M/s.Kuthuparamba Range kallu Chethu Vyavasaya Thozhilali Sahakarana Sangham Ltd, Kannur v. The ITO, Kannur

ITA 229/COCH/2014 | 2009-2010
Pronouncement Date: 14-11-2014

Appeal Details

RSA Number 22921914 RSA 2014
Assessee PAN AADCK2392M
Bench Cochin
Appeal Number ITA 229/COCH/2014
Duration Of Justice 5 month(s) 29 day(s)
Appellant M/s.Kuthuparamba Range kallu Chethu Vyavasaya Thozhilali Sahakarana Sangham Ltd, Kannur
Respondent The ITO, Kannur
Appeal Type Income Tax Appeal
Pronouncement Date 14-11-2014
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 14-11-2014
Date Of Final Hearing 21-10-2014
Next Hearing Date 21-10-2014
Assessment Year 2009-2010
Appeal Filed On 16-05-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE S/SHRI N.R.S.GANESAN JM AND CHANDRA POOJ ARI AM I.T.A. NO. 229/COCH/2014 ASSESSMENT YEAR : 2009-10 M/S. KUTHUPARAMBA RANGE KALLU CHETHU VYAVASAYA THOZHILALI SAHAKARANA SANGAM LTD. R.V. CITY CENTRE P.O. KUTHUPARAMBA KANNUR DISTRICT-670 643. [PAN: AADCK 2392M] VS. THE INCOME TAX OFFICER WARD-2 KANNUR. (ASSESSEE -APPELLANT) (REVENUE-RESPONDEN T) ASSESSEE BY SHRI T.M. SREEDHARAN SR. COUNSEL REVENUE BY SHRI K.K.JOHN SR. DR DATE OF HEARING 21/10/2014 DATE OF PRONOUNCEMENT 14/11/2014 O R D E R PER CHANDRA POOJARI ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 04/02/2014 PASSED BY THE CIT(A) KOZHIKODE FOR THE ASSESSMENT YEAR 2009- 10. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A CO-OPERATIVE SOCIETY ENGAGED IN THE ACTIVITY OF TAPPING AND SALE OF TODDY. SINCE THE ASSESSEE DID NOT FILE THE RETURNS OF INCOME WITHIN THE TIME ALLOWED U/S. 139(1) OR 139(4) NOR IN RESPONSE TO THE NOTICES U/S . 148/142(1) THE I.T.A. NO.229/COCH/2014 2 ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S. 144 OF THE ACT ON THE BASIS OF MATERIALS AVAILABLE WITH HIM ON A TOTAL INCOME OF RS.95 55 20/-. 3. ON APPEAL THE CIT(A) RELIED ON THE DECISION OF THE ITAT COCHIN BENCH IN THE CASE OF KADACHIRA SERVICE CO-OP BANK LTD. VS . ITO IN I.T.A. NO. 251/COCH/2012 DATED 31-01-2013 AND HELD THAT THE BE LATED RETURN FILED BEYOND THE TIME LIMIT PROVIDED U/S. 139(1) OR 139(4 ) OR TIME SPECIFIED IN NOTICE U/S. 142(1) OR 148 OF THE ACT CANNOT BE CONS IDERED AS RETURN OF INCOME FOR DEDUCTION U/S. 80P OF THE ACT. SINCE THE FACTS AND CIRCUMSTANCES OF THE ABOVE CASE ARE SIMILAR TO THE PRESENT CASE THE CIT (A) UPHELD THE DISALLOWANCE OF CLAIM OF DEDUCTION U/S. 80P MADE BY THE ASSESSEE. AGAINST THIS THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LD. AR SUBMITTED THAT THE ASSESSEE CLAIMED E XEMPTION FOR THE INCOME OF THE SOCIETY U/S. 80P(2)(A)IVI) AND 80P(2) (A)(III) OF THE I.T. ACT. 80P(2)(A)(III) RELATES TO THE DEDUCTION ON ACCOUNT OF MARKETING OF AGRICULTURAL PRODUCE GROWN BY ITS MEMBERS. ACCORDING TO THE LD. AR SECTION 80P(2)(A)(IV) RELATES TO COLLECTIVE DISPOSAL OF THE LABOUR OF ITS MEMBERS. IN THE PRESENT CASE THE ASSESSEE-SOCIETY IS FORMED BY THE WORKERS WHO ARE ENGAGED IN TODDY TAPPING AND ALSO ENGAGED IN SELLIN G TODDY WHICH ARE TAPPED BY THE MEMBERS OF THE SOCIETY FROM THEIR OWN COCONU T TREES. ACCORDING TO THE LD. AR THE BUSINESS IS GOVERNED BY THE KERALA ABKARI ACT AND THE AREA OF OPERATION OF THE SOCIETY IS WITHIN THE KUTHUPARAMBA EXCISE RANGE. THE LD. I.T.A. NO.229/COCH/2014 3 AR SUBMITTED THAT THE TURNOVER OF TODDY AND AGRICUL TURAL PRODUCTS FOR THE ASSESSMENT YEAR 2009-10 WOULD SHOW THAT THE PREDOMI NANT ACTIVITY IS THE SALE OF TODDY. ACCORDING TO THE LD. AR THE ASSESS EE HAD FURNISHED NAMES AND ADDRESSES OF THE MEMBERS FROM WHOM THE TODDY WA S PURCHASED DURING THE YEAR BEFORE THE CIT(A) TO PROVE THAT ITS OBJECT WAS TODDY TAPPING AND SELLING. THEREFORE THE LD. AR SUBMITTED THAT THE INCOME FROM SALE OF TODDY WHICH IS AN AGRICULTURAL PRODUCE OF THE MEMBERS IS OUTSIDE THE PURVIEW OF THE INCOME TAX ACT AND NOT INCLUDABLE IN THE TOTAL INCO ME AND SUCH INCOME IS LIABLE TO BE EXCLUDED FROM TOTAL INCOME U/S. 80P(2) (A)(III) OF THE I.T. ACT. 5. ON THE OTHER HAND THE LD. DR RELIED ON THE ORDE R OF THE LOWER AUTHORITIES. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORD. WE FIND THAT A SIMILAR CAME UP FOR CONSIDERATION BEFORE THE TRIB UNAL IN THE CASE OF KADACHIRA SERVICE CO-OP BANK LTD. VS. ITO REPORTED IN (2013) 30 TAXMAN.COM 32 (COCHIN TRIB.) THE RELEVANT PORTION OF THE OBSE RVATIONS OF THE TRIBUNAL IS EXTRACTED BELOW: 11. