TaxTMI 
TaxTMI 
2007 (5) TMI 228
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....ould be accepted even after the expiry of time limit to file a revised return as prescribed under section 139(5) of the Act ?" 3. The brief facts are that the assessee filed a income-tax return for the assessment year 1999-2000 on December 31, 1999, declaring income of Rs. 1,60,03,15,698. The said return was processed under section 143(1)(a) on September 8, 2000, and, thereafter, the case was selected for scrutiny. During the course of assessment proceedings, the assessee, vide letter dated December 26, 2001, filed a revised computation of income thereby reducing the income to Rs. 1,33,21,90,698 by claiming further expenses of Rs. 26,81,25,000 on account of additional power cost and other expenses in connection with failure of transmission tower which earlier were not claimed in the original return. 4. The assessee, vide letter dated March 19, 2002, filed another revised computation of the income further reducing the income to Rs. 1,31,31,94,406 by claiming further deduction of Rs. 3,41,69,312 on account of the expenses being the cost of afforestation of mines and maintenance of roads, as these two were not claimed earlier in the original return. 5. The Assessing Officer, after ....
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....ary to law since it allowed the assessee to do indirectly what he could not do directly. Furthermore acceptance of revised computation of income beyond the period of limitation as prescribed under section 139(5) of the Act makes this provision redundant. The assessee-company did not furnish revised return of income since revised return as contemplated under section 139(5) of the Act should be in the proper and prescribed form and it should be duly signed and verified by a competent authority. It is also contended that it can be filed any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. The additional deductions claimed by the company were, thus, beyond the stipulated time, i.e., the expiry of one year from the end of the relevant assessment year and these revised computation of income dated December 26, 2001, was not signed by the competent authority as prescribed under section 140(c) of the Act. If it is not signed and verified in the prescribed manner, then it is a breach of section 140(c) of the Act and, therefore, the same is not to be taken as a valid return. 13. Further, the revi....
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....002. 16. As per the Tribunal's order, the Commissioner of Income-tax (Appeals) has not disputed this fact that the Assessing Officer has reached at the conclusion after considering the relevant facts and evidences and the assessment has been framed after making due and proper inquiry. The Commissioner of Income-tax has not shown any disagreement on the allowability of deduction legally to the assessee and no fault have been found in the action of the Assessing Officer in this respect. The main objection of the Commissioner of Income-tax (Appeals) is that the claim made by the assessee through his letter dated September 26, 2001, during the assessment proceedings was beyond the time prescribed for revising return as envisaged under section 139(5) of the Act and as such the decision of the Assessing Officer to allow deduction is erroneous and prejudicial to the interests of the Revenue. It is apparent from the record that the assessee had incurred additional power costs and other expenses in connection with the failure of transaction tower and these expenses were incurred wholly and exclusively for the purpose of business and they cannot be held as capital or personal expenses. 17.....
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....oresaid shall be construed as a reference to two years from the end of the relevant assessment year." 21. Section 139(5), in terms, empowers only those assessees who have furnished returns, i.e., under section 139(1) or under section 139(2) or in pursuance of a notice issued under section 142(1), to furnish a revised return if the assessee discovers any omission or any wrong statement in the originally filed return. Such a revised return can be furnished before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. 22. The filing of the revised return after discovery of omission or wrong statement is not by itself sufficient to bring the revised return within the ambit of section 139(5). The further requirement is that this omission or wrong statement in the original return must be due to a bona fide inadvertence or mistake on the part of the assessee. 23. Section 140 of the Act lays down as to by whom return should be signed. The relevant provision of this section for the purpose of the present case is section 140(c) which read as under : "140. Return by whom to be signed.—The return under section....
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....lling the assessment and directing a fresh assessment. . . ." 27. A bare reading of this provision makes it clear that the prerequisite to the exercise of jurisdiction by the Commissioner suo motu under it, is that the order of the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the Revenue. The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous ; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent—if the order of the Income-tax Officer is erroneous but is not prejudicial to the Revenue or if it is not erroneous but is prejudicial to the Revenue—recourse cannot be had to section 263(1) of the Act. 28. The apex court in Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83, had the occasion of interpreting, the phrase "prejudicial to the interests of the Revenue". It held that (page 88) : "The phrase 'prejudicial to the interests of the Revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as pr....
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.... towards the power cost and other miscellaneous expenses incurred during the year amounted to Rs. 33,51,56,000 which was charged to deferred revenue expenses. Further, one-fifth of this amount, i.e., Rs. 6,70,31,000 was deducted being already amortised during the year and the balance amount claimed in the revised computation comes to Rs. 26,81,25,000. Further, the assessee had submitted full details of the expenses incurred for the failure of transmission tower which consisted of Rs. 32,22,21,000 paid to the Madhya Pradesh State Electricity Board towards additional power consumed ; Rs. 54,98,608 towards the cost of additional raw material due to power breakdown and Rs. 74,36,329 towards the repair expenses of the transmission tower. 31. So from the material available on record it is clear that one-fifth amount, that is, Rs. 6,70,31,000 had already been mentioned by the assessee in his original return. 32. The Tribunal in the impugned order has observed that the perusal of the revision order reveals that the Commissioner of Income-tax did not find the order erroneous in any manner as a matter of fact. The phrase "pre-judicial to the interests of the Revenue" has to be read in conj....