TaxTMI 
TaxTMI 
TaxTMI 
2009 (4) TMI 71
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....r Section 115 JB was Rs.17,25,48,875/-. Consequently, the tax payable, according to the petitioner, was Rs.1,95,49,789/-. Since the petitioner had already made payment of Rs.4,11,76,102/-, as per the original return dated 30.9.2008, the petitioner sought a net refund of the difference viz., Rs.2,16,26,310/-. 3. But before the petitioner filed a revised return, the Assessing Officer viz., the Deputy Commissioner of Income Tax, Media Circle-I, attached all the bank accounts of the petitioner and also issued garnishee notices to petitioner's debtors, treating the petitioner as an "assessee in default" in terms of Section 140A(3) of the Act. 4. Aggrieved by the said action, on the part of the second respondent, the petitioner filed a representation before the first respondent on 9.3.2009, seeking his intervention as the next higher authority and requesting him to lift the orders of attachment and withdraw the garnishee notices. Simultaneously, the petitioner also came up with a writ petition in W.P.No.4045 of 2009, seeking a Writ of Mandamus, to direct the first respondent to dispose of his representation. The petitioner also prayed for an interim relief, for lifting the orders of a....
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....d respondent in course of time. 7. Aggrieved by the said order of the first respondent dated 2.4.2009, the petitioner has come up with W.P.No.6213 of 2009, seeking a Writ of Certiorari, to call for the records and to quash the same. The petitioner has also come up with another writ petition in W.P.No.6214 of 2009, seeking a Writ of Mandamus, to forbear the respondents from treating the petitioner as an "assessee in default" under Section 140A(3) of the Act and proceeding with the recoveries under Section 226(3) till an adjudication is done under Section 143 on the original return and the revised return. 8. When both the writ petitions came up for admission on 13.4.2009, Mr.K.Subramaniam, Standing Counsel for the Department, took notice and sought time to file counter. On 18.4.2009, the respondents filed the counter affidavit along with a typed set of papers. Thus, the pleadings were complete and hence by consent of parties, the writ petitions were taken up for disposal. 9. I have heard Mr.C.Natarajan, learned Senior Counsel for the petitioner and Mr.K.Subramaniam, learned Standing Counsel for the Department. 10. The fact that the petitioner filed an original return of income o....
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....as may be prescribed, on or before the due date. Explanation-2 to sub section (1) of Section 139, defines the "due date" to mean the 30th day of September of the assessment year. 14. Sub section (5) of Section 139, entitles an assessee to file a revised return and it reads as follows:- "If any person, having furnished a return under sub section (1), or in pursuance of a notice issued under sub section (1) of Section 142, discovers any omission or any wrong statement therein, 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 the completion of the assessment, whichever is earlier." 15. Admittedly, the assessment is not yet completed and the period of one year from the end of the relevant assessment year had also not expired, on 6.3.2009, the date on which, the petitioner filed a revised return. In other words, the revised return was filed by the petitioner well within the time prescribed by sub section (5). 16. In such circumstances, what is the sanctity of the revised return has now become the subject matter of controversy. According to the learned Senior Counsel for the petitioner, the revised retu....
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....aintained on cash basis. The Assessing Officer, the Appellate Assistant Commissioner and the Income Tax Appellate Tribunal, rejected the revised return and at the instance of the assessee, a reference was made to a Bench of the Madhya Pradesh High Court, which held as follows:- "This provision clearly enacts that where a person who has filed a return under sub-section (1) or sub-section (2) discovers any omission or wrong statement made in the return filed, it is only in those circumstances that he is permitted to file a revised return. Apparently, it is not the case of the assessee that he has omitted to mention something or that he has made any wrong statement. Therefore, as held by the Tribunal, the assessee could not be permitted to rewrite the account books when in fact during the accounting year they were maintained on a particular system of accounts. In this view of the matter, it is apparent that the Tribunal was right in holding that the return filed under Section 139(5) was not a valid return." 22. In Girishchandraharidas case, the members of a Hindu undivided family, running a business, divided the assets and filed returns of income, disclosing proportionate share of r....
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....39(5) of The Income Tax Act, 1961. But the recognition afforded to this principle, is circumscribed by two limitations viz., (i) that it should be done within the time limit prescribed and (ii) that the purpose of such substitution should be to set right any omission or wrong statement contained in the original return. 26. In contrast to the decisions cited on behalf of the petitioner, the decisions cited by the learned Standing Counsel for the Department, have arisen out of the rejection of the revised returns by the Assessing Officers, in exercise of the powers conferred upon them. There is no quarrel with the proposition that an Assessing Officer has the right to accept or reject the revised return, exactly as he has the power to accept or reject the original return. In the decisions relied upon by the learned Standing Counsel for the Department, the Assessing Officers concerned rejected the revised returns and after a sojourn through the Appellate Authority and the Tribunal, the questions of law reached the High Court on references. Therefore the citations relied upon by the Standing Counsel for the Department, provide no answer to the question now raised. 27. In the case o....
