Holding

Applications for extension of time under Section 139(2) filed after the expiry of the prescribed period are maintainable and therefore valid.

Summary

The Commissioner of Income Tax, Jullundur issued notices under Section 139(2) of the Income Tax Act, 1961 to Ajanta Electricals and its partners, requiring them to file returns within 30 days. The assessees filed their returns and applications for extension of time after the due dates, leading the Income Tax Officer to levy penalties. The Appellate Assistant Commissioner cancelled the penalty on the firm but upheld it on the partners; the Tribunal restored the penalties, and the High Court held that belated applications for extension were permissible. On appeal, the Supreme Court examined whether Section 139(2) and its proviso restrict applications to be made only before the expiry of the prescribed period and whether the Income Tax Officer must consider such applications. Reading Section 139(2) together with Rule 13 and Form No. 6, the Court found no limitation on the timing of applications and emphasized the discretionary nature of the provision. Consequently, the Court held that applications filed after the expiry of the original or extended period are maintainable and valid, and dismissed the Revenue's appeals.

Issues considered

Whether an application for extension of time under Section 139(2) of the Income Tax Act can be filed after the expiry of the original or previously extended period.
Whether the word 'extend' in the proviso to Section 139(2) limits the timing of such applications.
Whether the Income Tax Officer is obligated to consider and pass an order on belated applications.
Whether the absence of a specific provision in the Act or Rules precludes filing of applications after the due date.
Whether principles of procedural law, such as those in the Code of Civil Procedure, may be invoked to interpret the provision.

Legislation cited

Code of Civil Procedure, 1908s. 148
Income Tax Act, 1961s. 139(2), s. 271(1)(a), s. 276
Income Tax Rules, 1962s. Rule 13

Subjects

Income TaxSection 139(2)extension of timetax return filingpenaltyprocedural interpretationdiscretionary powertax assessment

Judgment

r
COMMISSIONER OF INCOME TAX, JULLUNDUR A
v.
AJANTA ELECTRICALS, PUNJAB

MAY 2, 1995

[B.P. JEEVAN REDDY AND G.T. NANA VAT!, JJ.) B

Income Tax Act, 1961:

--' Sectio11 139(2)--Proviso (As it stood prior to its deletion on 1.4. I989 )--
Object and inte1pretatio11 of-Income Tax Retum-Extension of time for C
filin15Applicatio11 filed after expily of stipulated period-Held pem1issible.

Income Tax Act-Procedural provisiol!S-!nterpretatio11 of-Principle
of procedure evolved for doing justice can be applied-Code of Civil Proce-
dure, 1908.

Words a11d Phrases : 'Extend'-Meaning of-Section 139(2)-- D
Proviso-Income Tax Act, 1961. . ·

The respondents, a partnership firm and its partners, were issued
notices under Section 139(2) of the Income Tax Act, 1961 requiring them
to me their retnrns within 30 days from the date of issue of notice. E
However, all of them filed their returns as well as applications for exten-
sion of time for filing the return after the expiry of the dne date. As there
was delay in filing the returns the Income Tax Officer levied penalty upon
them. On appeal the Appellate Assistant Commissioner cancelled the
penalty imposed upon the firm but upheld the penalty imposed upon the
partners. The Tribunal allowed the revenue appeals and restored the F
orders passed by the Income Tax Officer. The High Court decided the
reference iu favour of the assessee by holding that an application for
extension of time for filing the return can be filed even after the expiry of
the due date.
G
In Revenue's appeal to this Court it was contended that in the
absence of a specific provision in the Act or Rules made thereunder the
High Court should have held that the filing of applications for extension
of time after the expiry of the stipulated period was not permissible.

Dismissing the appeals, this Court H
1083
1084 SUPREME COURT REPORTS [1995] 3 S.C.R.

