G.T.NANAVATI - (1.) THESE four appeals arise out of the judgment delivered by the Punjab and Haryana High Court in I. T. References Nos. 17,44 and 45 of 1974. A common question which arises for consideration in these appeals is whether an application made under Section 139(2) of the Income-tax Act for extension of time for filing of the return of income, after the expiry of the stipulated period could be regarded as legal and valid.
(2.) THE respondent in Civil Appeal No. 2636 of 1977 is a partnership firm and the respondents in Civil Appeals Nos. 2499-2501 of 1977 are its partners. In respect of the assessment year 1966-67 individual notices under S. 139(2) were issued to the firm and its three partners requiring them to furnish returns of their income within 30 days from the date of service of the notice. THE notice was served upon the firm on 18-5-1966 and the partners were served on 24-6-1966. THErefore, the return was required to be filed by the firm on or before 19-6-1966 and the partners had to file their returns on or before 24-7-1966. All of them submitted their returns on 27-6-1967. At the time of completing the assessments the I.T.O. initiated proceedings under S.271(1)(a) for levying penalty as there was delay in filing the returns without reasonable cause. In those proceedings the assessees pointed out that they had made applications to the I.T.O. on 29-6-1966 and 31-12-1966 for extending the time up to 31-12-1966 and 31-3-1967 respectively and contended that no penalty should be imposed upon them as they reasonably believed that those applications were granted since they were not rejected by the I.T.O. The I.T.O. did not accept this contention as in his view no authentic evidence was produced by the assessees in that behalf and also because such applications had to be made before the expiry of the due date for the filing of the returns. He, therefore, passed orders levying penalty upon them. The assessee went in appeal to the Appellate Assistant Commissioner. He recorded a finding that applications dated 29-6-1966 and 31-12-1966 were made by the assessee and that the firm had made one more application dated 15-5-1967 for extension of time up to 30-6-1967. He accepted the contention of the assessees that they had reasonably presumed that their applications were granted as they were not rejected and thus there was reasonable cause for the delay in filing the returns, till the last date up to which extension was sought for. He, therefore, cancelled the penalty imposed upon the firm and restricted the penalty imposed upon the partners to the period for which no reasonable cause was shown. The Revenue preferred appeals against those orders to the Tribunal. It held that belated applications cannot be regarded as legal and valid, allowed the appeals and restored the orders passed by the I.T.O. At the instance of the assessee the Tribunal made the references to the High Court. Main judgment was delivered by the High Court in I. T. Reference No. 17 of 1974. The High Court held that as the proviso to S.139(2) does not contain any limitation to the effect that an application for extension should be filed within the stipulated time, an application for extension of time can be made even after the expiry of that period. The form prescribed for making an application for extension of time also indicates that an application for that purpose can be filed even after the expiry of the due date. It, therefore, decided the question in favour of the assessees. What is contended by the learned counsel for the Revenue is that the High Court has not interpreted the proviso to S. 139(2) correctly. It is submitted that the Income-tax Act is a complete Code by itself and in the absence of a specific provision in the Act or the rules made thereunder, it should have been held that making an application for extension of time is not permissible after the expiry of the period either specified originally or extended by the I.T.O. for the filing of the return; and, therefore, the belated applications filed by the assessees were invalid.
(3.) SECTION 139(2), which was deleted with effect from 1-4-1989, at the relevant time read as under:- "(2) In the case of any person who, in the Income-tax Officer's opinion, is assessable under this Act, whether on his own total income or on the total income of any other person during the previous year, the Income-tax Officer may, before the end of the relevant assessment year, serve a notice upon him requiring him to furnish, within thirty days from the date of service of the notice, a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed: Provided that on an application made in the prescribed manner the Income-tax Officer may, in his discretion, extend the date for the furnishing of the return, and when the date for furnishing the return, whether fixed originally or on extension, falls beyond the 30th day of September or as the case may be, the 31st day of December of the assessment year, the provisions of sub-clause (iii) of the proviso to sub-section (1) shall apply." It provided for the manner in which a person, who, in the opinion of the I. T. O., was assessable could be directed to furnish a return of his income and the manner in which he had to file the return. A notice was required to be given to such person and he had to file the return within thirty days from the date of service of the notice. The period so fixed could be extended by the I. T. O., if an application for that purpose was made in the prescribed manner. The proviso enabled the I. T. O. to extend the date for furnishing the return and laid down the procedure for moving the I. T. O. for that purpose. The manner of making such an application was prescribed by R.13. The form prescribed was Form No. 6 It reads as under: JUDGEMENT_182_4_1995Image1.jpg ;