D.K.Seth, J. - (1.) This appeal was admitted on the following two grounds : "I. Whether, when a second revised return was filed under Section 139(5) of the Act within the specified period of one year from the end of the relevant assessment order (year), the AO is obliged to adjust the demand made under Section 143(1)(a) raised on the basis of the earlier returns and whether the Tribunal is justified in law in deciding the case without considering the legal position ? II. Whether, in view of the fact that the petitioner had filed a revised return on 7th Jan., 1991 claiming a loss of Rs. 2,49,05,044 and carry forward the loss of unabsorbed depreciation of Rs. 6,26,26,557 the Tribunal without deciding the question as to whether there was any reduction of loss consequent upon the filing of the second revised return on 7th Jan., 1991 could send the matter back when there was no dispute regarding the carry forward unabsorbed depreciation of a sum of Rs. 6,26,26,557 ?"
(2.) In order to answer these two questions, it would be relevant to narrate the facts in brief. (1) Return under Section 139(1) of the IT Act, 1961 covering a period of 21 months from 1st July, 1987 to 31st March, 1989 was submitted by the assessee on 29th Dec., 1989, i.e., within the time stipulated under Section 139(1). A revised return (first revised return) was filed on 30th March, 1990. On 19th Sept., 1990 the AO issued an intimation under Section 143(1)(a) accepting the revised return and reducing the amount of loss as claimed while levying additional tax under Section 143(1)(a). The petitioner applied for rectification of the said order dt. 19th Sept., 1990 under Section 154 on 20th Oct., 1990 claiming carry forward of earlier years' loss and unabsorbed depreciation. By an order dt. 31st Dec., 1990, this application for rectification was rejected on the ground that neither in the original return nor in the revised return any claim for carry forward of earlier years' loss or depreciation was made. Admittedly, it was so. On 7th Jan., 1991, a revised return (second revised return), claiming carry forward of earlier years' loss and unabsorbed depreciation, was filed. This was not considered and assessment was made. The matter travelled in between the appeals and upto this Court and ultimately the present order under appeal was passed rejecting the claim of the assessee for carrying forward the earlier years' loss and unabsorbed depreciation. (2) The learned Tribunal in its order dt. 22nd April, 1999 had remanded the case only on the' question whether the claim in the revised return at the enhanced figure was a wrong claim by deprecating the process of finding out depreciation for 21 months on pro rata basis or not. On the other hand, it had held that the issue of loss after adjustment stands covered against the assessee by reason of the discussion made in the order pointing out to the retrospective amendment of Section 143(3).
(3.) The order of the learned Tribunal was sought to be supported by Mr. Moitra on two-fold grounds--first, according to him, the return comprising of 21 months cannot be treated to be a valid return and as such there was no return in the eye of law. In order to substantiate this question, he referred to the definition of 'previous year' defined in Section 2(34) to mean the previous year as defined in Section 3. Referring to Section 3, he points out that the previous year means the financial year immediately preceding the assessment year, which comprises of the period from 1st April, 1988 till 31st March, 1989. Since the return comprised of the period anterior to 1st April, 1988, this return is not a return at all. The second ground he has taken is that no revised return could be filed under Section 139(5) in view of the decision in Kumai Jagadish Chandra Sinha (Dead) through LRs etc. v. CIT wherein the apex Court had held that in such a case no revised return could be filed. 1. Before we proceed to discuss the contention raised by Dr. Pal, we may deal with the preliminary objections raised by Mr. Moitra. So far as the first question is concerned, it appears that section defining 'previous year' was substituted by the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 1st April, 1988 prior to its substitution by the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 1st April, 1989. In the present case, as contended by Dr, Pal, the assessee was following a different accounting year other than 1st April and 31st March following. Therefore, in view of the provisions contained in Section 3 as amended by the 1987 Amendment effective from 1st April, 1988, the fraction of the period from 1st July 1987 till 31st March, 1988 was included in the return for the period ending 31st March, 1989. By reason of the substitution of the definition of 'previous year' through the 1987 Amendment effective from 1st April, 1988, the period following is to be dealt with as the transitional period as contemplated under Section 3, Sub-section (2) read with the Tenth Schedule Therefore, the first contention of Mr. Moitra cannot be sustained. 2. That apart, it is also to be noted that this return was never treated to be a void return by either the AO or the appellate authority or the Tribunal. Neither this point was ever raised. In any event, having regard to the facts and circumstances of the case, we do not think that this preliminary objection can be sustained and is accordingly overruled. 3. So far as the second question that has been raised by Mr. Moitra is concerned, the decision in Kumai Jagadish Chandra Sinha (supra) is distinguishable on facts as rightly pointed out by, Dr. Pal. In fact, in that case the return was filed after the period had expired under Sub-section (4) of Section 139. In such a situation a revised return was sought to be filed under Sub-section (5), which was held by the apex Court that could not be done. Whereas in the present case, the original return was filed within the time limited under Section 139(1) and the revised returns were filed within the period prescribed under Sub-section (5) of Section 139. Therefore, this contention raised by Mr. Moitra does not seem to be of any consequence and this objection is also overruled.;