A HELD : 1. The applications made by the assessees under Sec-
tion139(2) of the Income Tax Act, 1961 for extension of time after the expiry Y'
of the time allowed were maintainable and, therefore, valid. [1092-G]

2. If Section 139(2) is read along with Rule 13 and Form No. 6 it
becomes clear that an application for extension could be made even after
B the period allowed originally or as a result of extension granted had
expired. Keeping in mind the object of the Proviso to Section 139(2) giving
discretion .to the Income Tax Officer and the consequences that were to
follow from not flling the return with in time, there is no justification for '
"-··
reading into the section any limitation to the effect that no application
C could be made after the time allowed had expired. There is no good reason
to construe the section so narrowly. If it was intended that the application
for extension of time under Section 139(2) was to be made within the time
allowed originally or within the extended time the words "it ha• not been
possible" were not at all necessary and the words "it is not possible" would
have been sufficient. (1089-C, Al
D
3. For various reasons the Legislature may not make provisions in
detailes in matters of procedure to be followed. It may rest with conferring
discretionary power upon the Court or the authority and leave it to the
Court or that authority to exercise that power in its discretion as deemed
E proper and just depending upon the facts and circumstances of each case.
Whether a particular thing could be done or not in absence of a specific
provision to that effect would depend upon the object of that provision and
other relevant factors like the consequences which may follow if it is held
that it cannot be done. From mere absence of a specific provision authoris-
ing the ITO to entertain an application made beyond time it was not proper
F to hold that it was not open to the assessee to make an application under
Section 139(2) for extension of time after the time allowed had expired and
that such an application could not be entertained by the ITO. [1091-C-D)

Sunderdas Thackersay & Ors. v. C./. T., 137 ITR 646, approved.
G T., Venkata Krishnaiah and Co. v.• C./. T., ITR 297; C./. T. v. S.P. Viz
Construction Co., 165 I.T .R. 732 and Assam Frontier Veneer and Saw Mills
v. C./. T., 104 l.T.R. 479, disapproved.

4. Revenue's contention that the word 'extend' in the proviso to
H Section 139(2) implies that at the time of making the application the time

•
C.l.T. v. AIANTAELEcrRICALS [NANAVATI,J.] 1085

allowed should not have expired cannot be accepted. Though the Civlt A
Procedure Code by itself does not apply to the proceedings under the
Income Tax Act, there is no reason why a principle of procedure evolved
for doing justice to a P'!rty to the proceedings cannot be called in aid to
while interpreting a procedural provision contained in the Act. (1089-D-E)

Mahanth Ram Das v. Ganga Das, A.l.R. (1961) SC 882, relied_ op. B.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2636 of
.. J 1977 Etc.

From the Judgment and Order dated 27.10.76 of the Punjab &
Haryana High Court in I.T.P. No. 19 of 1976. C

J. Ramamurthy, S. Pajappa and Ms. A.Subhashini for the Appellant.

The Judgment of the Court was delivered by

NANAVATI, J. These four appeals arise out of the judgment D
delivered by the Punjab and Haryana High Court in I.T. Reference Nos.
f·
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 E
valid.

The respondent in Civil Appeal No. 2636 of 1m is a partnership
firm and the respondents in Civil Appeal Nos. 2499-2501 of 1977 are its
>,-' partners. In respect of the assessment year 1966-67 individual notices under
section 139{2) were issued to the firm and its three partners requiring them F
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 wa& 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 G
~ 27.6.1967:

At the time of completing -the assessments the I.T.O. initiated ·
proceedings under Section 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 l.T.O. on H
1086 SUPREME COURT REPORTS [1995] 3 S.C.R.

A 29.6.1966 and 31.12.1966 for extending the time upto 31.12.1966 and
31.3.1967 respectively and contended that no penalty sh~uld 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
B before the expiry of the due date for the filing of the returns. He, therefore,
pass orders levying penalty upon them. The assessees went in appeal to the
Appellate Assistant Commissioner. He recorded a finding that applications
dated 29.6.1966 'and 31.12.1866 were made by the assessees and that the
firm had made one more application dated 15.5.1967 for extension of time
C upto 30.6.1967. He accepted the contention of the assessees that ·they had
reasonably presumed that their application were granted as they were not
rejected and thus there was reasonable cause for the delay in filing the
returns, till the last date upto which extension was sought for. He, there-
fore, cancelled the penalty imposed upon the firm and restricted the
D 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 l.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.
E Reference No. 17 of 1974. The High Court held that as the proviso to
Section 139(2) does not contain any limitation to the effect that an applica-
tion for extension should be filed with in 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
F 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 Section 139(2) correctly.
G 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 exten-
sion 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,
H therefore, the belated applications filed by the assessees were invalid.
C.l.T. v. AJANTAELECTRICALS [NANAVATI,J.] 1087

