2023 (1) TMI 1169 - AT - Income Tax

Validity of assessment order passed u/s 143(3) - assessee's revised return of income not been taken into consideration by the AO - HELD THAT - In the light of the judgment of Mangalore Chemicals Fertilizers Ltd. 1991 (1) TMI 70 - KARNATAKA HIGH COURT we are of the opinion that since the assessee had filed the revised return of income on 19.03.2015, the original return filed dated 29.09.2013 u/s 139(1) of the Act effaces and obliterates. Since the revised return of income was filed on 19.03.2015 u/s 139(4) of the Act, it was a valid revised return as per the law in force at that time. In such a scenario, the AO ought to have considered the revised return of income for assessing the income of assessee. But, despite assessee filing the same, the AO erred is not considering the same and passed the assessment on 27.03.2015. Therefore, we set aside the order of the Ld. CIT(A) and remand the assessment back to the file of the AO with a direction to frame denovo the assessment. AO frame de-novo the assessment taking in to consideration the revised return of income. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
1. Consideration of revised return of income filed by the assessee.
2. Validity of assessment order passed without considering the revised return.

Issue 1: Consideration of revised return of income filed by the assessee
The appellant, an assessee, filed an appeal against the order of the Commissioner of Income Tax for the assessment year 2013-14. The main contention was that the revised return of income filed by the assessee on 19.03.2015 was not taken into account by the Assessing Officer (AO) before passing the assessment order under section 143(3) of the Income Tax Act on 27.03.2015. The AO noted that despite various notices, the assessee did not appear before him, and the assessment was getting time-barred. The AO made additions to the income of the assessee based on un-served notices and issued a show-cause notice. The assessee appealed to the CIT(A) who partly allowed the appeal. The appellant argued that the AO should have considered the revised return filed by the assessee, citing a Karnataka High Court decision that a valid revised return effaces the original return for assessment purposes.

Issue 2: Validity of assessment order passed without considering the revised return
The CIT-DR for the department expressed doubt about whether the original return was filed before the due date but later confirmed that the original return was filed on 29.09.2013. The revised return filed on 19.03.2015 was acknowledged by the CIT(A). Referring to the Karnataka High Court judgment, the Tribunal held that the revised return filed by the assessee effaced the original return. The Tribunal found that the AO erred in not considering the revised return before passing the assessment order on 27.03.2015. Consequently, the Tribunal set aside the CIT(A)'s order and remanded the assessment back to the AO for a de novo assessment, emphasizing that the assessee should be given a fair opportunity during the assessment proceedings. The Tribunal directed the AO to consider the revised return of income while framing the assessment.

In conclusion, the appeal of the assessee was allowed for statistical purposes, and the Tribunal emphasized the importance of considering a revised return of income in assessment proceedings to ensure a fair and accurate assessment.