1987 (10) TMI 100 - AT - Income Tax

Summary

Issues:
1. Assessment cancellation for the assessment year 1978-79 due to exceeding the limitation period.
2. Interpretation of provisions under sections 139(1), 139(2), 139(4), and 139(5) of the Income-tax Act, 1961.
3. Applicability of case laws - O. P. Malhotra v. CIT, Dr. S. B. Bhargava v. CIT, and ITO v. Bohra Film Finance.
4. Validity of filing a revised return under section 139(4) within the prescribed time limit.
5. Impact of filing a revised return on the period of limitation for assessment under section 153(1)(c).

Detailed Analysis:
The appeal was filed by the revenue against the cancellation of the assessee's assessment for the assessment year 1978-79 by the Appellate Asstt. Commissioner, citing the assessment was made after the limitation period. The assessee contended that the return filed on 17-2-1981 was valid as it was a revised return under section 139(4), which should have been considered within the limitation period ending on 31-3-1981. The AAC's decision was based on case laws from the Delhi High Court and Allahabad High Court, supporting the assessee's argument.

During the hearing, the Departmental Representative argued that the AAC misapplied the case laws and favored the revenue. In contrast, the assessee's counsel relied on a judgment by a Special Bench of the Tribunal in ITO v. Bohra Film Finance. The discussion revolved around the distinction between provisions of sections 139(4) and 139(5) regarding the filing and revision of returns, emphasizing that a return filed under section 139(4) can be revised under the same section within the prescribed time limit.

The Tribunal analyzed the case of O. P. Malhotra, where it was established that a return filed under section 139(4) can be revised under the same section within the specified time frame. Referring to the Bohra Film Finance case, it was clarified that a revised return filed within the limitation period extends the assessment completion time under section 153(1)(c). The Tribunal concluded that the revised return filed by the assessee within the prescribed time was valid and extended the assessment period, rendering the assessment by the ITO valid.

Therefore, the Tribunal allowed the revenue's appeal, canceled the previous order, and directed the AAC to reconsider the assessee's appeal on other grounds. The cross-objection raised by the assessee was sustained, emphasizing the importance of filing a revised return within the statutory time limits to impact the assessment period under the Income-tax Act, 1961.