• "!' Section 139(2), which was deleted with effect from 1.4.1989, at die A
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 B
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 from and verified in the
prescribed manner and setting forth such other particulars as may C
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 D
.. 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 E
the l.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 s1,1ch 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., ff an application for that purpose was made in F
the prescribed manner. The proviso enabled the I.T.0. to extend the date
for furnishing the return and laid down the procedure for moving the l.T.O.
for that purpose. The manner of making such an application was prescribed
by Rule 13. The form prescribed was Form No. 6. It reads as under :

"From No. 6 : Under Section 139(1)/(2)/(3) of the Income-tax Act, G
1961 -

I/We have to file the return of my/our income in income of ........ in
respect of which I/we are assessable for the assessment year commencing
on 1st April, 19 ; before 19 . For the reasons given below, it is not H
1088 SUPREME COURT REP OR TS [1995] 3 S.C.R.

A possible/has not been possible for me/us to file the return before the saic!
date. 11

We are also referring to this prescribed form because the High Court
after referring to it, has observed that "the prescribed form clearly shows
that the application for exter,ision of time may be filed even after the expiry
B of the period prescribed for filing the return." The Calcutta High Court in
Sunderdas Thackersay & Bros. v. C.I. T., 137 !TR 646 has also taken the
same view.

Even the I. T.O. extended the date, if it fell beyond the dates men-
C tioned in the proviso, the provision of sub-clause (iii) of the proviso to
sub-section (1) became applicable and interest at the rate of 6 per cent
became payable as stipulated in that provision. The object of the provision
was to see that the assessee did not gain in any way by postponement of
furnishing the return with the hope that he could postpone payment of tax
D to a later date and have the advantage of utilising that amount during that
period, as he was made to pay interest on the amount of tax found payable.
At the same time, it was provided in sub-section (8) that the l.T.O. could
in prescribed cases and under prescribed circumstances, reduce or waive
the interest payable. Moreover, a person who failed to furnish the return
within time allowed under Section 139(2) was at the relevant time not only
E liable to pay interest but also penalty under Section 271 and fine under
Section 276.

In this context, the question whether a belated application could be
regarded as valid or not has to be considered. As rightly pointed out by
p the Punjab and Haryana High Court while deciding these cases under
256(2) and by the Calcutta High Court in Sunderdas Thackersay & Bros.
(supra), there are no words of limitation in Section 139(2) to the effect that
no application could be filed after the period allowed had expired. As we
have stated earlier, it was a procedural provision. The limit of thirty days
was not intended to be fmal as discretion was given to the l.T.O. to extend
G that date. The l.T.O. could have been called upon to exercise that discre-
tion for proper reasons. No fetters were placed upon the discretion of the
I.T.O. as regards the number of times he could extend the date of the
period for which he could extend it. It is conceded that repeated applica-
tions could be made within the time allowed, in view of the clear indication
H to that effect in Form No. 6, by the use of words "it has not been possible".
C.I.T. v. ATANTAELECIRICALS [NANAVATI,J.] 1089

If it was intended that the application for extension of time under Section A
139{2) was to be made within the time allowed originally or within the
'4r extended time then the words "it has not been possible" were not at all
necessary and the words "it ·is not possible" would have been sufficient.
Though the rule cannot affect, control or derogate from the .section of the
Act, so long as it does not have that effect, it has to be regarded as having
the same force as the section of the Act. If Section 139(2) is read alongwith
B
Rule 13 and Form No. 6 it becomes clear that an application for extension
could be made even after the period allowed originally or as a result of
extension granted had expired. Keeping in mind the object of giving
discretion to the l.T.O. and the consequences that were to follow from not
filing the return within time, we see no justification for reading into the c
section any limitation to the effect that no application could be made after
the time allowed had expired. We see no good reason to oonstrue the
section so narrowly.