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO T HE SUBMISSIONS MADE ON EITHER SIDE. THE QUESTION ARISES FOR CONSID ERATION IS WHEN THE TAXPAYERS HAVE NOT FILED THE RETURNS OF INCOME WITH IN THE TIME LIMIT PROVIDED U/S 139(1) OR 139(4) OR WITHIN THE TIME SP ECIFIED IN THE NOTICE U/S 142(1) OF THE ACT WHETHER SUCH TAXPAYERS ARE E NTITLED FOR DEDUCTION U/S 80P OF THE ACT. I.T.A. NO.229/COCH/2014 4 12. TO ANSWER THE ABOVE QUESTION LET US FIRST EXAM INE WHETHER THE COOPERATIVE SOCIETIES ARE LIABLE TO FILE THE RETURN OF INCOME UNDER THE INCOME TAX ACT OR NOT. THIS ISSUE NEEDS TO BE CONS IDERED SINCE SOME OF THE TAXPAYERS UNDER APPEAL CLAIMED THAT THEY WER E UNDER THE BONA FIDE IMPRESSION THAT RETURN NEED NOT BE FILED. WE H AVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 139 OF THE ACT. S ECTION 139(1) READS AS FOLLOWS: 139(1) EVERY PERSON - (A) BEING A COMPANY OR A FIRM; OR (B) BEING A PERSON OTHER THAN A COMPANY OR A FIRM IF HIS TOTAL INCOME OR THE TOTAL INCOME OF ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DURING THE PREVIOUS YEAR EXCEEDED THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME-TA X SHALL ON OR BEFORE THE DUE DATE FURNISH A RETURN OF HIS INCOME OR THE INCOME OF SUCH OTHER PERSON DURING THE PREVIOUS YEA R IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANN ER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED: PROVIDED THAT A PERSON REFERRED TO IN CLAUSE (B) WHO IS NOT REQUIRED TO FURNISH A RETURN UNDER THIS SUB-SECTION AND RESIDIN G IN SUCH AREA AS MAY BE SPECIFIED BY THE BOARD IN THIS BEHALF BY NOT IFICATION IN THE OFFICIAL GAZETTE AND WHO DURING THE PREVIOUS YEAR INCURS AN EXPENDITURE OF FIFTY THOUSAND RUPEES OR MORE TOWARD S CONSUMPTION OF ELECTRICITY OR AT ANY TIME DURING THE PREVIOUS YEAR FULFILS ANY ONE OF THE FOLLOWING CONDITIONS NAMELY:- (I) IS IN OCCUPATION OF AN IMMOVABLE PROPERTY EXCEE DING A SPECIFIED FLOOR AREA WHETHER BY WAY OF OWNERSHIP TENANCY OR OTHERWISE AS MAY BE SPECIFIED BY THE BOARD IN THIS BEHALF; OR (II) IS THE OWNER OR THE LESSEE OF A MOTOR VEHICLE OTHER THAN A TWOWHEELED MOTOR VEHICLE WHETHER HAVING ANY DETACH ABLE SIDE CAR HAVING EXTRA WHEEL ATTACHED TO SUCH TWO-WHEELED MOT OR VEHICLE OR NOT; OR (III) OMITTED BY THE FINANCE ACT 2005 W.E.F. 1.4.2 006 (IV) HAS INCURRED EXPENDITURE FOR HIMSELF OR ANY OT HER PERSON ON TRAVEL TO ANY FOREIGN COUNTRY; (V) IS THE HOLDER OF A CREDIT CARD NOT BEING AN DD-ON CARD ISSUED BY ANY BANK OR INSTITUTION; OR (VI) IS A MEMBER OF A CLUB WHERE ENTRANCE FEE CHARG ED IS TWENTY FIVE THOUSAND RUPEES OR MORE SHALL FURNISH A RETURN OF HIS INCOME DURING ANY PR EVIOUS YEAR ENDING BEFORE THE 1 ST DAY OF APRIL 2005 ON OR BEFORE THE DUE DATE IN TH E PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANN ER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED: I.T.A. NO.229/COCH/2014 5 PROVIDED FURTHER THAT THE CENTRAL GOVERNMENT MAY BY NOTIFICATION IN THE OFFICIAL GAZETTE SPECIFY THE CLASS OR CLASSES OF PERSONS TO WHOM THE PROVISIONS OF THE FIRST PROVISO SHALL NOT APPLY : PROVIDED ALSO THAT EVERY COMPANY OR A FIRM SHALL FURNISH ON OR BE FORE THE DUE DATE THE RETURN IN RESPECT OF ITS INCOME OR LOSS IN EVERY PREVIOUS YEAR: PROVIDED ALSO THAT EVERY PERSON BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY OR AN ASSOCIATION OF PERSONS OR A BODY OF INDIVIDUALS WHETHER INCORPORATED OR NOT OR AN ARTIFICIAL JURID ICAL PERSON IF HIS TOTAL INCOME OR THE TOTAL INCOME OF ANY OTHER PERSON IN R ESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DURING THE PREVIOUS YE AR WITHOUT GIVING EFFECT TO THE PROVISIONS OF SECTION 10A OR SECTION 10B OR SECTION 10BA OR CHAPTER VI-A EXCEEDED THE MAXIMUM AMOUNT WHICH I S NOT CHARGEABLE TO INCOME-TAX SHALL ON OR BEFORE THE D UE DATE FURNISH A RETURN OF HIS INCOME OR THE INCOME OF SUCH OTHER PE RSON DURING THE PREVIOUS YEAR IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED. 13. IN VIEW OF THE ABOVE UNLESS THE CENTRAL GOVERN MENT BY A NOTIFICATION IN THE OFFICIAL GAZETTE EXEMPTS THE CO -OPERATIVE SOCIETIES FROM FILING THE RETURNS THEY HAVE TO FILE THE RETU RN OF INCOME. THEREFORE IT MAY NOT BE CORRECT TO SAY THAT THE CO-OPERATIVE SOCIETIES WERE UNDER THE IMPRESSION THAT THEY NEED NOT FILE THEIR RETURN S OF INCOME SINCE THEIR INCOME WAS EXEMPTED. A STATUTORY LIABILITY OF FILIN G THE RETURN UNDER THE INCOME-TAX CANNOT BE DISOWNED ON THE GROUND THAT TH EY WERE UNDER A BONA FIDE IMPRESSION. FURTHERMORE SECTION 276CC OF THE INCOME-TAX ACT 1961 MAKES IT A PUNISHABLE OFFENCE IN CASE THE RETURN OF INCOME WHICH IS REQUIRED TO BE FILED U/S 139(1) OR