1994 (7) TMI 102 - AT - Income Tax

Summary

Issues:
Validity of revised return under section 139(5) of the IT Act filed by the assessee, Conflict of opinion among different High Courts on the treatment of revised returns, Applicability of Instruction No. 388 issued by CBDT, New Delhi on the time limit for completing assessments, Time-barred assessment order passed by the ITO.

Analysis:

The appeal before the Appellate Tribunal ITAT Ahmedabad-A concerned the validity of a revised return filed by the assessee under section 139(5) of the Income Tax Act, 1961. The issue arose as the original return was filed under section 139(4), and the revised return was filed after certain enquiries were raised by the Income-tax Officer. The assessee contended that the revised return filed on 5-3-1974 could not be considered a valid return under section 139(5) as it did not extend the limitation period for assessment completion. The assessee relied on various High Court decisions to support this argument.

The Departmental Representative (D.R.) argued that contrary views were taken by other High Courts, suggesting that an assessee could file subsequent returns even if the original return was filed under section 139(4), and the limitation period should start from the subsequent return date. The D.R. cited several cases to support this contention.

The Tribunal noted the conflicting opinions among different High Courts on this issue. It specifically highlighted the case of Dr. S.B. Bhargava, where the High Court held that a revised return under section 139(5) could not extend the limitation period for assessment completion. The Tribunal also considered Instruction No. 388 issued by the CBDT, New Delhi, which stated that the extended time limit under section 153(1)(c) would not apply to revised returns filed under section 139(5) after an original return under section 139(4).

Based on the precedents and the Instruction, the Tribunal concluded that the revised return filed by the assessee could not be treated as valid under section 139(5). As a result, the assessment order passed by the ITO was deemed time-barred as it was completed more than one year after the original return date. The Tribunal annulled the assessment order, following the reasoning of the High Court decisions favoring the assessee and the spirit of Instruction No. 388.

The Tribunal also cautioned the ITO to consider the High Court's decision in a related case regarding the refund of tax amounts paid by the assessee in case of annulment of a time-barred assessment. Ultimately, the Tribunal allowed the appeal and annulled the assessment order passed by the ITO, subject to the mentioned observations.