1992 (2) TMI 5 - HC - Income Tax

Summary

Issues involved:
The issue involved in this case is whether the Inspecting Assistant Commissioner erred in not considering the revised return filed by the petitioner before passing the final assessment order.

Judgment Details:

The petitioner, a public limited company, submitted a return of income on August 24, 1978. The Income-tax Officer forwarded a draft of the proposed order of assessment to the assessee on March 30, 1981, u/s 144B of the Income-tax Act, 1961. The assessee filed objections on April 10, 1981. Subsequently, the Income-tax Officer forwarded the draft order along with objections to the Inspecting Assistant Commissioner, and a hearing was scheduled for June 17, 1981. Prior to the hearing, the petitioner submitted a revised return on June 15, 1981, which was brought to the attention of the Inspecting Assistant Commissioner during the hearing on June 17, 1981. Despite this, the Inspecting Assistant Commissioner passed a final assessment order on June 23, 1981, ignoring the revised return.

The petitioner contended that the Inspecting Assistant Commissioner's failure to consider the revised return, despite it being filed before the assessment order, rendered the order illegal. The petitioner argued that the right to submit a revised return, as provided by the Act, should be respected and considered by the assessing authority before finalizing the assessment. The respondents did not dispute that the revised return was filed before the assessment order and that it was brought to the attention of the Inspecting Assistant Commissioner during the hearing.

The court held that the Inspecting Assistant Commissioner erred in not considering the revised return filed by the petitioner before passing the final assessment order. Consequently, the court quashed and set aside the impugned order of assessment and the demand notice. The concerned Income-tax Officer was directed to complete the assessment proceedings after taking into consideration the revised return. The petition was allowed, and the rule was made absolute with no order as to costs.