We cannot accept the··conteiition raised on behalf of the Revenue
D
that the word 'extend' in the proviso !~·Section 139(2) implies that at the
time of making the application the time allowed should not have expired .
• j. Though the Civil Procedure Code by itself does not supply to the proceed-
ings under the Income Tax Act, was see no reason why a principle of
procedure evolved for doing justice to a party to the proceeding cannot be
called in aid to while interpreting a procedural provision contained in the E
Act. Section 148 of the Code provides that where any period is fixed or
granted by the Court for the doing of any act prescribed or allowed by the
Code, the Court may, in its discretion, from time to time, enlarge such
period, even though the period originally fixed or granted may have. ex-
.,.< pired. Various situations can be envisaged where a party to the proceeding
>
F
is prevented by circumstances beyond his control from doing the required
act within the fixed period. The assessee may be able to point out that
because of a sudden death in the family or because of his sudden illness
of a serious nature or because he had to leave for an outside place all of
a sudden or because he could not return from outside ill spite of his best
• efforts, or for other goods reasons, as the case may be, he was not able to G
file the return within time. This Court while dealing with the power of the
Court under Section 148 observed as under in the case of Mahanth Ram
Das v. Gana Das, AIR {1961) SC 982:

"The procedural orders though peremptory (conditional decrees H
1090 SUPREME COURT REPORTS (1995) 3 S.C.R.

A apart) are, in essence, in tmorem, so that dilatory litigants might
put themselves in order and avoid delay. They do not, however,
completely estop a Court from taking note of events and cir- 1"'·
cumstances which happen within the time fixed."

This Court further observed that Section 148 clothes the Court with
B ample power to do justice to a litigant if sufficient cause is made out for
extension and that an order extending time for payment, though passed
after the expiry of the time fixed, could. operate from the date on which
the time fixed expired.

C The learned counsel for the Revenue strongly relied upon the
decision of the Andhra Pradesh High Court in T. Venkata Krishnaiah and
Co. v. C./. T., 93 !TR 297 wherein it has been held that it is not open to
the assessee to file an application beyond the period within which he was
required to file his return as per the notice under Section 139 and sub-
mitted that it deserved to be accepted as laying down the correct law on
D the point. In that case one of the questions which was referred to the High
Court for its opinion was whether the Income Tax Officer should be
deemed to have granted extension of time for filing the return when he did
not pass any orders on the assessee's belated application? The High Court
held:
E 'There is no provision in the Act or the rules made .thereunder
which requires the Income-tax officer to pass an order on an
application filed by an assessee subsequent to the time given to
him for filing his return pursuant to a notice under sub-section (2)
to Section 139..... We may add that there is no scope for presuming
F or assuming that an application filed by an assessee for extension
of time must have been granted in its favour when no order has
been passed on its application by the Income-tax Officer. There is
no scope for such a presumption or deeming provision in a taxing
statute. The Income-tax Act is a self-contained code. The
provisions of the Act and the Rules made thereunder must specifi-
G cally provide for such a deeming provision. Otherwise, the assessee
cannot claim any advantage or derive benefit when the Income-tax
Officer did not pass any order on its application filed beyond the
time within which it was required to furnish its return."

