COMMISSIONER OF INCOME TAX Vs. HIMGIRI FOODS LTD.

JUDGEMENT

(1.) In this appeal under Section 260A of the Income Tax Act, 1961 (the Act), appellant-Revenue has proposed the following question stated to be a substantial question of law arising from the impugned order of Tribunal dated 25-1-2007 of the Tribunal:

(2.) The assessment year is 1995-96. The respondent-assessee had filed its original return of income for the assessment year under consideration on 30-11-1995 disclosing total income of Rs. 21,46,600. The said return was filed in time and was processed under Section 143(1)(a) of the Act. Within a period of one year from the relevant assessment year, the assessee on the basis of the opinion of the chartered accountant and tax expert, filed a revised return on 21-1-1997, declaring business loss of Rs. 12,08,686. The revised return was occasioned because certain expenses which were of revenue nature remained to be claimed in the original return as they were debited to pre-operative expenses. The assessing officer did not process the revised return under Section 143(113) of the Act and intimated the assessee that he was not acting upon the revised return as assessment under Section 143(1)(a) was already completed. In the meantime, the assessee moved an application under Section 119 of the Act before the CIT, Gujarat-1, Ahmedabad on 27-12-1999, requesting for issuance of directions to the assessing officer to consider the revised return filed under Section 139(5) of the Act. The said application came to be rejected by CIT who also held that the claim of the assessee was devoid of any merit and that, Section 139(5) was not intended to provide a loophole for reducing the tax liability by extra legal means. The assessee, thereafter moved an application dated 30-3-2000 under Section 154 of the Act before the assessing officer requesting him to take cognizance of the revised return under the provisions of Section 143(1B) of the Act. The assessing officer rejected the said application holding that the revised return had been filed beyond the time-limit stipulated under Section 139(5) of the Act. While rejecting the said application the assessing officer also placed reliance upon the order passed by CIT under Section 119 of the Act.

(3.) The assessee carried the matter in appeal before Commissioner (Appeals) who recorded a finding that the revised return was filed on 21-1-1997, but rejected the application on other grounds. The assessee carried the matter in further appeal before Tribunal, who, vide the impugned order dated 25-1-2007 allowed the appeal.