1994 (1) TMI 84 - HC - Income Tax

Kerala High Court: Second return under section 139(4) invalid for assessment

The High Court of Kerala ruled against the assessee, holding that the Tribunal erred in deeming the second return as valid under section 139(4) for ... Assessment, Return Issues:- Interpretation of Income-tax Act provisions regarding filing of successive returns under section 139(4)- Validity of assessment based on second return filed by the assessee- Comparison of decisions in Eapen Joseph v. CIT and CIT v. Dr. N. Shrivastava- Determination of whether the Tribunal's decision on the second return filing is correctAnalysis:The High Court of Kerala was tasked with interpreting the Income-tax Act provisions concerning the filing of successive returns under section 139(4). The case revolved around the validity of an assessment based on the second return filed by the assessee. The court examined the conflicting decisions in Eapen Joseph v. CIT and CIT v. Dr. N. Shrivastava to determine the correct legal position. The central issue was whether the second return could be considered valid under section 139(4) for assessment purposes.In the case at hand, the assessee failed to file a return under section 139(1) for the relevant accounting year. Despite receiving a notice under section 139(2) to file the return, the assessee did not comply. Subsequently, the assessee filed a return on two occasions: first on July 17, 1980, and then on November 17, 1980. The Income-tax Officer refused to consider the second return and completed the assessment based on the first return. The Commissioner of Income-tax (Appeals) directed the Income-tax Officer to assess based on the second return, leading to appeals and subsequent Tribunal decisions.The court referenced the decision in Eapen Joseph v. CIT, which held that any return filed subsequent to the original one under section 139(4) had no legal consequence. The court also considered the conflicting view in CIT v. Dr. N. Shrivastava but ultimately upheld the position in Eapen Joseph. The court emphasized that the statute expressly allowed revised returns only for those filing under section 139(1) or (2), not under section 139(4). As the assessee did not file under section 139(1) or (2) initially, the court concluded that the second return could not be the basis for assessment.Consequently, the court ruled against the assessee, holding that the Tribunal erred in considering the second return as valid under section 139(4) for assessment purposes. The judgment favored the Revenue and rejected the assessee's claim. The court dismissed the misconceived application and directed the Tribunal to receive a copy of the judgment for compliance with legal requirements.