H The High Court also observed that as the application for extension
(
C.I.T. v. AJANTAELECTRICALS [NANAVATI,J.] 1091

of time was not received by the Income-tax Officer within time, he was not A
bound to pass any order thereon. It also observed that it was not open to
the assessee to file an application beyond the period within which it was
required to file its return as per the notice under Section 139. We do not
think that High Court was right in holding that it was not open to the
assessee to file an application beyond the period within which he was B
required to file his return. What appears to have weighed with the High
Court while taking that view is absence of any specific provision in the Act
or the rules permitting the assessee to file such an application. For various
reasons the Legislature may not make provisions in detail in matters of
procedure to be followed. It may rest with conferring discretionary power
upon the Court or the authority and leave it to the Court or that authority C
to exercise that power in its discretion as deemed proper and just depend-
ing upon the facts and circumstances of each case. Whether a particular
· thing could be done or not in absence of a specific provision to that effect
would depend upon the object of that provision and other relevant factors
like the consequences which may follow if it is held that it cannot be done. D
From mere absence of a specific provision authorising the I.T.O. to enter-
tain an application made beyond time it was not proper to hold that it was
not open io the assessee to make an application under Section 139(2) for
extension of time after the time allowed had expired and that such an
application could not be entertained by the I.T.O. If an application could
be made even after the time allowed had expired it became the duty of the E
I.T.O. either to grant it or reject it. Once the assessee called upon the
I.T.O. to exercise his discretion it was not open to him to ignore that
request and not to pass any order thereon. In our opinion, the Andhra
Pradesh High Court did not correctly interpret the proviso to Section
139(2). F

The Patna High Court in C.I.T. v. S.P. Viz Construction Co., 165 !TR
732 has also, in the context of Section 139, held that "any application filed
after the due date for filing the return loses all its sanctity". If the a~sessee
made an application for extension of time after the expiry of the time
allowed then the Income Tax Officer was not .bound under the provisions G
of the Income Tax Act or the rules made thereunder to pass any order
thereon. The Patna High Court has only followed the decision of the
Andhra Pradesh High Court in the case of T. Venkata Krislmaiah and Co.
(supra). In Assam Frontier Veneer and Saw Mills v. C.I. T., 104 I.T.R. 479,
to which our attention was drawn by the learned counsel for the Revenue, H
1092 SUPREMECOURTREPORTS (1995] 3 S.C.R.

A the Gauhati High Court held that "the lncome-taJ< Officer is not obligated
to take into consideration an application for extension of time filed by° an
assessee in accordance with Form No. 6, rule 13 of the Income-Tax Rules,
1962, even when it is admittedly submitted long after the due date for filing
the return, unless there be prima facie valid. grounds taken therein, explain-
B ing the reasons for the delay." The Gauhati High Court referred to the
decision of the Andhra Pradesh High Court in T. Venkata Krishnaiah and
Co. (supra) and observed that it was in agreement generally with the
observatiqn made therein while answering the question .whether the In-
come-tax Officer should be deemed to have granted extension of time for
filing the return when he did not pass any orders on the assessee's belated
C application and particularly with the one stating "that it is the duty of an
assessee to file his application for extension of time before the expiry of
the due date of his return". Having said so the Gauhati High Court
observed that "On the other hand, we also do not see that the Income-tax
Officer would cease to have any power, under this proviso, to exercise his
D discretion to grant extension of time upon a belated application, provided
it is filed before the assessment order." From a close reading of that
decision it becomes clear that it does not support the contention now raised
before us by the learned counsel for the Revenue. What it has really held
is that the proviso did not oblige the Income-tax Officer to consider an
application for extension, however, belatedly it might have been made and
E pass an order thereon, even when it had been made long after the due date
of submission of the return.

We hold that the view taken by the Punjab and Haryana High Court
in these cases and by the Calcutta High Court in Sunderdas Thackersay &
Bros. v. C./. T., 137 !TR 646 is correct ·and the contrary view taken by the
F Andhra Pradesh High Court in T. ·venkata Krishnaiah and Co. v. C./. T., 93
!TR 297, Gauhati High Court in Assam Frontier Veneer and Saw Mills v.
C.l. T., 104 ITR 479 and the Patna High Court in C.l. T. v. S.l'. Viz.
Construction Co., 165 !TR 732 is not correct. The applications made by the
assessees under Section 139(2) for extension of time after the expiry of the
G time allowed were maintainable and, therefore, valid. We, therefore, dis-
miss the appeals but pass no order as to costs.

T.N.A. Appeal dismissed.