JUDGMENT
1. The Tribunal, Allahabad, has referred following question of law under Section 256(2) of the IT Act, 1961 (hereinafter referred to as the Act), for opinion to this Court:
Whether, on the facts and in the circumstances of this case, the Tribunal was justified in holding that no period of limitation under Section 153(1)(c) was extended by virtue of revised return filed on 22nd March, 1977?
2. The reference relates to the asst. yr. 1974-75.
Briefly stated, the facts giving rise to the present case are as under.
The respondent is a public limited company and is engaged in the manufacture of textiles. The return for the asst. yr. 1974-75 was due under Section 139(1) by 31st July, 1974. The respondent-company had applied for extension of time which was allowed upto 7th Nov, 1974. However, the return was filed only on 6th Dec, 1974. Consequently, the respondent filed revised return on 22nd March, 1977. During the course of assessment proceeding on 27th Jan, 1978, the ITO passed an order for audit under Section 142(2A) of the Act. Against that order the respondent-company filed a writ petition in which this Court vide order dt. 15th Feb, 1978 had stayed the assessment proceedings till further orders. The writ petition was dismissed on 3rd March, 1987, as a result of which the interim order staying further proceeding came to an end and for the reasons best known to the Department, the assessment proceedings were not started. However, it moved an application for clarification before this Court seeking clarification as to whether the stay order was still operative or it has come to an end, then, on which date. This Court vide order dt. 18th Oct, 1989 clarified the position that the writ petition was dismissed on 3rd March, 1987 and consequently the stay order also came to an end by dismissal of the writ petition. The assessment proceeding resumed thereafter. An objection was raised before the assessing authority that assessment proceedings were barred by time as the same should have been completed by 31st March, 1977 and no extension of time under Section 153(1)(c) was available on account of return filed on 22nd March, 1977 as the return was not a valid return within the meaning of Section 139(5) of the Act. The assessing authority, however, did not accept the plea raised by the respondent and held that by virtue of return filed on 22nd March, 1977 the limitation under Section 153(1)(c) was available, and, therefore, the proceedings were not barred by limitation. Alternative plea was also taken by the respondents that this Court in the writ petition filed by it had passed an order staying further assessment proceeding, which had been dismissed on 3rd March, 1987 and, therefore, the order of stay stood terminated with the disposal of the writ petition on 3rd March, 1987 and assessment proceedings should have been completed within the period available after 3rd March, 1987 by excluding the period during which proceedings were stayed by this Court and from this view also the assessment was barred by limitation. The assessing authority did not accept this plea as according to him since this Court had stayed assessment proceedings until further orders, the limitation shall start from the date of order of the Court i.e., 18th Oct, 1989, on the application which was moved by the Department to clarify the position of the stay order.
3. Feeling aggrieved, the respondent preferred an appeal before the CIT(A), who has set aside the assessment order with a direction to pass fresh assessment order. However, the plea of limitation was not accepted by the CIT(A). Still feeling aggrieved, the respondent preferred further appeal before Tribunal. The Tribunal has held that the assessment was barred by limitation inasmuch as the period of limitation could not have been extended by virtue of return filed on 22.3.1977.
4. Heard Sri A.N. Mahajan, learned Counsel appearing for the Revenue, and Sri R.S. Agarwal, learned Counsel appearing for the respondent-assessee.
5. We find that the Supreme Court in Kumar Jagdish Chandra Sinha (Dead) through LRs, etc. v. CIT has held that where return is not filed within time or within the extended period as granted by the assessing authority the said return cannot be revised and any return filed thereafter pursuant to the earlier return is not a valid return in the eye of law. The limitation cannot be counted from the alleged revised return.
6. Respectfully following the aforementioned decision, we are of the opinion that the Tribunal was justified in holding that the period of limitation was not extended by virtue of revised return. We answer the question referred to us in the affirmative i.e., in favour of the assessee and against the Revenue. However, there shall be no order as to costs.