1997 (6) TMI 43 - AT - Income Tax

Assessing Officer Assessment Year Penalty Proceedings Revised Return Time Limit For Completion

Issues Involved:
1. Whether the original return filed on 27-1-1987 is a return under section 139(2) or (4) and its effect on the period of limitation.
2. Whether the revised return filed on 27-3-1989 is a valid return under sub-section (2), (4), or (5) of section 139 and its effect on limitation.
3. Whether the assessment for the year 1986-87 completed on 27-3-1990 is barred by limitation under section 153(1)(a), (b), or (c) of the Act.

Detailed Analysis:

Issue 1: Original Return Filed on 27-1-1987
The Tribunal examined whether the original return filed on 27-1-1987 was under section 139(2) or section 139(4). It was concluded that the return was filed under section 139(4) because it was submitted before the notice under section 139(2) was served on the assessee on 10-2-1987. The return was not furnished within 30 days as prescribed in the notice, making it a return under section 139(4). According to the Supreme Court's decision in Kumar Jagdish Chandra Sinha, a return filed under section 139(4) cannot be revised under section 139(5). Therefore, the limitation for making the assessment should have expired on 31-3-1989. Since the assessment was made on 27-3-1990, it was barred by limitation.

Issue 2: Validity of Revised Return Filed on 27-3-1989
The Tribunal considered whether the revised return filed on 27-3-1989 was valid under section 139(2), (4), or (5). It was determined that the revised return could not be treated as a return under section 139(2) because it was not filed within the time prescribed in the notice issued to the assessee. It also could not be considered a revised return under section 139(5) because the original return was filed under section 139(4), which cannot be revised. However, the Tribunal acknowledged that there is no explicit prohibition in section 139 against filing a second or more than one return under section 139(4). Therefore, the revised return could be treated as a second return under section 139(4), extending the limitation period for assessment to one year from the date of filing this return, i.e., 27-3-1989.

Issue 3: Limitation for Assessment Completed on 27-3-1990
The Tribunal analyzed whether the assessment completed on 27-3-1990 was barred by limitation under section 153(1)(a), (b), or (c). The normal time-limit under section 153(1)(a)(iii) is two years from the end of the assessment year, expiring on 31-3-1989. As the assessment was completed on 27-3-1990, it was barred by limitation under this provision.

For section 153(1)(b), which allows an eight-year period in cases of concealment of income, the Tribunal noted that the Assessing Officer did not initiate penalty proceedings under section 271(1)(c) within the normal two-year period nor recorded any finding to that effect. Therefore, the extended period of eight years was not available, and the assessment was barred by limitation under section 153(1)(b) as well.

Under section 153(1)(c), the limitation period is one year from the date of filing the return or revised return under section 139(4) or (5). Since the revised return was filed on 27-3-1989, the limitation expired on 26-3-1990. As the assessment was completed on 27-3-1990, it was barred by limitation by one day under section 153(1)(c).

Conclusion:
The Tribunal concluded that the assessment completed on 27-3-1990 was barred by limitation under sections 153(1)(a), (b), and (c). Therefore, the assessment was invalid in law, and the order of the CIT(Appeals) was vacated. The appeal was allowed, and the assessment was annulled.

← Previous Next →