Section 139

Return of income

Constitutional validity

Filing of returns by persons satisfying economic criteria - The proviso to section 139(1) under which persons satisfying certain economic criteria are obliged to file a return irrespective of their income, cannot be termed as illegal or unconstitutional. No illegality could be found in the conditions prescribed for the purposes of filing the return. Filing of the return is simple and it cannot be termed as onerous. It must be treated as a duty of a citizen to file return even if he does not have an assessable income, provided he satisfies these conditions - P.P. Rajan v. Union of India [1999] 103 Taxman 95/236 ITR 815 (Ker.).

Voluntary return

Fixing of different dates for companies for filing returns is constitutionally valid - Companies constitute a different class by themselves, and therefore, prescribing different dates for filing return of income vis-a-vis other assessees cannot be considered to be violative of article 14 of the Constitution - N. Vinodkumar & Co. v. Union of India [1999] 237 ITR 502 (Kar.).

Any return filed before receipt of notice is a return filed under section 139(4) - Section 139(4) does not use the expression ‘voluntary return’. Whatever the impelling cause or motive, if a return otherwise valid is filed before the receipt of a valid notice for reassessment, it is to be treated as a return within section 139(4). It is not correct to say that every return made under section 139(4) must be a voluntary return in the sense that it must be suo motu - CIT v. S. Raman Chettiar [1965] 55 ITR 630 (SC).

Voluntary return cannot be filed after assessment is over - An assessee cannot seek to rectify his return on which assess­ment has already been made. The Act does not provide for any machinery for dealing with voluntary returns filed by an assessee after assessment of income for the year of assessment is complet­ed - Balchand v. ITO [1969] 72 ITR 197 (SC).

Firms/partners are not restrained from filing voluntary return - Undisputably, a firm is an assessee under section 2(7), whether it is registered or not. There is no provision under which a reconstituted firm or its alleged partners can be restrained from filing a return of income if they volunteer to file the same - Madan Mohan Paul v. CIT [1994] 209 ITR 374 (All.).

Political parties - Political parties are under a statutory obligation to file return of income in respect of each assessment in accordance with the provisions of the Income-tax Act and total income for this purpose has to be computed without giving effect to provisions of section 13A - Common Cause - A Registered Society v. Union of India [1996] 85 Taxman 600/222 ITR 260 (SC).

Revised return

Belated return cannot debar ITO from commencing reassessment proceedings - A revised return can be filed ‘at any time before the assessment is made’ and not thereafter; the lodging of such a belated return could not debar the ITO from commencing a proceed­ing for reassessment - Esthuri Aswathiah v. ITO [1961] 41 ITR 539 (SC).

Cases of concealments and false statements are not covered - Section 139(5) will apply only to cases of ‘omission or wrong statements’ and not to cases of ‘concealment or false statements’ - CIT v. J.K.A. Subra­mania Chettiar [1977] 110 ITR 602 (Mad.); Addl. CIT v. Radhey Shyam [1980] 123 ITR 125 (All.).

Omission/wrong statement must be due to bona fide inadvertence or mistake - The filing of a revised return after discovery of the omission or wrong statements is not by itself sufficient to bring the revised return within the ambit of section 139(5). A 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 - Sunanda Ram Deka v. CIT [1994] 210 ITR 988 (Gauhati).

Prior permission is not necessary - There is no provision in the Act to seek permission to file a revised return. It is the right of the assessee to submit such a return - Waman Padmanabh Dande v. CIT [1952] 22 ITR 339 (Nag.).

Revised return cannot be filed for withdrawing claims in original return correctly made - Where there was no wrong statement in the original return, the assessee could not file a revised return to withdraw its claim, for depreciation allowance merely to claim the benefit of set off of earlier year’s loss - CIT v. Andhra Cotton Mills Ltd. [1996] 219 ITR 404/88 Taxman 176 (AP).

Mere application to ITO would not amount to a revised return - Where, after filing the original return and receiving notice for production of accounts, the assessment an application to the ITO was made stating that a further income was required to be added to the declared income, it would not amount to filing a revised return - Gopaldas Parshottamdas v. CIT [1941] 9 ITR 130 (All.).

