1987 (11) TMI 127 - AT - Income Tax

Summary

Issues:
1. Whether the assessee's claim to withdraw the liability for interest of Rs. 65,88,875 based on a revised return filed under section 139(5) was justified.

Analysis:
The main issue in this appeal before the Appellate Tribunal ITAT Jaipur was whether the CIT (A) erred in disallowing the assessee's claim to withdraw the liability for interest of Rs. 65,88,875 based on a revised return filed under section 139(5) for the assessment year 1983-84. The assessee initially filed a return declaring a loss and later filed a revised return claiming nil income and withdrawing the interest liability claim. The dispute arose as the interest in question was waived in a subsequent year, leading to a disagreement on the timing of the claim and waiver of the interest liability.

The Tribunal considered the facts that the interest in question was not waived or remitted in the accounting year relevant to the assessment year under consideration. The assessee, following the mercantile system of accounting, claimed the interest as a deduction in the original return. The revised return was filed under section 139(5) to withdraw the interest claim. The Tribunal analyzed relevant case laws, including Sulemanji Ganibhai v. CIT and Kumar Jagadish Chandra Sinha v. CIT, to determine the validity of the revised return. It was established that for a revised return to be valid, there must be a discovery of omission or wrong statement in the original return, which was not the case here.

The Tribunal highlighted the conditions set by previous judgments for accepting the validity of a revised return, emphasizing that deliberate concealment or false statements in the original return would not entitle the assessee to revise the return. In this case, the assessee's original return accurately reflected the interest claim, and there was no omission or wrong statement. As the interest liability was waived in a subsequent year, the Tribunal upheld the decision of the lower authorities in disallowing the revised return and confirming the allowance of the interest deduction claimed in the original return. The Tribunal dismissed the appeal, ruling in favor of the revenue authorities based on the facts and legal precedents analyzed during the proceedings.