ON ISSU ANCE OF A NOTICE U/S 142(1) ETC. IS NOT FILED. THEREFORE IT IS OBVIOUS THAT THE RETURN HAS TO BE FILED WITHIN THE TIME LIMIT PRESCRIBED U/S 139(1) O R ATLEAST WITHIN THE TIME SPECIFIED IN THE NOTICE U/S 142(1). IF THE RETURN W AS NOT FILED BY THE TAXPAYERS THEN THE CONSEQUENTIAL PENAL PROVISIONS AS PROVIDED IN SECTION 276CC OF THE ACT WOULD FOLLOW. WE FIND THAT THE APEX COURT IN THE CASE OF PRAKASH NATH KHANNA & ANR VS C.I.T. (20 04) 266 ITR 1 (SC) HAD AN OCCASION TO CONSIDER THE SCOPE AND AMBI T OF SECTION 276CC OF THE ACT. AFTER EXAMINING VARIOUS JUDGMENTS ON THE SUBJECT AND THE PROVISIONS OF SECTION 139(1) THE APEX COUR T FOUND THAT THE TIME LIMIT FOR FILING THE RETURN OF INCOME IS INDICATED ONLY IN SUB SECTION (1) OF SECTION 139 AND NOT IN SUB SECTION (4) OF SECTION 1 39. THEREFORE EVEN IF THE RETURN WAS FILED IN TERMS OF SUB SECTION (4) OF SECTION 139 THAT WILL NOT DILUTE THE INFRACTION IN NOT FURNISHING THE RET URN WITHIN THE TIME AS PRESCRIBED UNDER SUB SECTION (1) OF SECTION 139. TH E APEX COURT FURTHER FOUND THAT ACCEPTING THE PLEA OF THE TAXPAYER THAT THE RETURN CAN BE FILED I.T.A. NO.229/COCH/2014 6 UNDER SUB SECTION (4) OF SECTION 139 WOULD MEAN THA T A PERSON WHO HAS NOT FILED THE RETURN WITHIN THE DUE TIME AS PRESCRI BED UNDER SUB SECTION (1) AND SUB SECTION (2) OF SECTION 139 WOULD BENEFI T BY FILING RETURN OF INCOME UNDER SUB SECTION (4) OF SECTION 139 FILED M UCH LATER. THE APEX COURT OBSERVED THAT WAS NOT THE LEGISLATIVE INTENT . FOR CONVENIENCE WE ARE REPRODUCING THE OBSERVATIONS MADE BY THE APEX C OURT AT PAGES 10 & 11 OF THE ITR: ONE OF THE SIGNIFICANT TERMS USED IN SECTION 276C C IS IN DUE TIME. THE TIME WITHIN WHICH THE RETURN IS TO BE FURNISHED IS INDICATED ONLY IN SUB-SECTION (1) OF SECTION 139 AND NOT IN SUB-SECTI ON (4) OF SECTION 139. THAT BEING SO EVEN IF A RETURN IS FILED IN TE RMS OF SUB-SECTION (4) OF SECTION 139 THAT WOULD NOT DILUTE THE INFRACTION IN NOT FURNISHING THE RETURN IN DUE TIME AS PRESCRIBED UNDER SUB-SECTION (1) OF SECTION 139. OTHERWISE THE USE OF THE EXPRESSION IN DUE TIME WOULD LOSE ITS RELEVANCE AND IT CANNOT BE SAID THAT THE SAID EXPRE SSION WAS USED WITHOUT ANY PURPOSE. BEFORE SUBSTITUTION OF THE EXP RESSION CLAUSE (I) OF SUB-SECTION (1) OF SECTION 142BY THE DIRECT TAX LAWS (AMENDMENT) ACT 1987 WITH EFFECT FROM APRIL 1 1989 THE EXPR ESSION USED WAS SUB-SECTION (2) OF SECTION 139. AT THE RELEVANT P OINT OF TIME THE ASSESSING OFFICER WAS EMPOWERED TO ISSUE A NOTICE R EQUIRING FURNISHING OF A RETURN WITHIN THE TIME INDICATED TH EREIN. THAT MEANS THE INFRACTIONS WHICH ARE COVERED BY SECTION 276CC RELA TE TO NON- FURNISHING OF RETURN WITHIN THE TIME IN TERMS OF SU B-SECTION (1) OR INDICATED IN THE NOTICE GIVEN UNDER SUB-SECTION (2) OF SECTION 139. THERE IS NO CONDONATION OF THE SAID INFRACTION EVE N IF A RETURN IS FILED IN TERMS OF SUB-SECTION (4). ACCEPTING SUCH A PLEA WOULD MEAN THAT A PERSON WHO HAS NOT FILED A RETURN WITHIN THE DUE TI ME AS PRESCRIBED UNDER SUB-SECTION (1) OR (2) OF SECTION WOULD GET B ENEFIT BY FILING THE RETURN UNDER SECTION 139(4)MUCH LATE. THIS CANNOT C ERTAINLY BE THE LEGISLATIVE INTENT. 14. THE APEX COURT HAS ALSO CONSIDERED THE SCOPE OF INTERPRETATION OF THE STATUTORY PROVISIONS. THE APEX COURT FOUND THAT WHEN THE LANGUAGE EMPLOYED IN THE STATUTE IS PLAIN AND UNAMBIGUOUS C OURT CANNOT READ ANYTHING INTO THE STATUTORY PROVISIONS. WHILE INTER PRETING THE PROVISIONS THE COURT ONLY INTERPRETS THE LAW AND CANNOT LEGISL ATE IT. IF A PROVISION OF LAW IS MISUSED AND SUBJECTED TO THE ABUSE OF PROCES S OF LAW IT IS FOR THE LEGISLATURE TO AMEND MODIFY OR REPEAL IT IF DEEME D NECESSARY. IN FACT THE APEX COURT HAS OBSERVED AS FOLLOWS AT PAGE 9 OF THE ITR: IT IS A WELL SETTLED PRINCIPLE IN LAW THAT THE CO URT CANNOT READ ANYTHING INTO A STATUTORY PROVISION WHICH IS PLAIN AND UNAMB IGUOUS. A STATE IS I.T.A. NO.229/COCH/2014 7 AN EDICT OF THE LEGISLATURE. THE LANGUAGE EMPLOYED IN A STATUTE IS THE DETERMINATIVE FACTOR OF LEGISLATURE INTENT. THE FIR ST AND PRIMARY RULE OF CONSTRUCTION IS THAT THE INTENTION OF THE LEGISLATI ON MUST BE FOUND IN THE WORDS USED BY THE LEGISLATURE ITSELF. THE QUESTION IS NOT WHAT MAY BE SUPPOSED AND HAS BEEN INTENDED BUT WHAT HAS BEEN SA ID. STATUTES SHOULD BE CONSTRUED NOT AS THEOREMS OF EUCLID. JU DGE LEARNED HAND SAID BUT WORDS MUST BE CONSTRUED WITH SOME IMAGIN ATION OF THE PURPOSES WHICH LIE BEHIND THEM. (SEE LENIGH VALLEY COAL CO. V. YENSAVAGE (218 FR 