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Issues:
Challenge to notice under sections 148 and 147 of the Income-tax Act, 1961 for not filing returns of income for assessment years 1987-88 and 1988-89, rejection of refund claim due to non-filing of prescribed Form No. 30, validity of the impugned notice, requirement of Form No. 30 for refund claims, applicability of section 139(10) for deeming return not filed, legality of decision declaring return non-existent, necessity of application in prescribed form for refund claims, assessment of returns showing loss or profit without accompanying application. Analysis: The writ petitioner challenged a notice under sections 148 and 147 of the Income-tax Act, 1961, for not filing returns of income for the assessment years 1987-88 and 1988-89. The petitioner, despite filing returns after an extension, faced rejection of the refund claim due to not submitting the claim in prescribed Form No. 30. The petitioner argued that the conditions for issuing the notice were not fulfilled and that the return should not be considered invalid solely for lacking the accompanying form. The Revenue contended that returns claiming refunds must be accompanied by Form No. 30 as per rules, and failure to do so renders the return invalid. The legality of the notice depended on the decision declaring the return non-existent under section 139(10) of the Act. The court examined the requirement of Form No. 30 for refund claims and the applicability of section 139(10) for deeming a return not filed. It was noted that the provision of section 139(10) applied to cases where the income was below the taxable limit, not when a loss or profit was shown. The court accepted the argument that the decision under section 139(10) was incorrect due to a total non-application of mind. The court emphasized that the return, though lacking the necessary form, should not be deemed non-existent solely for that reason. The court further discussed the necessity of an application in the prescribed form for refund claims and the assessment of returns showing loss or profit without the accompanying application. It was highlighted that the Department should have given the petitioner an opportunity to submit the required application in Form No. 30 before deeming the return invalid. The court referenced previous judgments to support the view that incomplete returns should not be rejected outright, and the Department should proceed with assessment after giving the assessee a chance to rectify any defects. In conclusion, the court quashed the impugned decisions and directed the Revenue official to assess the return filed by the petitioner upon submission of the necessary application in Form No. 30 for the refund claim. The petitioner was instructed to submit the application within a specified timeframe, and the court waived the time bar due to the prolonged legal proceedings. The application was allowed, and no costs were awarded.
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