1972 (3) TMI 16 - HC - Income Tax

Return is filed prior to 1st April, 1962 - revised return is filed after that date - which act is applicable - Income-tax Officer had jurisdiction to take and continue the assessment proceedings. He enjoyed that jurisdiction under the Act of 1922 by virtue of section 297(2)(a) of the Act of 1961. The conditions and limitations to which that jurisdiction is subject do not differ in any material respect from those governing the corresponding jurisdiction under the Income-tax Act, 1961. Therefore, although the assessment proceedings purported to have been taken in its later stage by reference to the provisions of the Act of 1961, it must be referred to the jurisdiction of the Income-tax Officer under the Act of 1922 - assessment for the assessment year 1961-62 is a valid assessment

Summary

Issues:
Validity of assessment under section 143(3) of the Income-tax Act, 1961 based on the filing of original and revised returns.

Analysis:
The case involved a reference made by the Income-tax Appellate Tribunal regarding the validity of an assessment made under section 143(3) of the Income-tax Act, 1961. The assessee, a company, initially filed a return of income in June 1961, showing a loss, but without the necessary accompanying documents. Subsequently, a revised return was filed in October 1962. The controversy arose regarding which return should form the basis for assessment. The Appellate Assistant Commissioner canceled the assessment order, stating it could not be made under the new Act as the original return was filed before the enforcement of the 1961 Act.

The Tribunal held that the assessment order could be validly made under section 143(3) of the 1961 Act. The main issue revolved around whether the original return filed before April 1, 1962, or the revised return filed after that date should be considered for assessment. The Tribunal found that the revised return superseded the original return and should be the basis for assessment.

The High Court analyzed the validity of the returns filed by the assessee. It was held that the original return, despite some defects, was not a nullity and could not be equated to no return under the provisions of the 1961 Act. The Court emphasized that the revised return, which rectifies any errors or omissions in the original return, should be considered the effective return for assessment purposes.

The Court discussed the distinction between a revised return and a correction of the return, stating that once a revised return is filed, the original return is deemed withdrawn and substituted by the revised return. The judgment referred to relevant sections of the Income-tax Act, emphasizing the importance of filing a correct and complete return for assessment purposes.

The Court ultimately held that the assessment was validly made under section 143(3) of the Income-tax Act, 1961, based on the revised return filed by the assessee. One judge disagreed on the application of section 297(2)(b) and argued that section 297(2)(a) should apply, but concurred with the validity of the assessment for the assessment year 1961-62 under the Act of 1922. The question was answered in the affirmative, and costs were awarded to the Commissioner of Income-tax.