Decided on May 05,1997


Cited Judgements :-



M. Srinivasan, C.J. - (1.)IN these writ petitions the only question that arises for consideration is whether the order passed by the Deputy Commissioner of INcome-tax, Special Range, Solan, declaring the returns filed by the assessee to be invalid as the conditions prescribed in Section 139(9) of the INcome-tax Act, 1961, have not been complied with is correct or not. It is seen from the order passed by the Deputy Commissioner that admittedly the assessee had not filed the audit report under Section 44AB along with the return. Sufficient opportunity was given to the assessee to rectify the return and file the requisite enclosures as required under Section 139(9) of the INcome-tax Act, 1961. The assessee gave an explanation that the audit could not be completed and the audit report was not available. The assessee filed the return along with the proforma accounts. The explanation of the assessee was considered and the Deputy Commissioner held that the return had been filed without a proper and correct manufacturing account, trading account, profit and loss account and balance-sheet and, therefore, the requirements of Clauses (bb) and (d) of the Explanation to Section 139(9) of the INcome-tax Act were not complied with. The officer also observed that even if the assessee had certain reasons, due to which these documents could not be filed, those reasons would not convert an invalid return into a valid return as there was no provision in the Section whereby the requirement could be waived if certain circumstances existed.
(2.)LEARNED counsel for the petitioner contends that there was a circular issued by the Central Board of Direct Taxes relating to defective returns. The circular of the Board was in Board's Instruction No. 1348 dated August 30, 1980. Paragraph 5 of the said instructions reads as follows :
"Section 139(9) envisages the issue of a deficiency letter if it is considered that a return of income is defective. The Explanation lists the defects. The first defect mentioned is that the enclosures, statements and columns in the return of income relating to computation of income chargeable under each head of income, computation of gross total income and total income have not been duly filled in. A return of income shall not be considered as defective under this clause merely because the inapplicable columns have not been filled up or against applicable columns the assessee has indicated that information as per statement is attached and the attached statement gives the relevant information. Again, clause (e) of the Explanation requires that where the accounts of the assessee have been audited, the return should be accompanied by copies of the audited profit and loss account, balance-sheet and the auditor's report. The omission to enclose copies of the audited profit and loss account, balance-sheet and the auditor's report should be treated as a defect in all cases, requiring statutory audit. If the return indicates that the audit has not been completed and hence audited accounts and auditor's report could not be enclosed, the return should not be treated as defective."

It is contended by learned counsel that as per the instructions given by the Board, the non-compliance with the conditions mentioned in Clauses (a) and (e) of the Explanation to Section 139(9) would not invalidate the return. This contention cannot be accepted for two reasons. One, the Board's instructions cannot prevail over the statute. When the Legislature has introduced a provision in the statute, it is not for the Board to instruct the officer not to comply with the requirement of the statute in the guise of giving instructions to them. The interpretation given by the Board to the provisions of the section does not appear to be correct and in any event the court is not bound by such interpretation. Secondly, the clauses mentioned in the Board's instructions are only (a) and (e) to the Explanation to Section 139(9). They do not refer to Clauses (bb) and (d) of the said Explanation. In such circumstances, the Board's instructions are not applicable in the present case.

It is next contended that Clause (bb) to the Explanation to Section 139(9) was introduced only with effect from April 1, 1989, by the Finance Act, 1988. That is applicable with reference to the assessment years covered by C. W. Ps. Nos. 591 of 1992 to 593 of 1992. In so far as C. W. P. No. 590 of 1992 is concerned, the defects pointed out are non-compliance with not only Clause (bb) to the Explanation but also Clause (d) to the Explanation. The former clause was not applicable in the concerned assessment year. But the latter clause will apply.

(3.)IN such circumstances, the order passed by the Deputy Commissioner of INcome-tax, is unassailable. Hence, these writ petitions fail and are dismissed.
Interim orders are vacated.

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