547). THE VIEW WAS REITERATED IN UNION OF INDIA V. FILIP TIAGO DE GAMA OF VEDEM VASCO DE GAMA AIR 199 0 SC 981 AND PADMA SUNDARA RAO V. STATE OF TAMIL NADU [2002] 3 SCC 533; [2002] 255 ITR 147 (SC). IN D.R. VENKATACHALAM V. DEPUTY TRANSPORT COMMISSIO NER [1977] 2 SCC 273 IT WAS OBSERVED THAT COURTS MUST AVOID THE DANGER IF A PRIORI DETERMINATION OF THE MEANING OF A PROVISION BASED O N THEIR OWN PRECONCEIVED NOTIONS OF IDEOLOGICAL STRUCTURE OF SC HEME INTO WHICH THE PROVISION TO BE INTERPRETED IS SOMEWHAT FITTED. THE Y ARE NOT ENTITLED TO USURP LEGISLATURE FUNCTION UNDER THE DISGUISE OF IN TERPRETATION. WHILE INTERPRETING A PROVISION THE COURT ONLY INTERPRETS THE LAW AND CANNOT LEGISLATE IT. IF A PROVISION OF LAW IS MISUSED AND SUBJECTED TO THE ABUSE OF PROCESS OF LAW IT IS FOR THE LEGISLATURE TO AME ND MODIFY OR REPEAL IT IF DEEMED NECESSARY. (SEE RISHABH AGRO INDUSTRIES L TD. V. P.N.B. CAPITAL SERVICES LTD [2005] 5 SCC 515; [2000] 101 C OMP CAS 284). THE LEGISLATURE CAUSU OMISSUS CANNOT BE SUPPLIED BY JUDICIAL INTERPRETATIVE PROCESS. 15. IN VIEW OF THE ABOVE IT IS OBVIOUS THAT WHEN T HE LANGUAGE OF THE PROVISION IS PLAIN AND UNAMBIGUOUS THE LANGUAGE EM PLOYED IN THE STATUTE IS THE DETERMINATIVE FACTOR OF THE LEGISLAT IVE INTENT. AS OBSERVED BY THE APEX COURT THE LEGISLATIVE INTENTION MUST B E FOUND IN THE WORDS USED BY THE LEGISLATURE ITSELF. 16. WITH THE ABOVE BACKGROUND LET US NOW EXAMINE T HE PROVISIONS OF SECTION 80A(5) OF THE ACT. SECTION 80A(5) OF THE AC T WAS INTRODUCED BY FINANCE (NO.2) ACT OF 2009 WITH RETROSPECTIVE EFFEC T FROM 01-04-2003. SECTION 80A(5) READS AS FOLLOWS: 80A(5) WHERE THE ASSESSEE FAILS TO MAKE A CLAIM IN HIS RETURN OF INCOME FOR ANY DEDUCTION UNDER SECTION 10A OR SECTI ON 10AA OR SECTION 10B OR SECTION 10BA OR UNDER ANY PROVISION OF THIS CHAPTER UNDER THE HEAD C.-DEDUCTIONS IN RESPECT OF CERTAIN INCOMES NO DEDUCTION SHALL BE ALLOWED TO HIM THEREUNDER. I.T.A. NO.229/COCH/2014 8 THIS SECTION 80A(5) WAS INTRODUCED BY FINANCE ACT 2009 ALONG WITH SUB SECTION (4) OF SECTION 80A. WHILE INTRODUCING T HE SECTION THE INTENTION OF THE LEGISLATURE WAS TO AVOID MULTIPLE DEDUCTIONS IN RESPECT OF THE SAME PROFIT. IN ORDER TO AVOID MULTIPLE DEDU CTIONS IN RESPECT OF THE SAME PROFIT THE LEGISLATURE HAS IMPOSED THREE CONDITIONS FOR CLAIMING DEDUCTION U/S 10A OR SECTION 10AA OR SECTI ON 10B OR SECTION 10BA OR UNDER ANY PROVISIONS OF CHAPTER VIA UNDER T HE HEAD C.- DEDUCTIONS IN RESPECT OF CERTAIN INCOMES. THE THREE CONDITIONS ARE AS FOLLOWS: (I) IF A DEDUCTION IN RESPECT OF ANY AMOUNT WAS ALL OWED U/S. 10A 10AA OR 10B OR 10BA OR UNDER PROVISIONS OF CHAPTER VIA U NDER THE HEAD C.-DEDUCTIONS IN RESPECT OF CERTAIN INCOMES IN AN Y ASSESSMENT YEAR THEN THE SAME DEDUCTION IN RESPECT OF THE SAME PROF IT & GAINS SHALL NOT BE ALLOWED UNDER ANY OTHER PROVISIONS OF THE AC T FOR SUCH ASSESSMENT YEAR; (II) THE AGGREGATE DEDUCTION UNDER VARIOUS PROVISIO NS SHALL NOT EXCEED THE PROFIT AND GAINS OF THE UNDERTAKING OR UNIT OR ENTERPRISE OR THE BUSINESS PROFIT AS THE CASE MAY BE; AND (III) THERE SHALL BE A CLAIM MADE IN THE RETURN OF INCOME. 17. THE LEGISLATURE IN THEIR WISDOM THOUGHT IT FIT THAT IMPLEMENTATION OF THESE THREE CONDITIONS WOULD PREVENT MISUSE AND TO AVOID MULTIPLE CLAIM OF DEDUCTION U/SS 10A 10AA 10B OR 10BA OR UNDER A NY PROVISIONS OF CHAPTER VIA UNDER THE HEAD C.-DEDUCTIONS IN RESPEC T OF CERTAIN INCOMES. CONDITION NO.(III) IS ALSO MANIFEST IN PROVISIONS O F SECTION 80A(5) OF THE ACT. THEREFORE A PLAIN READING OF THE LANGUAGE OF SECTION 80A(4) AND 80A(5) MAKES IT CLEAR THE PURPOSE AND INTENT OF THE LEGISLATURE. IT DOES NOT REQUIRE ANY FURTHER INTERPRETATION. 18. THE QUESTION NOW ARISES FOR CONSIDERATION IS WH ETHER FILING OF RETURN OF INCOME AND MAKING A CLAIM THEREIN IN RESPECT OF DEDUCTION U/S 80P IS MANDATORY OR DISCRETIONARY? 19. LET US NOW EXAMINE THE OTHER PROVISIONS OF THE INCOME-TAX ACT 1961 WHERE SUCH A DEDUCTION IS PROVIDED TO APPRECIA TE THE PROVISIONS OF SECTION 80A(5) OF THE ACT. BY FINANCE ACT 2005 WIT H EFFECT FROM 01-04- 2006 A PROVISO WAS INSERTED IN SECTION 10A(1A) OF T HE ACT WHICH READS AS FOLLOWS: I.T.A. NO.229/COCH/2014 9 PROVIDED THAT NO DEDUCTION UNDER THIS SECTION SHALL BE ALLOW ED TO AN ASSESSEE WHO DOES NOT FURNISH A RETURN OF HIS INCOM E ON OR BEFORE THE DUE DATE SPECIFIED UNDER SUB-SECTION (1) OF SECTION 139. A SIMILAR PROVISO WAS INTRODUCED TO SECTION 10B(1) OF THE ACT. HOWEVER SUCH A PROVISO WAS NOT INCORPORATED IN SEC TION 10AA AND SECTION 10BA OF THE ACT. SUBSEQUENTLY BY WAY OF FIN ANCE ACT 2009 A COMPREHENSIVE PROVISION WAS INTRODUCED AS SECTION 8 0A(5) REQUIRING THE TAXPAYER TO MAKE A CLAIM IN THE RETURN OF INCOM E FOR THE PURPOSE OF DEDUCTIONS U/S 10A 10B 10AA 10BA AND OTHER PROVI SIONS OF CHAPTER VIA UNDER C.