2002 (6) TMI 10 - HC - Income Tax

Whether, on the facts and in the circumstances of the case, the assessment made by the Income-tax Officer is barred by limitation? - - we are of the opinion that the revised return filed by the assessee on March 22, 1976, was a valid return and the assessment based on that return is also valid, legal and in accordance with the provisions. In this view of the matter, the provisions contained in section 153(1)(c) was clearly attracted enabling the Assessing Officer to pass the assessment order within one year from the end of the month in which the revised return was filed. Since the assessment was made within this period, it cannot be said that the said assessment was either invalid or non est or barred by limitation. We are, therefore, of the view that the Tribunal has not committed any error in holding that the return filed on August 14, 1973, was actually a return under section 139(1) and that consequently the provisions of section 153(1)(c) are attracted and, therefore, the assessment completed on March 15, 1977, is not barred by limitation.

Summary

Issues:
Assessment barred by limitation under section 153(1)(a)(iii) of the Income-tax Act, 1961 - Validity of revised return filed under section 139(5) - Authority of Central Board of Direct Taxes to issue Circular No. 113 extending the time for filing returns.

Analysis:
The case involved a question of law regarding the assessment year 1973-74 and whether the assessment made by the Income-tax Officer was barred by limitation. The assessee filed a return of income on August 14, 1973, declaring total income of Rs. 10,904, after a circular extended the filing deadline to August 15, 1973. Later, a revised return was filed on March 22, 1976, disclosing higher income. The Income-tax Officer processed this return and completed the assessment on March 15, 1977, determining total income at Rs. 79,460.

The primary contention raised was that the original return filed on August 14, 1973, should be considered as filed under section 139(4) and not section 139(1), thus rendering the revised return invalid under section 139(5). The first appellate authority upheld the assessment, stating the original return was voluntary under section 139(1). The Tribunal also approved the assessment, considering the original return as under section 139(1) and the revised return as under section 139(5), thereby not barred by limitation.

The central issue was the authority of the Central Board of Direct Taxes to issue Circular No. 113 extending the filing deadline. The court held that the circular was issued for the proper administration of the Act and was benevolent in nature, granting a general extension for filing returns. The return filed on August 14, 1973, was treated as under section 139(1) due to the circular, making the revised return on March 22, 1976, valid under section 139(5. Therefore, the assessment was not barred by limitation and was legally valid.

In conclusion, the court held in favor of the Revenue and against the assessee, stating that the assessment was not barred by limitation and was in accordance with the provisions of the Income-tax Act, 1961. The reference was disposed of with no order as to costs.