Status or method of accounting cannot be changed - The facility of filing a revised return cannot be availed for change of status and change in method of accounting, since that would not amount to an ‘omission’ or ‘wrong statement’ - Deepna­rain Nagu & Co. v. CIT [1986] 157 ITR 37 (MP).

Voluntary return under section 139(4) cannot be revised - Section 139(5) permits a later or revised return to be filed only when the return was filed under section 139(1). Filing of revised return is not contemplated under section 139(5) in cases governed by section 139(4) - Kumar Jagdish Chandra Sinha v. CIT [1996] 86 Taxman 122 (SC)/Dr. (Mrs.) Satyabhama Thakur v. CIT [1997] 223 ITR 791 (Pat.).

Revised return replaces original return - There is distinction between a revised return and a correction of the return. If the assessee files some application for cor­recting a return already filed or making amendments therein, it would not mean that he has filed a revised return. It will still retain the character of an original return, but once a revised return is filed, the original return must be taken to have been withdrawn and to have been substituted by a fresh return for the purpose of assessment - Dhampur Sugar Mills Ltd. v. CIT [1973] 90 ITR 236 (All.)/Chief CIT v. Machine Tool Corporation of India Ltd. [1992] 108 CTR (Kar.) 110.

(Contra)

Revised return does not wash away original return - The revised return filed under section 139(5) does not wash away the original return. An originally filed return is a return in all essential respects and the revised return only cures the defects contained in the original return - CIT v. Chitranjali [1986] 159 ITR 801 (Cal.).

Others - In a case where draft assessment order has already been made and referred to IAC with assessee’s objections, revised return filed by assessee cannot be entertained - Panchamahal Steel Ltd. v. U.A. Joshi, ITO [1997] 225 ITR 458/93 Taxman 1 (SC).

Valid/Invalid return

Return showing income below taxable limit is valid - A return showing income below taxable limit is a valid return - CIT v. Ranchhoddas Karsondas [1959] 36 ITR 569 (SC).

Return in an inapplicable Form is not invalid - A return by a company in a Form not meant for companies will not vitiate the return. The circumstance that the return was not accompanied by the profit and loss account or the balance-sheet will no doubt render the return incomplete but will not make it invalid so as to be treated as non est - Dhampur Sugar Mills Ltd. v. CIT [1973] 90 ITR 236 (All.).

Unsigned or unverified return is invalid - If a return is filed without signa­ture and verification, it will have to be treated to be an in­valid return. This cannot be a defect which can be cured and any return which has been filed without signature and verification of the asses­see, will not be treated as a valid return - Khialdas and Sons v. CIT [1997] 225 ITR 960/94 Taxman 394 (MP) [See also CIT v. Dr. Krishan Lal Goyal [1984] 148 ITR 283 (Punj. & Har.)].

Return can be treated as invalid only after assessment for relevant year is com­pleted or time-limit for assessment has expired - The question of treating a defective return as invalid pursuant to failure on the part of the assessee to cure the defects pointed out within the stipulated time, and visiting the assessee with the consequences of not filing the return will arise only after the assessment for the year for which the defective return is filed is completed, or after the time for completion of the assessment is over. This is for the reason that if the assessee filed the return curing the defect at any time before the said date, the assessing authority has got the power to condone the delay and to treat the return as valid - Kerala State Bamboo Corporation Ltd. v. CIT [1998] 101 Taxman 296 (Ker.).

Defective return

Specific defects are only illustrative and not exhaustive - The defects specified in section 139(9) are only illustrative and not exhaustive - CIT v. Rai Bahadur Bisses­swarlal Motilal Malwasie Trust [1992] 195 ITR 825 (Cal.).

Non-removal of defects within time allowed will invalidate return - The provisions in section 139(9) would override other provi­sions of the Act including section 292B. In a case where any of the specified defect is not removed within the time allowed, the return should be treated as an invalid return - National Insur­ance Co. Ltd. v. CIT [1994] 72 Taxman 161 (Cal.).

Defect must be one of the specified items - A return of income has to be regarded as defective only if it contains any of the defects referred to in Explanation to section 139(9). This provision makes a distinction between a defective return and an invalid return. A defective return is not ipso facto to be regarded as an invalid return. Thus a return of a company which is not signed and verified by its Managing Director is not a defective return, but an invalid return in the absence of any explanation - National Insurance Co. Ltd. v. CIT (supra).