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Issues Involved:
1. Validity of the revised return filed by the assessee. 2. Applicability of Section 54(1) IT Act exemption to the assessee. 3. Jurisdiction of the ITO to entertain fresh claims during reassessment. Issue-Wise Detailed Analysis: 1. Validity of the Revised Return Filed by the Assessee: The primary issue in this appeal is whether the assessee can file a revised return claiming the status of an individual when the original assessment was completed in the status of HUF. The original return was filed on 16th April 1983, beyond the due date prescribed under Sections 139(1) or (2), and thus, it was deemed a return under Section 139(4). The assessee argued that under Section 139(5), as it stood before the amendment by the Direct Tax (Amendment) Act, 1987, a revised return could be filed before the assessment was completed. However, the Tribunal noted that Section 139(5) applies only to returns filed under Sections 139(1) or (2), not Section 139(4). Therefore, the revised return filed on 22nd April 1987 was invalid. This conclusion was supported by decisions in O.P. Malhotra vs. CIT (1981) and Eapen Joseph vs. CIT (1987), which held that a voluntary return under Section 139(4) cannot be revised under Section 139(5). 2. Applicability of Section 54(1) IT Act Exemption to the Assessee: The CIT had revised the original assessment order, directing the ITO to reassess the case and deny the exemption under Section 54(1) IT Act, as it applies only to individuals, not HUFs. The Tribunal upheld this direction, stating that the scope of the reassessment was confined to implementing the CIT's order. The Tribunal referenced the Punjab & Haryana High Court's decision in Kartar Singh vs. CIT (1978) and the Allahabad High Court's decision in S.R. Kochhar vs. ITO (1984), which clarified that the ITO's reassessment powers are limited to the issues addressed in the remand order. Thus, the ITO was correct in not considering the revised return and maintaining the status of HUF for the assessment. 3. Jurisdiction of the ITO to Entertain Fresh Claims During Reassessment: The Tribunal concluded that the ITO had no jurisdiction to entertain fresh claims or change the status from HUF to individual during the reassessment. It emphasized that the reassessment was limited to the specific direction given by the CIT to withdraw the Section 54(1) exemption. The Tribunal also noted that HUF and individual are distinct entities under Section 2(31) of the IT Act, and an assessment in one capacity cannot be converted to another without proper procedural steps. This stance was reinforced by various judicial precedents, including decisions in Amjad Ali Nazir Ali vs. CIT (1977) and CIT vs. J.K.A Subrahmanya Chettiar (1977), which held that a revised return under Section 139(5) is not valid if the original return contained deliberate omissions or false statements discovered by the Department. Conclusion: The Tribunal dismissed the appeal, affirming that the revised return filed by the assessee was invalid, the exemption under Section 54(1) was rightly denied, and the ITO had no jurisdiction to entertain fresh claims or change the status during reassessment. The orders of the Dy. Commissioner (A) were upheld as just and correct.
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