null V. Commissioner of Income Tax, Sambalpur

WP(C)/14034/2003

AI Insights

The case revolves around a writ petition filed by an assessee challenging the order of the Commissioner of Income Tax, Sambalpur, which declared the assessee's return of income as invalid. The Commissioner had issued a notice under Section 139(9) of the Income Tax Act, 1961, requiring the assessee to rectify defects in the return by providing a copy of his personal account. The assessee failed to comply within the prescribed time and did not seek an extension, leading to the return being treated as invalid. The court examined the circumstances and found no grounds to interfere with the Commissioner's decision, citing the principle that the law protects those who are vigilant, not those who sleep over their rights.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 806109 (HC-ODISHA)
• Appeal Type: Others
• Pronouncement Date: 05-11-2019
• Assessment Year: misc
• Other Referred Cases: Avon Sales Corporation vs. Income Tax Officer, Commissioner of Income Tax vs. Multiplan India Limited
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Keywords: Books of account; Defective return; Income Tax; Invalid Return; Personal Account
• Section: 264; 139(9)

Judgement Text

" 09. 05.11.2019 Heard. By way of this writ petition, the petitioner has challenged the order dated 11.12.2001 at Annexure-4 passed by the Commissioner of Income Tax, Sambalpur under Section 264 of the Income Tax Act,1961. The Commissioner of Income Tax while considering the matter in paragraph-6.1, 6.2.1, 6.2.2, 6.3.1 & 6.3.2 of the impugned order has observed as under: “6.1 I have gone through the records, considered the written submissions made by the learned Authorized Representative, the report of the present Assessing Officer and Authorized Representative’s statement during the course of hearing. The Assessee carried on the business of bus plying and contract business. He maintained Books of A/c in respect of the business of bus plying which is evident from the fact that he filed profit & loss A/c and Depreciation Chart in respect of the said business. His contention that he did not maintain Books of A/c. in respect of other business i.e. contract business also cannot be accepted; because the assessee himself vide his petition/letter dtd.13.11.2000 filed a copy of the Personal A/c incorporating therein his capital A/c, Secured and Unsecured Loans, Current Liabilities, Fixed Assets, Savings, Current Assets and Cash and Bank Balances. Had the assessee not maintained Books of A/c it could not have been possible on his part to file a copy of the Personal A/c after the order/letter dtd. 10.10.2000 was received by him. Filing of a copy of his personal A/c on 13.11.2000 and Profit & Loss A/c for bus plying business along with Return of Income amounts to implied admission that regular Books of A/c were maintained by the assessee. Personal A/c were deliberately not filed to escape from further queries as to the sources of investment of Rs.42,800/- in NSC & LIC (Premium) Rs.6,509/-, totaling to Rs.49,309/- as against drawings of only Rs.32,000/- and receipt from LIC Rs.10,012/-, totaling to Rs.42,012/- as revealed from the Personal A/c W.P.(C) No.14034 of 2003 -2- filed on 13.11.2000. In addition to this there was household expenses for the previous year. 6.2.1 The Assessing Officer had issued a notice dtd.21.2.2000 U/s 139(9) of the Act to remove the defect by 8.3.2000. This notice was received on 20.3.2000 by Shri R.K. Mishra, Advocate and authorized Representative of the assessee. Neither the assessee nor the learned Authorized Representative filed any petition asking for further time for filing the copy of personal A/c required under the notice dtd.21.2.2000. Even otherwise I find that as per the provisions of Sub-section 9 of Sec.139 of the Act, the assessee was required to remove the defect within the period of 15 days from the date of intimation or within such further period which, on an application made in this behalf and allowed by the Assessing Officer. If the assessee fails to do so, the return shall be treated as invalid return and the provisions of this Act shall apply as if the assessee failed to furnish the return. 6.2.2 Admittedly, the Authorized Representative received on 20.3.2000 a notice dtd.21.2.2000 requiring the assessee to furnish a copy of his personal A/c by 8.3.2000. Since the notice was received on 20.3.2000 the assessee should have filed a copy of his personal A/c by 4.4.2000 as per the provisions of Sub-section 9 of Section 139 of the Act. But he failed to comply with the said notice within 15 days i.e. by 4.4.2000 nor did he file any petition asking for further time. The assessee and the Authorized Representative kept silent for a long period of more than 6 (six) months and only after receiving the Order/letter dtd.10.10.2000, a copy of his personal A/c was filed vide his letter dtd.13.11.2000. In the circumstances the Assessing Officer had no alternative but to treat the Return of Income filed by the assessee as invalid. 6.3.1 The learned Authorized Representative has taken shelter under the case law namely Avon Sales Corporation vs. Income Tax Officer (1993) 47 ITJ (DEL) 290: 47 ITE 93 and prayed for treating the Return of Income as valid one. I have gone through the xerox copy of the case law furnished by the learned Authorized Representative. The ratio of the judgment in the above said case is as under: -3- “One of the reasons for treating the return as invalid is that the assessee did not file trading account, P & L account and balance sheet rendering it as invalid. The finding of the Assessing Officer and the appellate authority in this regard is not well founded. A return not accompanied by the trading account, P & L account and balance sheet is a defective return and s.139 (9) incorporated w.e.f. 1st Sept. 1980 by the Finance (No.2) Act of 1980 makes it obligatory for the Assessing Officer to inform the assessee about the defects in the return and allow a time of 15 days or further time as provided therein, for rectifying the defects. Should the assessee fail to rectify the defects within the time so allowed, the defective return would be rendered as invalid return. In this case, assessee was never informed of any defects in the return of income nor was any opportunity given for rectifying the defects. Under these circumstances, a return filed by the assessee would be a defective return but not an invalid return”. 6.3.2 This case law does not help the assessee because the facts of the instant case are different. In the case of the assessee notice under Sub-sec. 9 of sec.139 of the Act was issued to the assessee informing the defect. But he failed to rectify the defect within the time limit of 15 days from the date of service of the notice nor did he apply for further time. In fact, even after enjoying a deemed extension period of more than six months he failed to rectify the defect. In the circumstances, the claim for giving second opportunity to the assessee is untenable. Therefore, the case law cited by the Authorized Representative is not applicable, to the case of the assessee. In fact, the case law of Commissioner of Income Tax vs. Multiplan India Limited, 38 ITD 320, wherein it is held that the law protects those who are vigilant and not those who sleep over their rights, is applicable to the assessee’s case.” We have gone through the impugned order. In our considered opinion the finding arrived at by the Commissioner of Income Tax vide the impugned order is -4- just and proper and accordingly, the impugned order needs no interference after fifteen years. Accordingly, the writ petition stands dismissed. Misc. Case(s)/I.A.(s) connected to the writ petition, if any, is/are dismissed accordingly. SKG .……..........………… ( K.S. Jhaveri ) Chief Justice ……………….…….. ( K.R. Mohapatra ) Judge "