CASE NAME: M/s. Shriram Investments vs. Commissioner of Income Tax III Chennai
CASE NO. : Civil Appeal No. 6274 of 2013
DATED: October 4, 2024
QUORUM: Justice Abhay S. Oka, Justice Augustine George Masih
FACTS OF THE CASE
The Appellant cum assessee had filed a return of income under the Income Tax Act 1961 (ITA) on 19th November 1989 for assessment year 1989-90. On 31st October 1990, they filed a revised return. The appellant had paid the necessary tax amount as per the intimation issued under Section 143(1)(a) on 27th August 1991. The appellant has filed another revised return on 29th October 1991. The assessing officer did not take cognizance of the said revised return. Therefore, the appellant went for an appeal before Commissioner of Income Tax (Appeals) (CITA). CITA dismissed the appeal by order on the ground that the revised return was barred by limitation as per Section 139(5) of ITA on 21st July 1993. The aggrieved appellant appealed before Income Tax Appellant Tribunal (IATA). The tribunal allowed the appeal and sent back the case to assessing officer. The assessing officer was directed to consider the assessee’s claim for deduction of deferred revenue expenditure. The respondent went for appeal before the High Court (HC). HC set aside the tribunal order on the ground that revised return was barred by time and there is no provision to consider the claim made by the appellant.
ISSUES OF THE CASE
- Whether assessing officer has jurisdiction to consider the claim of revised return which is time barred by limitation?
- Whether the impugned judgment of High Court validates to the grounds for revised return and is in the accordance of law?
LEGAL PROVISIONS
- Income Tax Act, 1961
- Section 139(1) –
“Return of income.—[(1) Every person,—
(a) being a [company or a firm]; or
(b) being a person [other than a company or a firm], if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax,
shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed”
- Section 142 –
“Inquiry before assessment.—(1) For the purpose of making an assessment under this Act, the [Assessing Officer] may serve on any person who has made a return [under section 115WD or section 139 [or in whose case the time allowed under sub-section (1) of section 139] for furnishing the return has expired] a notice requiring him, on a date to be therein specified”
- Section 143(1)(a) –
“Assessment.— [(1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:—
(a) the total income or loss shall be computed after making the following adjustments”
- Section 139(5) –
“([(5) If any person, having furnished a return under sub-section (1) or sub-section (4), discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.]”
- Section 254 –
“Orders of Appellate Tribunal.—(1) The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit.”
- Section 139(3) –
“(3) If any person who has sustained a loss in any previous year under the head “Profits and gains of business or profession” or under the head “Capital gains” and claims that the loss or any part thereof should be carried forward under sub-section (1) of section 72, or sub-section (2) of section 73, [or subsection (2) of section 73A] or [sub-section (1) or sub-section (3) of section 74], [or sub-section (3) of section 74A], he may furnish, within the time allowed under sub-section (1), a return of loss in the prescribed form and verified in the prescribed manner and containing such other particulars as may be prescribed, and all the provisions of this Act shall apply as if it were a return under sub-section (1).”
- Section 80 –
“Submission of return for losses.—Notwithstanding anything contained in this Chapter, no loss which has not been determined in pursuance of a return filed [in accordance with the provisions of sub-section (3) of section 139], shall be carried forward and set off under sub-section (1) of section 72 or sub-section (2) of section 73 [or sub-section (2) of section 73A] or 6[sub-section (1) or sub-section (3) of section 74] [or sub-section (3) of section 74A].”
- Section 10B(8) –
“Special provisions in respect of newly established hundred per cent export-oriented undertakings.—
Notwithstanding anything contained in the foregoing provisions of this section, where the assessee, before the due date for furnishing the return of income under sub-section (1) of section 139, furnishes to the Assessing Officer a declaration in writing that the provisions of this section may not be made applicable to him, the provisions of this section shall not apply to him for any of the relevant assessment year.”
CONTENTIONS BY THE APPELLANT
- Relied upon the decisions made in case Wipro Finance Ltd. v. Commissioner of Income Tax.
- Assessing officer can consider the claim made by the appellant regarding the deduction of the deferred revenue expenditure in accordance with law.
- The appellant was entitled to make a claim during the course of assessment proceedings.
CONTENTIONS BY RESPONDENT
- Relied upon the decisions made in case Goetzge (India) Ltd. v. Commissioner of Income Tax and Principal Commissioner of Income Tax & Anr. v. Wipro Limited.
- There was no question of considering the claim for deduction after the revised return is barred by limitation.
- HC had concluded that the assessing officer had no jurisdiction or power to consider claim or the case of appellant after the revised return was barred by limitation.
JUDGEMENT
The Supreme Court held that the Tribunal had not exercised its power under Section 254 of the ITA to consider the claim. The Tribunal had instead directed the assessing officer to consider the appellant claim. The accessing officer had no jurisdiction to consider the claim made by the appellant in the revised return filed after the limitation period prescribed under the Section 139(5). There is no reason to interfere in the decision or the order of the impugned judgement of the HC. Hence, the appeal was dismissed.
CONCLUSION
The Supreme Court after going through the facts of the case and the provisions of law came to the decision that filing the revised return after the expiry of prescribed time cannot be considered by the assessing officer of the Income Tax Department and the assesse cannot claim for the returns after the limitation period. The concerned assesse have to adhere to the rules of the government authorities to claim their rights.
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WRITTEN BY: SOUJANYA V
