2009 (8) TMI 1235 - AT - Income Tax

Summary

Issues Involved:
1. Validity of the revised return filed by the assessee.
2. Interpretation of "intimation" under s. 143(1) and "assessment" under s. 143(3).
3. Applicability of the Supreme Court decision in the case of Sun Engineering Works (P) Ltd.

Summary:

1. Validity of the Revised Return Filed by the Assessee:
The assessee company, engaged in the manufacture and sale of pig iron, filed a return of income on 30th Oct., 2004, declaring a total income of Rs. 20,79,53,900. The return was processed u/s 143(1) on 22nd March, 2005. The AO issued a notice u/s 148 on 2nd Dec., 2005, proposing to reassess the income. The assessee filed a revised return u/s 139(5) on 6th Jan., 2006, claiming deductions under s. 80-IB and adjusting unabsorbed depreciation. The AO completed the assessment accepting the revised return. The CIT, however, observed that the AO erroneously allowed the deduction under s. 80-IB, stating that reassessment proceedings u/s 148 are meant to bring to tax "income which had escaped assessment" and not for making new claims.

2. Interpretation of "Intimation" under s. 143(1) and "Assessment" under s. 143(3):
The CIT argued that the original return processed u/s 143(1) should be considered as an assessment, thereby disallowing the revised return filed by the assessee. The CIT relied on the decision of the jurisdictional High Court in CIT v. Anderson Marine & Sons (P) Ltd., which equated an intimation u/s 143(1) to an assessment u/s 143(3). However, the assessee contended that an intimation u/s 143(1) cannot be equated to an assessment u/s 143(3), citing various decisions, including the Supreme Court judgment in Asstt. CIT v. Rajesh Jhaveri Stock Brokers (P.) Ltd., which clarified that an intimation under s. 143(1) is not an assessment.

3. Applicability of the Supreme Court Decision in the Case of Sun Engineering Works (P) Ltd.:
The CIT relied on the Supreme Court decision in CIT v. Sun Engineering Works (P) Ltd., which stated that reassessment proceedings u/s 148 are meant to bring to tax any income that escaped assessment, and new claims for deductions cannot be made. The assessee argued that the revised return was filed within the statutory period allowed u/s 139(5), and thus the case does not fall within the ratio laid down in Sun Engineering Works (P) Ltd. The Tribunal agreed with the assessee, stating that the revised return was justified and the acceptance of the claim in the revised return during the reassessment process cannot be deemed erroneous.

Conclusion:
The Tribunal set aside the order of the revisional authority, allowing the appeal filed by the assessee, and held that the revised return filed within the period specified u/s 139(5) was valid. The distinction between "intimation" and "assessment" was upheld, and the ratio of the Supreme Court decision in Sun Engineering Works (P) Ltd. was deemed inapplicable to the facts of this case.