This case, M/s. Shriram Investments v. The Commissioner of Income Tax III, Chennai (2024 INSC 760), involves a tax dispute that reached the Supreme Court of India. The primary issue revolves around the appellant, Shriram Investments, and their filing of revised income tax returns, which were submitted after the deadline prescribed by the Income Tax Act, 1961.
Key Events:
1. Initial Returns: Shriram Investments filed its initial return for the assessment year 1989-90 on November 19, 1989. It later submitted a revised return on October 31, 1990.
2. Subsequent Revised Returns: Another revised return was filed by the appellant on October 29, 1991. However, the assessing officer did not take this into account, prompting the appellant to appeal to the Commissioner of Income Tax (CIT), Appeals.
3. Appeal Dismissed: The CIT (Appeals) dismissed the appeal, noting that the revised return was barred by the limitation period set under Section 139(5) of the Income Tax Act, which stipulates the timeline for filing revised returns.
4. Tribunal’s Ruling: Shriram Investments then approached the Income Tax Appellate Tribunal, which partly allowed the appeal and directed the assessing officer to consider the appellant’s claim regarding the deduction of deferred revenue expenditure.
5. High Court’s Decision: The Income Tax Department challenged this ruling in the Madras High Court. The High Court overturned the Tribunal’s order, stating that once the revised return is barred by time, the claim cannot be considered by the assessing officer.
Arguments:
• Appellant’s Argument: Shriram Investments contended that even though the revised return was late, the claim for deduction could still be entertained during assessment proceedings. They referenced the case Wipro Finance Ltd. v. Commissioner of Income Tax, which dealt with similar issues.
• Respondent’s Argument: The Commissioner of Income Tax, represented by the ASG, cited other Supreme Court judgments, such as Goetze (India) Ltd. v. Commissioner of Income Tax and Principal Commissioner of Income Tax v. Wipro Ltd., to argue that once a revised return is time-barred, the claim made in it cannot be entertained.
Supreme Court’s Consideration:
The Supreme Court analyzed the previous rulings cited by both sides. The key ruling in the Wipro Finance Ltd. case emphasized the appellate power of the Tribunal but did not address whether an assessing officer can entertain a time-barred claim. On the other hand, the Goetze case firmly established that an assessing officer cannot consider a claim made in a revised return if it is filed after the statutory deadline.
Conclusion:
The Supreme Court upheld the High Court’s decision, affirming that since the revised return was filed after the period prescribed under Section 139(5), the assessing officer had no jurisdiction to entertain the appellant’s claim. The appeal was dismissed.