-DEDUCTIONS IN RESPECT OF CERTAIN INCO MES. WHILE INTRODUCING SECTION 80A(5) THE LEGISLATURE WAS CONS CIOUS THAT FOR THE PURPOSE OF CLAIMING DEDUCTIONS U/S 10A AND 10B THE TAXPAYER HAS TO FILE A RETURN OF INCOME WITHIN THE TIME PRESCRIBED U/S 139(1) OF THE ACT. IN SPITE OF THAT IN SECTION 80A(5) THE TIME LIMIT PROVIDED IN SECTION 139(1) WAS NOT MENTIONED. THE LEGISLATURE SIMPLY SA YS THAT THE CLAIM FOR DEDUCTION SHALL BE MADE IN THE RETURN OF INCOME . 20. THE NEXT QUESTION FOLLOWS IS WHAT IS RETURN OF INCOME. WHETHER A RETURN FILED BEYOND THE TIME LIMIT PROVIDED U/S 139 (1) CAN BE CONSIDERED TO BE A RETURN OF INCOME. IF THE RETURN OF INCOME F ILED BEYOND THE TIME LIMIT PROVIDED U/S 139(1) WAS CONSIDERED AS RETURN OF INC OME THEN THE TAXPAYER MAY CLAIM THAT THEY HAVE ALREADY FILED A R ETURN OF INCOME. THE APEX COURT HAD AN OCCASION TO EXAMINE THIS ISSUE IN THE CASE OF PRAKASH NATH KHANNA & ANR (SUPRA). WHILE CONSIDERING THE SC OPE AND AMBIT OF SECTION 276CC THE APEX COURT WHILE INTERPRETING TH E WORDS IN DUE TIME WHICH ARE FOUND IN SECTION 276CC OBSERVED THAT THE TIME WITHIN WHICH RETURN IS TO BE FURNISHED IS INDICATED ONLY IN SUB SECTION (1) OF SECTION 139 AND NOT IN SUB SECTION (4) OF SECTION 139. THAT BEI NG SO EVEN IF A RETURN IS FILED IN TERMS OF SUB SECTION (4) OF SECTION 139 WOULD NOT DILUTE THE INFRACTION IN NOT FURNISHING THE RETURN IN DUE TIME AS PRESCRIBED IN SECTION (1) OF SECTION 139. IN SECTION 80A(5) THE LEGISLATU RE OBVIOUSLY OMITTED TO MENTION THE WORDS IN DUE TIME. WHAT IT SAYS IS WH ERE THE TAXPAYER FAILS TO MAKE A CLAIM IN THE RETURN OF INCOME NO DEDUCTI ON SHALL BE ALLOWED. IT DOES NOT SAY THAT THE RETURN OF INCOME SHALL BE FUR NISHED IN DUE TIME. THEREFORE IT IS OBVIOUS THAT FOR THE PURPOSE OF SE CTION 276CC THE RETURN HAS TO BE FILED IN DUE TIME I.E. WITHIN THE TIME L IMIT PRESCRIBED U/S 139(1). HOWEVER FOR THE PURPOSE OF CLAIMING DEDUCTION U/S 80P IN VIEW OF THE LANGUAGE EMPLOYED IN SECTION 80A(5) WHAT IS REQUIRE D IS TO MAKE A CLAIM IN THE RETURN OF INCOME. THE RETURN MAY BE FILED EI THER U/S 139(1) OR 139(4) OR IN PURSUANCE OF A NOTICE ISSUED U/S 142(1 ) OR 148 OF THE ACT. IN VIEW OF THE ABSENCE OF THE WORDS IN DUE TIME IN S ECTION 80A(5) THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE RETU RN FILED U/S 139(1) OR I.T.A. NO.229/COCH/2014 10 139(4) OR WITHIN THE TIME LIMIT SPECIFIED IN SECTIO N 142(1) OR 148 CAN ALSO BE CONSIDERED AS RETURN OF INCOME WITHIN THE MEANIN G OF SECTION 80A(5) OF THE ACT. 21. THE NEXT QUESTION FOLLOWS IS WHEN THERE IS A FA ILURE ON THE PART OF THE TAXPAYER TO FILE RETURN OF INCOME WITHIN THE TIME L IMIT PROVIDED U/S 139(1) OR 139(4) OR WITHIN THE TIME SPECIFIED IN THE NOTIC E U/S 142(1) OR 148 BUT FILES THE RETURN OF INCOME BELATEDLY WHETHER SUCH RETURN COULD BE TREATED AS RETURN OF INCOME OR NOT? 22. AS WE HAVE ALREADY DISCUSSED WHEREVER IT IS NE CESSARY FOR THE TAXPAYER TO FILE THE RETURN OF INCOME WITHIN A SPEC IFIED DATE THE LEGISLATURE HAS MADE IT CLEAR BY INSERTING THE WORD S BEFORE THE DUE DATE SPECIFIED OR IN DUE TIME OR WITHIN THE TIME LIM IT. IN SECTION 80A(5) THE LEGISLATURE EXPRESSLY OMITTED TO INCLUDE THE WORDS WITHIN THE TIME LIMIT OR BEFORE THE DUE DATE SPECIFIED OR IN DUE TIME. T HEREFORE FOR THE PURPOSE OF CHAPTER VIA THE LEGISLATURE INTENDED NO T TO MAKE IT COMPULSORY THE FILING OF RETURN OF INCOME WITHIN TH E SPECIFIED TIME OR IN DUE TIME AS PROVIDED IN SECTION 139(1) OF THE ACT. IN FACT SECTION 80 R.W.S. 139(3) OF THE INCOME-TAX ACT WHICH PROVIDES FOR CAR RY FORWARD OF LOSSES MAKES THE TAXPAYER TO FILE THE RETURN OF INCOME WIT HIN THE TIME WITHIN THE TIME ALLOWED U/S 139(1) AS THE LAW STOOD AS OF NOW. HOWEVER AS SECTION 80 STOOD EARLIER THERE WAS NO TIME LIMIT PROVIDED I N SECTION 80 FOR FILING THE RETURN OF INCOME TO MAKE A CLAIM FOR CARRY FORW ARD OF LOSSES. THE APEX COURT AFTER CONSIDERING THE PROVISIONS OF SEC TION 80 AS IT STOOD AT THE RELEVANT POINT OF TIME IN THE CASE OF C.I.T. VS KULU VALLEY TRANSPORT CO P LTD (1970) 77 ITR 518 (SC) FOUND THAT THE RETU RN FILED U/S 139(4) BEFORE COMPLETION OF THE ASSESSMENT HAS TO BE CONSI DERED FOR CARRY FORWARD OF LOSSES. SUBSEQUENTLY