1984 (6) TMI 104 - AT - Income Tax

Summary

Issues:
1. Assessment year 1976-77 - Income determination and addition from unexplained sources.
2. Limitation period for assessment completion.
3. Validity of assessment based on revised returns under section 139(4).
4. Interpretation of section 153(1)(c) regarding the time limit for assessments and revised returns.
5. Comparison with the decision of the Special Bench in ITO v. Bohra Film Finance.
6. Validity of assessment completion within the prescribed period.

Analysis:
The judgment by the Appellate Tribunal ITAT Cochin dealt with an appeal concerning the assessment year 1976-77, where the Income Tax Officer (ITO) determined the income at Rs. 1,01,820, including an addition of Rs. 85,000 from unexplained sources. The assessee contended that the assessment exceeded the limitation period. The Commissioner (Appeals) held the assessment was within time and allowed the assessee to cross-examine certain parties. The main ground of appeal was the correctness of the assessment period. The assessee filed returns on 10-5-1978 and 5-1-1979, with the assessment completed on 4-1-1980, beyond the normal period up to 31-3-1979, unless the assessment was valid within one year of the second return filed on 5-1-1979.

The issue revolved around the interpretation of section 153(1)(c) of the Income-tax Act, 1961, regarding the time limit for assessments and revised returns. The contention was whether the extended period of one year was available from the date of filing a revised return under section 139(4). The Special Bench decision in ITO v. Bohra Film Finance was cited, emphasizing that a revised return under section 139(4) does not extend the limitation period. The Tribunal clarified that a revised return under section 139(4) within the prescribed period is valid for assessment completion within one year from that return.

The Tribunal rejected the assessee's argument that the Special Bench decision supported their position, emphasizing that a revised return under section 139(4) within the specified period is merely another valid return under the section. Additionally, an alternative argument regarding the applicability of section 153(1)(b) for an extended eight-year period due to concealment of income was not addressed, as the appeal was dismissed based on the main contention favoring the department.

In conclusion, the appeal was dismissed, affirming the validity of the assessment completion within the prescribed period based on revised returns under section 139(4), in accordance with the interpretation of section 153(1)(c) and the relevant case law.