1984 (6) TMI 97 - AT - Income Tax

Summary

Issues:
1. Whether the revised return filed by the legal heir of the deceased assessee after discovering omissions can be treated as a valid revised return under section 139(5) of the Income-tax Act?
2. Whether the Income Tax Officer (ITO) was justified in completing the assessment based on the original return filed by the deceased assessee?
3. Whether the claim for deduction of interest against business and house property income made by the legal heir through the revised return should have been considered by the ITO before completing the assessment?

Detailed Analysis:
1. The case involved the filing of a revised return by the legal heir of a deceased assessee after discovering omissions in the original return. The Income Tax Officer (ITO) did not treat the revised return as valid under section 139(5) of the Income-tax Act, stating that the original return was not filed by the assessee under section 139(1) or 139(2). The Commissioner (Appeals) also rejected the argument, citing precedents and opining that the revised return could not be entertained. However, the assessee relied on a case law to support the validity of the revised return.

2. The legal representative of the deceased assessee argued that the ITO should have acted upon the revised return filed by the legal heir, contending that the original return was not complete and correct. The departmental representative supported the Commissioner (Appeals) decision and cited another case law in defense. The assessment was completed based on the original return, leading to a dispute over the treatment of the revised return by the tax authorities.

3. The Tribunal analyzed the provisions of section 139 of the Income-tax Act, emphasizing the right of an assessee to file a revised return to correct any omissions or errors. Referring to a specific case law, the Tribunal highlighted that the statute allows for the filing of a revised return, even if the original return was filed under section 139(4). The Tribunal further examined the scenario where the claim for deduction of interest was made by the legal heir through the revised return before the assessment was completed. It concluded that the revised return should have been treated as a valid claim before the ITO, directing the ITO to act upon the revised return filed by the legal heir.

In conclusion, the Tribunal allowed the appeal, emphasizing the importance of considering revised returns and claims made by legal heirs in the assessment process to ensure accuracy and fairness in tax proceedings.