THE LEGISLATURE AM ENDED SECTION 80 BY TAXATION LAWS AMENDMENT ACT 1984 WITH EFFECT FROM 01-04-1985 AND ANOTHER AMENDMENT WAS MADE BY DIRECT TAX LAWS AMEND MENT ACT 1987 WITH EFFECT FROM 01-04-1989. AS THE LAW STANDS FOR NOW NO LOSS WHICH HAS NOT BEEN DETERMINED IN PURSUANCE OF A RET URN FILED WITHIN THE TIME PROVIDED U/S 139(1) SHALL BE CARRIED FORWARD A ND SET OFF BUT BEFORE AMENDMENT OF SECTION 80 BY TAXATION LAWS AMENDMENT ACT 1984 WITH EFFECT FROM 01-04-1985 THERE WAS NO REQUIREMENT FOR FILING THE RETURN OF INCOME WITHIN THE TIME LIMIT PROVIDED U/S 139(1) OF THE ACT. THIS ISSUE HAS BEEN EXAMINED BY THE KERALA HIGH COURT IN THE CASE OF C.I.T. VS R CHANDRAN (1991) 191 ITR 328 (KER). AFTER CONSIDERIN G THE JUDGMENT OF THE APEX COURT IN KULU VALLEY TRANSPORT CO P LTD (S UPRA) THE KERALA HIGH COURT FOUND THAT IN VIEW OF THE LAW STOOD FOR THE ASSESSMENT YEAR 1976-77 THE TAXPAYER WAS ENTITLED TO CARRY FORWARD LOSS. AFTER REFERRING TO DIRECT TAXES (AMENDMENT) ACT 1987 THE KERALA HIGH COURT OBSERVED I.T.A. NO.229/COCH/2014 11 THAT AS THE SECTION STANDS AT PRESENT NO LOSS WHIC H HAS NOT BEEN DETERMINED IN PURSUANCE OF A RETURN FILED IN ACCORD ANCE WITH THE PROVISIONS OF SECTION 139(3) OF THE ACT SHALL BE CA RRIED FORWARD AND SET OFF IS TO BE PERMITTED. THEREFORE IT IS OBVIOUS THAT T HE LEGISLATURE MADE IT MANDATORY FOR FILING THE RETURN OF INCOME WITHIN TH E DUE DATE PRESCRIBED IN SECTION 139(1) AS FAR AS CARRY FORWARD OF LOSS U/S 80 IS CONCERNED. WHILE INTRODUCING SECTION 80A(5) THE LEGISLATURE WELL AWA RE THAT NOT ONLY FOR CARRY FORWARD OF LOSSES BUT ALSO FOR DEDUCTIONS U/S 10A 10B THE TAXPAYER HAS TO FILE THE RETURN OF INCOME WITHIN THE TIME LI MIT PRESCRIBED U/S 139(1) OF THE ACT. IN SPITE OF THAT THE LEGISLATURE OMITTE D TO MENTION THE WORDS WITHIN DUE TIME IN SECTION 80A(5) OF THE ACT. THE REFORE THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE RETURN OF INCOME FILED WITHIN THE TIME LIMIT PROVIDED IN SECTION 139(1) OR 139(4) OR TIME SPECIFIED IN THE NOTICE U/S 142(1) OR 148 CAN BE CONSIDERED AS RETURN OF IN COME. HOWEVER THE BELATED RETURN FILED BEYOND THE TIME LIMIT PROVIDED U/S 139(1) OR 139(4) OR TIME SPECIFIED IN NOTICE U/S 142(1) OR 148 OF THE A CT CANNOT BE CONSIDERED AS RETURN OF INCOME FOR DEDUCTION U/S 80P OF THE AC T. 23. THE NEXT QUESTION FOLLOWS FOR CONSIDERATION IS WHEN THE TAXPAYER HAS NOT FILED ANY RETURN OF INCOME EITHER U/S 139(1) OR U/S 139(4) OR IN PURSUANCE OF NOTICE ISSUED U/S 142 OR 148 WHETHER T HE TAXPAYER IS ENTITLED FOR DEDUCTION U/S 80P OF THE ACT. THE CONT ENTION OF THE TAXPAYERS MORE PARTICULARLY THE LD.SENIOR COUNSEL SHRI T.M. SREEDHARAN IS THAT LAW REQUIRES TO MAKE A CLAIM WHEN THE RETURN WAS FILED. WHEN THE RETURN WAS NOT FILED THE TAXPAYER CANNOT BE EXPECTED TO MAKE A CLAIM. THEREFORE WHEN THE RETURN WAS NOT FILED IRRESPECTIVE OF THE FACT THAT THE TAXPAYER HAS NOT MADE ANY CLAIM THE DEDUCTION HAS TO BE ALL OWED. THIS SUBMISSION OF THE LD.SENIOR COUNSEL IS VERY ATTRACT IVE. HOWEVER THIS TRIBUNAL DO NOT FIND ANY SUBSTANCE. SECTION 139(1) OF THE ACT AS WE DISCUSSED EARLIER MAKE IT MANDATORY FOR EVERY TAXP AYER WHOSE TOTAL INCOME EXCEEDS THE MAXIMUM AMOUNT WHICH IS NOT CHAR GEABLE TO INCOME-TAX BEFORE GRANT OF DEDUCTIONS U/S 10A 10B AND DEDUCTION UNDER CHAPTER VIA OF THE ACT TO FILE THE RETURN OF INCOME . IN THE CASE BEFORE US ADMITTEDLY ALL THE TAXPAYERS INCOME EXCEEDED THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME-TAX BEFORE GRANT OF DEDUCTION UNDER CHAPTER VIA OF THE ACT. THEREFORE IT IS NOT ONLY M ANDATORY BUT ALSO STATUTORY REQUIREMENT THAT ALL THE TAXPAYERS HAVE T O FILE THE RETURN OF INCOME BEFORE THE DUE DATE PRESCRIBED U/S 139(1) OF THE ACT. IF THERE WAS ANY FAILURE ON THE PART OF THE TAXPAYER TO FURNISH THE RETURN OF INCOME THE LEGISLATURE HAS MADE IT A PUNISHABLE OFFENCE U/S 27 6CC OF THE ACT. THEREFORE IT IS OBVIOUS THAT IT IS MANDATORY TO FI LE THE RETURN OF INCOME AS REQUIRED U/S 139(1) OF THE ACT IF THE TOTAL INCOME EXCEEDS THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME-TAX BEFORE GRANT OF DEDUCTIONS I.T.A. NO.229/COCH/2014 12 U/S 10A 10B AND UNDER CHAPTER VIA OF THE ACT. WHEN IT IS MANDATORY FOR THE TAXPAYER TO FILE THE RETURN OF INCOME THE TAXP AYER CANNOT CLAIM THAT THEY ARE ENTITLED FOR THE BENEFIT AVAILABLE UNDER T HE ACT WHEN THE RETURN ITSELF WAS NOT FILED. UNDER SECTION 80A(5) THE LEG ISLATURE MADE IT MANDATORY THAT THE CLAIM UNDER CHAPTER VIA UNDER TH E HEADING C.