In a significant case, the Supreme Court while upholding the order of the Madras High Court held that the Assessing Officer ( AO ) had no jurisdiction to consider the claim by Assessee in revised return filed after time prescribed under section 139(5) of Income Tax Act, 1961.
Shriram Investments, the appellant-assessee filed a return of income on 19th November 1989 under the Income Tax Act, 1961 ( ‘IT Act’) for the assessment year 1989-90. On 31st October 1990, the appellant filed a revised return. As per intimation issued under Section 143(1)(a) of the IT Act on 27th August 1991, the appellant paid the necessary tax amount. Later the appellant filed another revised return. The assessing officer did not take cognizance of the said revised return. The appellant preferred an appeal before the Commissioner of Income Tax (Appeals) ( ‘CIT (Appeals)’) which got dismissed on the ground that in view of Section 139(5) of the IT Act, the revised return filed on 29th October 1991 was barred by limitation.
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Being aggrieved, the appellant-assessee preferred an appeal before the Income Tax Appellate Tribunal (‘the Tribunal). The Tribunal partly allowed the appeal by remanding the case back to the file of the assessing officer. The assessing officer was directed to consider the assessee’s claim regarding the deduction of deferred revenue expenditure. The respondent Department preferred an appeal before the High Court of Judicature at Madras. The High Court proceeded to set aside the order of the Tribunal on the ground that after the revised return was barred by time, there was no provision to consider the claim made by the appellant.
The counsel appearing for the appellant pointed out that the Tribunal did not direct consideration of the revised return but the Tribunal was rightly of the view that the assessing officer can consider claim made by the appellant regarding deduction of deferred revenue expenditure in accordance with law. He submitted that the appellant was entitled to make a claim during the course of the assessment proceedings which otherwise was omitted to be specifically claimed in the return.
ASG submitted that after the revised return was barred by limitation, there was no question of considering the claim for deduction made by the appellant in the revised return.
The Apex court considered the appellate powers of the Tribunal under Section 254 of the IT Act. It was viewed that in the case of Goetzge (India) Ltd, the Court held that the assessing officer cannot entertain any claim made by the assessee otherwise than by following the provisions of the IT Act.
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The two Judge bench of Justice Abhay S. Oka And Justice Augustine George Masih found that the Tribunal had not exercised its power under Section 254 of the IT Act to consider the claim. Instead, the Tribunal directed the assessing officer to consider the appellant’s claim. The assessing officer had no jurisdiction to consider the claim made by the assessee in the revised return filed after the time prescribed by Section 139(5) for filing a revised return had already expired.
While dismissing the appeal, the Court upheld the impugned judgment of the High Court.
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