not of return which he has filed. In that view of matter, contention of Mr. Pathak that revised return alongwith earlier return ought to have been considered, in our considered opinion, return which is referred in 80A(5) is to be considered which is filed for relevant year under consideration of AO and not of return which he stated and he cannot claim any benefit of same. 12. In view of above, all issues are answered in favour of department and against assessee. Hence, appeal stands dismissed. (VIJAY KUMAR VYAS)J. (K.S. JHAVERI)J. //bm gandhi 47 Powered by TCPDF (www.tcpdf.org) Amit Basu v. DCIT, Circle-II, Jaipur