- DEDUCTIONS IN RESPECT OF CERTAIN INCOME HAS TO BE MADE IN THE RETURN. IF THE CONTENTION OF THE LD. SENIOR COUNSEL IS ACCEPTE D THEN THE PERSON WHO FILES THE RETURN OF INCOME AND FAILS TO MAKE A CLAI M OF DEDUCTION IN THE RETURN OF INCOME EITHER BY IGNORANCE OR OTHERWISE M AY NOT GET THE BENEFIT BUT A PERSON WHO HAS NOT FILED THE RETURN OF INCOME MAY BE IN A BETTER POSITION TO CLAIM THE BENEFIT. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THIS IS NOT THE INTENTION OF THE LEGISLATURE A T ALL. THE PERSONS WHO COMPLIED WITH THE PROVISIONS OF THE INCOME-TAX ACT BY FILING THE RETURN HOWEVER FAILED TO MAKE A CLAIM IN THE RETURN EITHE R BY IGNORANCE OR OTHERWISE CANNOT BE PUT IN A WORSE POSITION THAN A PERSON WHO HAS NOT FILED RETURN AS REQUIRED U/S 139 OF THE INCOME-TAX ACT. THE INTENTION OF THE LEGISLATURE IN ENACTING SECTION 80A(4) AND 80A(5) I S TO AVOID MULTIPLE DEDUCTION IN RESPECT OF THE SAME PROFIT. THE LEGISL ATURE PRESCRIBED THREE CONDITIONS IN SECTIONS 80A(4) AND 80A(5) WHICH ARE AS FOLLOWS: (I) IF A DEDUCTION IN RESPECT OF ANY AMOUNT WAS ALL OWED U/S. 10A 10AA OR 10B OR 10BA OR UNDER PROVISIONS OF CHAPTER VIA U NDER THE HEAD C.- DEDUCTIONS IN RESPECT OF CERTAIN INCOMES IN ANY AS SESSMENT YEAR THEN THE SAME DEDUCTION IN RESPECT OF THE SAME PROFIT & GAINS SHALL NOT BE ALLOWED UNDER ANY OTHER PROVISIONS OF THE ACT FOR S UCH ASSESSMENT YEAR; (II) THE AGGREGATE DEDUCTION UNDER VARIOUS PROVISIO NS SHALL NOT EXCEED THE PROFIT AND GAINS OF THE UNDERTAKING OR UNIT OR ENTERPRISE OR THE BUSINESS PROFIT AS THE CASE MAY BE; AND (III) THERE SHALL BE A CLAIM MADE IN THE RETURN OF INCOME. 24. THE LEGISLATURE IN THEIR WISDOM THOUGHT THAT TH E ABOVE THREE CONDITIONS WOULD AVOID MULTIPLE DEDUCTIONS IN RESPE CT OF SAME PROFIT. ONE OF THE CONDITIONS PRESCRIBED BY LEGISLATURE IN SECTION 80A(5) IS TO MAKE A CLAIM IN THE RETURN OF INCOME. THEREFORE AC CEPTING THE PLEA OF THE LEARNED SENIOR COUNSEL WOULD MEAN THAT A PERSON WHO HAS NOT FILED A RETURN WOULD GET BENEFIT BUT A PERSON WHO FILED THE RETURN BUT FAILED TO MAKE A CLAIM EITHER BY IGNORANCE OR OTHERWISE MAY N OT GET THE BENEFIT AT ALL. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THIS CANNOT CERTAINLY BE THE LEGISLATIVE INTENT. 25. MOREOVER ECONOMIC MEASURES ARE IMPLEMENTED ON TRIAL AND ERROR BASIS. THE LEGISLATURE IN THEIR WISDOM RESOLVED TO GRANT DEDUCTION IN I.T.A. NO.229/COCH/2014 13 RESPECT OF INCOME OF THE CO-OPERATIVE SOCIETIES. TO REGULATE / STREAMLINE THE DEDUCTION THE LEGISLATURE ENACTED SECTIONS 80A (4) AND 80A(5) AND ONE OF THE CONDITIONS IS TO MAKE A CLAIM IN THE RET URN OF INCOME. SECTION 80P IS ADMITTEDLY A BENEFICIAL PROVISION. IT IS SET TLED PRINCIPLES OF LAW THAT IN ORDER TO AVAIL BENEFITS UNDER THE BENEFICIA L PROVISION THE CONDITIONS PROVIDED BY THE LEGISLATURE HAS TO BE CO MPLIED WITH. THEREFORE THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT IN VIEW OF THE MANDATORY PROVISIONS CONTAINED IN SECTION 139(1) R. W.S. 80A(5) OF THE ACT IT IS MANDATORY FOR EVERY COOPERATIVE SOCIETY F OR CLAIMING DEDUCTION U/S 80P TO FILE THE RETURN OF INCOME AND TO MAKE A CLAIM OF DEDUCTION U/S 80P OF THE ACT IN THE RETURN ITSELF. IN VIEW OF THE ABOVE DISCUSSION IF THE RETURN WAS NOT FILED EITHER U/S 139(1) OR 139(4) OR IN PURSUANCE OF NOTICE ISSUED U/S 142(1) OR U/S 148 THE TAXPAYER IS NOT E NTITLED FOR ANY DEDUCTION UNDER SECTION 80P OF THE ACT. 26. THE NEXT CONTENTION OF THE TAXPAYER IS THAT WHE N THE RETURN WAS FILED BEFORE COMPLETION OF THE ASSESSMENT PROCEEDINGS TH E ASSESSING OFFICER OUGHT TO HAVE ISSUED NOTICE U/S 148 OF THE ACT FOR REGULARIZING THE RETURNS. WE HAVE CAREFULLY GONE THROUGH THE PROVISI ONS OF SECTION 147 & 148 OF THE ACT. SECTION 148 ENABLES THE ASSESSING O FFICER TO SERVE A NOTICE ON THE TAX PAYER TO FURNISH A RETURN OF INCO ME. SECTION 147 PROVIDES FOR CONDITION FOR ASSESSMENT OF THE INCOME WHICH ESCAPED ASSESSMENT. AS PER THE PROVISIONS OF SECTION 147 W HEN THE ASSESSING OFFICER HAS A REASON TO BELIEVE THAT ANY INCOME CHA RGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR THEN SU BJECT TO PROVISIONS OF SECTIONS 147 TO 153 HE MAY ASSESS OR REASSESS THE INCOME WHICH ESCAPED ASSESSMENT. THE QUESTION ARISE S FOR CONSIDERATION IS AT WHAT POINT OF TIME THE INCOME WOULD BE CONSIDERED TO BE ESCAPED ASSESSMENT. TO CONSIDER ANY INCOME CH ARGEABLE TO TAX AS ESCAPED ASSESSMENT THE ASSESSMENT PROCEEDINGS S HALL HAVE TO COME TO AN END EITHER BY ORDER U/S 143(3) OR OTHERW ISE