The Commissioner Of Income Tax-Ii, Coimbatore v. M/S. Periyar District Co-Op. Milk Producers Union Ltd., Erode

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 23/02/2004 CORAM THE HONOURABLE MR. JUSTICE A.S. VENKATACHALAMOORTHYANDTHE HONOURABLE MR. JUSTICE P.K. MISRA TAX CASE No.91 of 2004 The Commissioner of Income Tax-II,Coimbatore. .. Appellant -Vs- M/s. Periyar District Co-op.Milk Producers Union Ltd.,Erode. .. Respondent Tax Case Appeal arising out of ITA Nos.2163/Mds/94-Asst. year 1991-92 dated 29.8.2003 at the instance of the Revenue. For Appellant : Mr.K. Subramaniam :J U D G M E N T (The judgment of the Court was made by Justice P.K. MISRA)This appeal has been filed by the Commissioner of Income Tax,Coimbatore under Section 260A of the Income Tax Act, 1961. 2. Respondent is a Co-operative Society. For the Assessment Year 1991-92, the respondent Society filed its return declaring a loss ofRs.80,63,122/- and claimed the benefit of carry forward of the said loss.Subsequently, a revised return was filed after the final audit of accountsindicating higher loss. The Assessing Officer restricted the carry forward ofloss as per the original return. The Assessee / Respondent filed appeal. TheAppellate Authority while holding that the revised return was a valid return,observed that, for the purpose of carry forward of loss, the only return filedunder Section 139(3)can be taken into account. Accordingly, the order of theAssessing Officer was confirmed. Aggrieved by the aforesaid order, theassessee filed appeal before the Income Tax Appellate Tribunal. The Tribunalobserved that once a revised return was filed under Section 139(5), such areturn has to be considered. Accordingly, the Tribunal set aside the orderspassed by the Assessing Officer and the first Appellate Authority. 3. The contention of the learned counsel appearing for the appellant is to the effect that a revised return as contemplated under Section 139(5)can be filed in respect of a return which is filed under Section 139(1) and nosuch revised return is contemplated in respect of a return filed under Section139(3). 4. On the basis of the aforesaid contention, the appellant has soughtto raise the following substantial questions of law :- 1. Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in holding that the assessee couldfile a revised return u/s.139(5) claiming a higher amount of business loss tobe carried forward after filing the return of loss within the due dateprescribed u/s 139(3) ? 2. Whether on the facts and in the circumstances of the case, theIncome-tax Appellate Tribunal was right in holding that once a return of lossis filed u/s.139(3), it takes the character of return filed u/s 139(1) inrespect of which the assessee can file a revised return claiming a higheramount of loss, u/s 139(5) ? 5. After hearing the learned counsel for the appellant at length and after considering the relevant provisions and the materials onrecord, we do not consider this as a fit case for admission, as, according tous, no substantial question of law arises for determination. 6. To appreciate the contention of the learned counsel for the appellant, it is necessary to refer the relevant provisions, namelySections 139(3) and 139(5) of the Income Tax Act, which are quoted here under:- � 139(3) � If any person who has sustained a loss in any previous yearunder the head �Profits and gains of business or profession� or under the head�Capital gains� and claims that the loss or any part thereof should be carriedforward under sub-section (1) of section 72, or sub-section (2) of section 73,or sub-section (1) or sub-section (3 ) of section 74, or sub-section (3) ofsection 74A, he may furnish, within the time allowed under sub-section (1), areturn of loss in the prescribed form and verified in the prescribed mannerand containing such other particulars as may be prescribed, and all theprovisions of this Act shall apply as if it were a return under sub-section(1). 139(5)- If any person, having furnished a return under sub-section � 139(3) � If any person who has sustained a loss in any previous yearunder the head �Profits and gains of business or profession� or under the head�Capital gains� and claims that the loss or any part thereof should be carriedforward under sub-section (1) of section 72, or sub-section (2) of section 73,or sub-section (1) or sub-section (3 ) of section 74, or sub-section (3) ofsection 74A, he may furnish, within the time allowed under sub-section (1), areturn of loss in the prescribed form and verified in the prescribed mannerand containing such other particulars as may be prescribed, and all theprovisions of this Act shall apply as if it were a return under sub-section(1). 139(5)- 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 arevised return at any time before the expiry of one year from the end of therelevant assessment year or before the completion of the assessment, whicheveris earlier.� 7. A bare perusal of the aforesaid two provisions, more particularly the provision contained in Section 139(3), makes it clear that areturn of loss filed under Section 139(3) may be filed within the time allowed under Section 139(1). Once such a return is filed, all the provisions of theIncome Tax Act shall apply as if such return has been filed under Section139(1). This position is clear from the expression � . . . all theprovisions of this Act shall apply as if it were a return under sub-section(1).� In other words, a return filed under Section 139(3) is deemed to be areturn filed under Section 139(1). The provision contained in 139(3) makes itclear that all the provisions of this Act shall apply to such a return as ifit were a return under Section 139(1). In view of such a specific provision,there is no reason to exclude the applicability of Section 139(5) to a returnfiled under Section 139(3). 8. Learned counsel appearing for the appellant has further submitted that Section 80 of the Income Tax Act, which contains the provisionrelating to carry forward of loss, does not contemplate that a revised returncan be filed, and therefore, the loss as indicated in the original returnalone can be taken into account. We do not consider such a contention to betenable. In the face of the specific provision contained in Section 139(3)laying down that all the provisions contained in the Act shall apply to areturn under Section 139(1), there was no further necessity in Section 80 torefer so such provisions. On the other hand, there is no specific provisioncontained either in Section 80 or in Section 139 excluding the applicabilityof Section 139(5) to a return filed under Section 139(3) of the Income TaxAct. 9. For the aforesaid reasons, we are convinced that there isno substantial question of law involved in this appeal, which is accordinglydismissed at the stage of admission. dpk To M/s. Periyar District Co-op.Milk Producers Union Ltd.,Erode. �