1980 (10) TMI 89 - AT - Income Tax

Summary

Issues:
1. Validity of assessment orders under section 143(3) read with section 148 for the assessment years 1976-77 and 1977-78.
2. Correctness of the date of notices issued under section 148.
3. Jurisdiction of the Income Tax Officer (ITO) to issue notice under section 148 when a return has already been filed under section 139(4).
4. Application of section 292B to rectify mistakes committed by the ITO in framing assessments.

Analysis:
1. The appeals for the assessment years 1976-77 and 1977-78 were considered together due to similar facts. The ITO issued notices under section 148 on 31st Jan., 1979, but mistakenly mentioned the date as 31st March, 1979. The AAC quashed the assessment order for 1976-77 due to the invalid notice under section 148. However, the AAC upheld the assessment for 1977-78, which was unclear in reasoning. The Tribunal found that the ITO's action under section 148 was invalid as the assessee had already filed a return under section 139(4), rendering section 148 inapplicable. The assessment for 1976-77 was quashed, and the appeal of the Revenue was dismissed.

2. For the assessment year 1977-78, the AAC wrongly assumed that the ITO did not act under section 148, despite clear indications in the assessment order. The Deptl. Rep. argued that the assessment should be judged as if made in consequence of the return under section 139(4) or under section 292B to rectify the ITO's mistake. The Tribunal held that the ITO's action under section 148 was unjustified, and section 292B cannot be used to wash out illegalities. The assessment for 1977-78 was also found to be invalid, and it was quashed. The appeal of the assessee succeeded, and it was allowed.

3. The Tribunal emphasized that the ITO's actions under section 148 were invalid as the assessee had already filed returns under section 139(4), making section 148 inapplicable. The Tribunal rejected the Revenue's argument to treat the assessments as if made under section 139(4) or to invoke section 292B to rectify the ITO's mistakes. The Tribunal upheld the AAC's decision to quash the assessments for both years, emphasizing the importance of following the correct legal procedures in income tax assessments.