BY OPERATION OF LAW. IN THE CASE BEFORE US ADMITTEDLY THE TAXPAYE R HAS NOT FILED ANY RETURN OF INCOME WITHIN THE TIME LIMIT SPECIFIED U/ S 139(1) OR 139(4) OF THE ACT. MOREOVER NO RETURN WAS FILED IN COMPLIANC E TO THE NOTICE ISSUED U/S 142(1) OF THE ACT EITHER. THE CONTENTION OF THE TAXPAYER IS THAT THE RETURN WAS FILED BELATEDLY BUT BEFORE COMP LETION OF THE ASSESSMENT PROCEEDINGS. IN THE CASE BEFORE US ADMI TTEDLY THE NOTICE U/S 142(1) WAS ISSUED AND THE ASSESSING OFFICER DIR ECTED THE TAXPAYER TO FILE THE RETURN OF INCOME. SINCE THE RETURN WAS NOT FILED THE ASSESSING OFFICER PROCEEDED FURTHER TO ASSESS THE INCOME U/S 144 OF THE ACT. THEREFORE WHEN THE SO-CALLED RETURN SAID TO BE FIL ED BY THE TAXPAYERS THE ASSESSMENT PROCEEDINGS WERE ALREADY PENDING. WH EN THE ASSESSMENT PROCEEDINGS ARE ADMITTEDLY PENDING ON TH E DATE OF FILING OF I.T.A. NO.229/COCH/2014 14 BELATED RETURN NO ONE COULD SAY THAT ANY INCOME CHA RGEABLE TO TAX HAS ESCAPED ASSESSMENT. UNLESS AND UNTIL THE ASSESSMEN T PROCEEDINGS INITIATED BY THE ASSESSING OFFICER BY ISSUING NOTIC E U/S 142(1) CULMINATED EITHER BY AN ASSESSMENT ORDER OR OTHERWISE BY OPERA TION OF LAW WE MAY NOT BE ABLE TO SAY THAT ANY PART OF INCOME CHAR GEABLE TO TAX HAS ESCAPED ASSESSMENT. THEREFORE THE ASSESSING OFFICE R HAD NO JURISDICTION AT ALL TO ISSUE NOTICE U/S 148 FOR ASS ESSING THE INCOME OF THE TAXPAYER. IN OTHER WORDS NO INCOME COULD BE SAID T O BE ESCAPED ASSESSMENT AT THAT POINT OF TIME. THEREFORE THE CO NTENTION OF THE LD. REPRESENTATIVE FOR THE TAXPAYER THAT NOTICE OUGHT T O HAVE BEEN ISSUED U/S 148 FOR REGULARIZING THE RETURNS FILED U/S 139( 4) HAS NO MERIT AT ALL. 27. FURTHERMORE A BARE READING OF SECTION 147 CLE ARLY SHOWS THAT THE ASSESSING OFFICER HAS TO BELIEVE THAT THE INCOME CH ARGEABLE TO TAX HAS ESCAPED ASSESSMENT. SECTION 148(2) MAKES IT MANDATO RY TO RECORD REASON FOR SUCH BELIEF. THEREFORE THE JURISDICTION TO ISSUE NOTICE U/S 147 IS THE BELIEF OF THE ASSESSING OFFICER WITH REGARD TO ESCAPEMENT OF INCOME FROM ASSESSMENT. THEREFORE THE TAXPAYER CAN NOT COMPEL THE ASSESSING OFFICER TO ISSUE NOTICE U/S 148 FOR REGUL ARIZATION OF THE RETURN FILED BELATEDLY. THE APEX COURT IN THE CASE OF CIT VS SUN ENGINEERING WORKS P LTD (1992) 198 ITR 297 320 (SC) EXAMINED T HE SCOPE OF SECTIONS 147 AND 148 AND FOUND THAT PROCEEDINGS U/S 147 ARE FOR THE BENEFIT OF THE REVENUE. IN VIEW OF THE ABOVE THIS TRIBUNAL FINDS NO MERIT IN THE CONTENTION OF THE TAXPAYER. 28. THE TAXPAYERS IN ITA NOS.251 253 & 254/COCH/20 12 CLAIM TO HAVE FILED THE RETURNS ON 07-12-2011; IN ITA NO. 255/COC H/2012 ON 30-09- 2011. THE TAXPAYERS IN ITA NOS.267 & 268/COCH/2012 HAVE NOT FILED THE RETURNS. THE ASSESSMENT YEAR UNDER CONSIDERATIO N IS 2009-10. ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR E XPIRES ON 31-03- 2011. ADMITTEDLY ALL THE RETURNS WERE FILED BEYOND 31-03-2011. THEREFORE THE RETURNS SAID TO BE FILED BY THE TAXP AYER CANNOT BE TREATED AS RETURNS FILED U/S 139(4) OF THE ACT. THEREFORE THE ASSESSING OFFICER HAS RIGHTLY DISALLOWED THE CLAIM OF THE TAXPAYERS U /S 80P OF THE ACT. 29. THE NEXT CONTENTION OF THE LD. TAXPAYERS IS THA T ALL THESE TAXPAYERS BEING A CO-OPERATIVE SOCIETIES FUNCTIONING IN THE R EMOTE VILLAGES IN THE STATE OF KERALA. THEREFORE THE LD. REPRESENTATIVE FOR THE TAXPAYERS PRAYED THAT A SYMPATHETIC VIEW MAY BE TAKEN. WE ARE CONSCIOUS THAT SYMPATHY IS ESSENTIAL FOR JUSTICE. WE ARE ALSO CONS CIOUS THAT SYMPATHY CANNOT REPLACE OR SUBSTITUTE THE PROVISIONS OF THE ACT. THEREFORE EVEN THOUGH WE HAVE SYMPATHY WITH THE TAXPAYERS IN VIEW OF THE SPECIFIC I.T.A. NO.229/COCH/2014 15 AND MANDATORY PROVISIONS OF SECTION 139 R.W.S. 80A( 5) OF THE ACT THIS TRIBUNAL DO NOT FIND ANY MERIT IN THE CLAIM OF THE TAXPAYER. TO BE CONSISTENT WITH THE VIEW TAKEN BY THE TRIBUN AL WE ARE INCLINED TO DISMISS THIS GROUND OF THE ASSESSEE. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. PRONOUNCED ACCORDINGLY ON 14-11 -2014 SD/- SD/- (N.R.S.GANESAN) (CHANDRA POOJARI) JUDICIAL MEMBER ACC OUNTANT MEMBER PLACE: KOCHI DATED: 14TH NOVEMBER 2014 GJ COPY TO: 1. M/S. KUTHUPARAMBA RANGE KALLU CHETHU VYAVASAYA T HOZHILALI SAHAKARNA SANGAM LTD. R.V. CITY CENTRE P.O. KUTHUPARAMBA K ANNUR DISTRICT-670 643. 2. THE INCOME TAX OFFICER WARD-2 KANNUR. 3. THE COMMISSIONER OF INCOME-TAX(APEALS) KOZHIKOD E. 4. THE COMMISSIONER OF INCOME-TAX KOZHIKODE. 5. D.R. I.T.A.T. COCHIN BENCH COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T. COC HIN