2006 (3) TMI 545 - AT - Income Tax

Filling of revised return - Number of times revised return can be filled - assessment had been completed through an intimation u/s 143(1) - second revised return assessee claimed bad and doubtful debts - AO ignored this second revised return on the ground that the assessee loses the right of filing any revised return under section 139(5) after the assessment has been completed - Since the original return and the first revised return were processed u/s 143(1) prior to the filing of second revised return, it is held that the second revised return cannot be entertained as it is invalid and also disallowed the claim of bad and doubtful debts HELD THAT - We are in total agreement with the finding of learned CIT(A). An assessee can file revised return as many number of times so long as it is within the limitation period and if the assessee discovers any omission or wrong statement therein . If the Assessing Officer takes cognizance of first revised return filed on 23-5-2000, even if the earlier return was processed under section 143(1)( a ) on 27-3-2000, since the revised return was filed on 17-1-2001, which is within one year from the end of the relevant assessment year, the same is valid and hence learned CIT(A) was justified in having cognizance of the same. Liability of claim of bad debts - As after the amendment of section 36(1)( vii ) w.e.f. 1-4-1989, the assessee is no longer required to prove that the debts have become bad in particular year. So long as the write off is bona fide, the Assessing Officer cannot question whether the debt has become bad in a particular year. Since what has been written off in the books of account, the same was rightly held allowable by learned CIT(A). Revenue appeal dismissed.

Summary

Issues:
1. Validity of revised return filed by the assessee.
2. Allowability of bad and doubtful debts claimed by the assessee.

Analysis:

Issue 1: Validity of revised return filed by the assessee
The case involved the question of whether the revised return filed by the assessee on 17-1-2001 was valid. The Assessing Officer contended that the second revised return was invalid as it was filed after the intimation had been issued, which he considered equivalent to filing a return after assessment. The CIT(A) disagreed with this view and held that the second revised return was valid. The authorized representative of the assessee argued that an "intimation" is not an "assessment" as per relevant case laws. The CIT(A) upheld the validity of the second revised return, emphasizing that the Assessing Officer was not justified in ignoring it.

Issue 2: Allowability of bad and doubtful debts claimed by the assessee
The Assessing Officer disallowed the claim of bad and doubtful debts amounting to Rs. 54,79,176, stating that the debts had not been proven to be bad as they were still appearing in the accounts. The authorized representative of the assessee contested this decision, providing evidence from the minutes of a Board Meeting showing the debts to be written off. The representative argued that the debts were written off in accordance with the requirements of section 36(1)(vii) and that the Assessing Officer's contention was unfounded. The CIT(A) sided with the assessee, holding that as long as the write-off was bona fide, the debts could be considered allowable, irrespective of whether they had become bad in a specific year.

In conclusion, the ITAT Bangalore dismissed the appeal, upholding the validity of the revised return filed by the assessee and allowing the claim of bad and doubtful debts based on the provisions of section 36(1)(vii). The judgment emphasized the importance of following legal procedures and requirements in determining the validity of returns and the allowability of deductions.