1981 (2) TMI 76 - HC - Income Tax

Summary

Issues Involved:
1. Validity of the revised return filed by the assessee.
2. Applicability of the 1922 Act vs. the 1961 Act for assessment.
3. Tribunal's decision to not cancel the assessment order.
4. Procedural correctness of the AAC's order to set aside the assessment.

Summary:

1. Validity of the Revised Return:
The ITO observed that the assessee filed a return u/s 139(4) on March 30, 1965, and a revised return on March 28, 1966. The ITO deemed the revised return invalid as u/s 139(5) allows a revised return only if the original return was filed u/s 139(1) or (2). The AAC, however, considered the revised return valid under s. 22(3) of the 1922 Act. The Tribunal upheld the ITO's view, stating that the revised return could not be treated as valid u/s 139(5) since the original return was filed u/s 139(4).

2. Applicability of the 1922 Act vs. the 1961 Act:
The AAC believed the 1922 Act applied, but the Tribunal concluded that the 1961 Act governed the assessment procedure due to s. 297(2)(b). The High Court affirmed the Tribunal's view, noting that the return filed on March 30, 1965, was valid u/s 139(4) of the 1961 Act.

3. Tribunal's Decision to Not Cancel the Assessment Order:
The Tribunal found that the ITO acted legally in ignoring the second return filed by the assessee and thus did not cancel the assessment order. The High Court agreed, stating that s. 139(5) does not permit a revised return for returns filed u/s 139(4), and the Tribunal's decision was correct.

4. Procedural Correctness of the AAC's Order:
The assessee argued that the AAC should have annulled the assessment instead of setting it aside. The High Court noted that since the Tribunal's view was upheld, this question did not arise. The High Court also mentioned that the Tribunal should have directed the AAC to address the merits of the assessment, but no such plea was raised or referred.

Conclusion:
The High Court answered the reference in the affirmative, supporting the Tribunal's decision. The Commissioner was entitled to costs in the reference, with counsel's fee set at Rs. 200.