ORDER
1. The ground in this revenues appeal is in the following terms :
“On the facts and in the circumstances of the case, the AAC has erred in allowing the benefit of section 11 of the Income-tax Act, 1961, even though there was a clear-cut default of section 12A (b) of the Act, as the assessed failed to file the audit report under section 12A (b) and had no right under section 139(5) to revise the return as the original return was not in time and in view of the Delhi High Court judgment in O. P. Malhotra v. CIT [1981] 129 ITR 379.”
The assessment year involved is 1983-84 and the order brought in appeal is of 18-2-1986 passed by the AAC, Range T, New Delhi, for which the assessment was made on 20-11-1985 under section 143(3) of the Income-tax Act, 1961 (the Act).
2. A return was filed on 7-9-1983 without audited accounts. Since the assessed was a trust case he was given an opportunity to explain as to why benefits of section 11 be not denied in view of the provisions of section 12A (b) of the Act. The assessed thereafter furnished another return on 3-10-1985 and also filed audited balance sheet and related accounts showing the date of audit as 27-6-1984. The assessed referred to the judgment of the Honble Allahabad High Court in the case of CIT v. Sri Baldeoji Maharaj Trust [1983] 142 ITR 584, in which it has been held that a return filed under section 139(4) of the Act in deemed to have been filed under section 139(1) and all benefits of section 11 are to be allowable. The ITO by referring to the Delhi high Court judgment in the case of O. P. Malhotra v. CIT [1981] 129 ITR 379, held that the assessed had no right to revise its return and as such benefits of section 11 were not available. The result was denial of exemption under section 11.
3. The AAC reversed the ITOs order and allowed the appeal directing benefits under section 11 and his short order reads as follows :
“The ITO held in his order that there was violation of section 12A (b) of the Income-tax Act. At the time of hearing it was contended that the appellant had filed audited balance sheet and I & E account. His action on this point was not justified in view of the ruling in the case of CIT v. Shri Baldeoji Maharaj Trust [1983] 142 ITR 584 (All.), dated May 13, 1982, the ITO is directed to treat the revised return as valid for the purposes of assessment. In view of the ruling in the case of Harmanjit Trust v. CIT [1984] 148 ITR 214 (Punj. & Har.) he is directed to allow the appellant the benefit of section 11 of the Income-tax Act, as Form No. 10B was filed before the completion of the date of the assessed.
In the result, the appeal is allowed.”
4. For the revenue Shri R. S. Adlakha submitted that the date of the assesseds return being 7-9-1983 and since admittedly there was no audited balance sheet attached with such return, as required under section 12A (b), the respondent was rightly denied exemption under section 11. With regard to the revised return filed. He argued that the first returns having been filed beyond the time allowed under section 139(1) and there being no notice under section 139(2), it had to be treated under section 139(4) and a return filed under such provision could not be revised under section 139(5) and, therefore, the assesseds action of filing an audited balance sheet along with return on 3-10-1985 could not save it from the mischief of denial of exemption.
5. For the respondent Shri M. S. Syali firstly submitted that return of a charitable trust is always under section 139(4A) as per amendment of the said section by the Finance Act, 1972 with effect from 1-4-1973 and such return is to be treated as under section 139(1). The learned advocates argument can be well-projected by noticing the said sub-section (4A) as under :
“(4A) Every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes, or of income being voluntary contributions referred to in sub-clause (iia) of clause (24) of section 2, shall, if the total income in respect of which he is assessable as a representative assesee (the total income for this purpose being computed under this Act without giving effect to the provisions of sections 11 and 12) exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed manner and setting for the such other particulars as may be prescribed and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).”
Therefore, Shri Syali pleaded that the assessing officer was completely wrong in denying the claim on the ground that the return filed on 7-9-1983 could not be revised.
6. I am impressed with the argument of the learned advocate with regard to the provision of section 139(4A) and the built in deeming feature that the return filed by a trust under sub-section (4A) is to be treated for all purposes under the Act a return filed under section 139(1), which certainly could be revised and since the audited balance sheet was submitted with the revised return, the infirmity, if any, got cured and the assessed was entitled to exemption under section 11.