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....on 148 or Section 153-A or as the case may be Section 158-BC, after taking into account the amount of tax, if any, already paid under any provision of this Act, the assessee shall be liable to pay such tax together with interest payable under any provision of this Act for any delay in furnishing the return or any default or delay in payment of advance tax, before furnishing the return and the return shall be accompanied by proof of payment of such tax and interest." 31. Thus sub section (1) fixes the date of furnishing of the return as the outer limit of time for making payment of tax. If payment is not made on or before the date of furnishing of the return, the assessee is considered to be in default, by a deeming fiction created under sub section (3) which reads as follows:- "If any assessee fails to pay the whole or any part of such tax or interest or both in accordance with the provisions of sub section (1), he shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of the tax or interest or both remaining unpaid and all the provisions of this Act shall apply accordingly." 32. Therefore, it is mandatory for an ....
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....erpretation of Section 4 of the Act, together with the other provisions, appears to be that "the liability to pay income tax chargeable under Section 4(1) of the Act does not depend on the assessment being made". Hence in the case on hand, the moment a self-assessment is made and a return filed by the petitioner, under Section 139(1) on 30.9.2008, the provisions of Section 140-A(1) and consequently Section 140-A(3) came into operation, automatically. Therefore, there is no doubt about the fact that on and from 30.9.2008, upto 6.3.2009 {the date of filing of the revised return}, the petitioner was an assessee in default in terms of Section 140-A(3). It was during this period that the second respondent issued orders of attachment and garnishee notices. This is perhaps why, the petitioner did not come up with a challenge to the orders of attachment and garnishee notices, even at the first instance. The petitioner chose to file a revised return on 6.3.2009 and then made a representation to the first respondent on 9.3.2009 for lifting the attachment and thereafter came up with the first writ petition, seeking a mere Mandamus, to direct the first respondent to pass orders on their repres....
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....245-D the amount on which interest was payable under this Section had been reduced the interest shall be reduced accordingly and the excess interest paid, if any, shall be refunded: Provided further that in respect of any period commencing on or before the 31st day of March, 1989 ending after that date, such interest shall, in respect of so much of such period as falls after that date, be calculated at the rate of one and one-half per cent for every month or part of a month. (2-A) Notwithstanding anything contained in sub-section (2) the Chief Commissioner or Commissioner may reduce or waive the amount of interest paid or payable by an assessee under the said sub-section if he is satisfied that - (i) payment of such amount has caused or would cause genuine hardship to the assessee; (ii) default in the payment of the amount on which interest has been paid or was payable under the said sub-section was due to circumstances beyond the control of the assessee; and (iii) the assessee has cooperated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him. (3) Without prejudice to the provisions contained in sub-section (2), on an appli....
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.... sub section (1), is the charging of simple interest, but sub section (2-A) empowers the Chief Commissioner or Commissioner to reduce or waive the interest. It is only after the failure of the assessee to make payment within the time limit prescribed under sub section (1) or the extended time limit prescribed under sub section (3) that he becomes an assessee in default under sub section (4) of Section 220. Under sub section (5), an assessee becomes an assessee in default, upon his failure to pay the instalments allowed under sub section (3). The Assessing Officer is also vested with the power under sub section (6) to treat the assessee as not being in default, upon such conditions as he may impose, if an appeal under Section 246 is pending. 38. Section 222 prescribes (i) attachment and sale of the assessee's movable property (ii) attachment and sale of the assessee's immovable property (iii) arrest of the assessee and his detention in prison and (iv) appointment of Receiver, as some of the modes of recovery of the amount due from an assessee in default or an assessee deemed to be in default. But these powers are exerciseable under Section 222, by a Tax Recovery Officer, after draw....
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.... revised return is not worth the piece of paper on which it is written. In the revised return, the petitioner has chosen to switch over to a different system of accounting, which is not acceptable to the respondents, even at the threshold. Therefore according to the respondents, the revised return is not a valid return under Section 139(5). Moreover, it is the contention of the respondents that a revised return is permissible only to correct an omission or a wrong statement and not to change the system of accounting. Therefore in effect, the respondents 1 and 2 have taken a position, that the revised return is not valid in law. 44. Having taken such a position, the second respondent could have passed an order rejecting the revised return on the short ground that it does not satisfy the requirements of Section 139(5) and proceeding further with the assessment on the basis of the original return. But the second respondent could not even do this, on account of the fact that the functions performed by him are quasi judicial in nature and that such rejection in limine, without scrutiny, will not be permissible. It is in this background of the reluctance on the part of the second respo....
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.... 48. In support of his contention that an overdraft facility cannot be the subject matter of a garnishee notice or order of attachment, the learned Senior Counsel for the petitioner relied upon the judgment of Justice N.Rajagopala Ayyangar in K.M.Adam vs. Income Tax Officer {33 ITR 26(Madras)}. It was held in the said decision that a banker who had offered overdraft facility, is not a debtor nor is it a person from whom money may become due, in respect of such overdraft facility. 49. However Mr.K.Subramaniam, learned Standing Counsel for the Department, submitted that the monies pouring into the current account of the petitioner, could not be segregated into "overdraft amounts" and "receipts to the Company" and that even if it could be segregated, the bank may claim a first charge on the amounts realised by the Company from its debtors. But this apprehension on the part of the respondents, appears to be unfounded, in view of Clause (v) of sub section (3) of Section 226, which declares that an order of attachment or a notice to a garnishee makes any subsequent claim on the same amount void. 50. In the light of the above discussion, I am of the considered view that it will be in....