7. Independent of the above, there was no merit in the ITOs objection that since the audit report in Form No. 10-B was not enclosed with the return on 7-9-1983, the assessed was out of the Court as far as the exemption claim was concerned. According to me, it is not the requirement of law that such audit report should be attached to the return and it would be sufficient compliance of the law if the same is submitted before the ITO during the hearing and before completion of the assessment. In this case, the assessment proceedings were commenced only after the second return was filed and, therefore, right at the initiation of proceedings the report was in the hands of the ITO. For such view, I draw support from the Tribunal order in the case of ITO v. Shahaji Chhatrapati General Charitable Trust [1986] 15 ITD 556 (Pune.)
8. Thirdly, and again independent of the above, the Delhi High Court judgment in O. P. Malhotras case (supra) comes to the assesseds rescue, inasmuch as it has been observed that if a return filed under section 139(4) can be quoted with a return under section 139(1) or section 139(2), as is the case in the present appeal, it can be revised under section 139(5) and further, that there may be more than one return filed under section 139(4). In this context, I would like to notice the following portion, which is as follows :
“… Taking first the language of the provision, it is seen that section 139(5) in terms allows an assessed to revise only a return which has been furnished under sub-section (1) or sub-section (2). It carefully avoids a reference to section 139(4) which, it seems to us, in significant considering that the purpose of the legislature is to permit the assessed to revise a return which he has already filed and the Legislature has just outlined in sub-section (4) one of the circumstances, in addition to those set out in sub-sections (1) and (2) in which the assessed could have filed a return. The reference to section 271(1) (a) does not help because that section deals with the delay in the filing of the return beyond the period contemplated by section 139(1) or (2) and there can be no question of a delay under section 139(4). Section 139(3) (which permits the filing of a return of loss) and section 139(4A) (introduced subsequently) specifically provide that the returns filed under those sub-sections would attract all the provisions of the Act as if they were returns filed under sub-section (1) while sub-section (4) does not use any such language. It is, therefore, difficult to accept the argument that section 139(5) entitle an assessed to rectify or revise a return filed by him under sub-section (4) unless the return so filed can be fully equated to a return under sub-section (1) or sub-section (2).
In principle also, we do not find any incongruity in the above construction. It will not create any hardship, injustice or illogicality as suggested Shri Verma. Sub-section (5) was intended to provide a locus penitentiate to assesseds, who had filed their returns of income in compliance with the requirements of sub-sections (1), (2) and (3) and within the time allowed there under to revise the same when they discovered an omission or wrong statement therein. But where a person has not filed such a return and is availing himself of the provisions of sub-section (4) which enable him to file a return after a delay which might extend up to four year, it could well be that the Legislature thought that no such opportunity of revision was needed to be provided for. In this context, it should be remembered that such an assessed can within the period of four years provided for in section 139(4) (which has been reduced subsequently to two years conformably to amendments in section 153 reducing the time limit for completion of assessments) file as many returns as he wants. In view of this also, there was no necessity to provide a further opportunity to such an assessed to revise a return filed already after considerable delay by taking advantage of the fact that the assessment has not been completed by them. On this considerations, we are not impressed by the argument of Shri Verma that it would not be logical to hold that a person who has originally filed a return could revise it as many times as he likes before the assessment is made but that such an opportunity would not be available to a person who files his first return only under section 139(4).” (p. 385)
9. Therefore, whatever may be the reasons recorded by the learned AAC, his decision in directing exemption under section 11 is held to be justified on three separate counts, independent of each other summarised as follows :
1. Since the trust return was to be taken as under section 139(4A), by the statutory built in safeguards in the said sub-section the return was to be treated for all purposes as under section 139(1) and, therefore, could be revised and since the audit report was admittedly filed with the second returns, there was no default under section 12A (b), as held by the ITO;
2. There was no requirement that the audited balance sheet must be appended to the return and it would have been sufficient compliance of the audit report was filed before the completion of assessment, whereas in this case, it was submitted even before the assessment proceedings were initiated; and
3. That the Honble Delhi High Court in O. P. Malhotras case (supra) has in terms stated that a return under section 139(4A) can be revised and since the audit report was appended with the return of 10-10-1985 the requirement of section 12A (b) stood completed.
10. In the result, the appeal is dismissed.