9911796707
TMI Blog1993 (9) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... d arrangement between different classes of creditors and the company. As a result thereof, there was a reduction of the liability of the petitioner to the tune of Rs.29,36,811. The petitioner's accounting period, corresponding to the assessment year 1977-78, ended on September 30, 1976. It filed its return of income on June 30, 1977. A part of the reduced liability was shown as income under section 41(1) of the Act, but after carrying forward the business losses and expenses, the total income shown was nil. It is the case of the petitioner that it subsequently found some discrepancies in the return filed by it on June 30, 1977, and, therefore, it filed a revised return on February 20, 1979. This time, the income shown was Rs. 16,88,553. Again, the total income shown was nil. It then filed a second revised return on November 14, 1979, revising the amount shown as income under section 41(1). After hearing the petitioner, the Income-tax Officer passed a draft assessment order on December 12, 1979, under section 144B proposing variation in the income returned by the petitioner. A copy of the said order was served upon the petitioner and pursuant to the notice given to it, objections we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 153(1)(c) of the Act. Section 139(5) of the Act, as it stood at the relevant time, read as under: "If any person having furnished a return under sub-section (1), or sub-section (2), discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the assessment is made." It is not necessary to reproduce section 143. Section 144B read as under : "144B. (1) Notwithstanding anything contained in this Act, where, in an assessment to be made under sub-section (3) of section 143, the Income-tax Officer proposes to make any variation in the income or loss returned which is prejudicial to the assessee and the amount of such variation exceeds the amount fixed by the Board under sub-section (6), the Income-tax Officer shall, in the first instance, forward a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the assessee. (2) On receipt of the draft order, the assessee may forward his objections, if any, to such variation to the Income-tax Officer within seven days of the receipt by him of the draft order or within such further period not exceeding fifteen days as the Income-tax Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the date on which the Income-tax Officer forwarded the draft order under sub-section (1) of section 144B to the assessee and ending with the date on which the Income-tax Officer received the directions from the Inspecting Assistant Commissioner under sub-section (4) of that section, or, in a case where no objection to the draft order were received from the assessee, a period of thirty days had to be excluded. It is in this context, that the words "at any time before the assessment is made" occurring in sub-section (5) of section 139 are required to be interpreted. What was contended on behalf of the petitioner was that the word "assessment" would mean determination of the total income or loss of the assessee and determination of the sum payable by the assessee as tax. So long as both these things are not completed by the Income-tax Officer, it cannot be said that he has made the assessment. It was submitted that when the Income-tax Officer passes a draft order of assessment, what he does is to disclose his tentative decision in respect of the total income of the assessee and the amount of tax payable by him. He submitted that the words "proposes to make any variation in the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the Income-tax Officer makes a draft order, what happens is that he determines the income or loss of the assessee and also the amount of tax payable by him. But that order passed by him does not become effective and he is required to make a reference to the Inspecting Assistant Commissioner for his scrutiny and directions. But here also, he is required to follow that course if the assessee files objections against the draft order. If no objections are filed, then the Income-tax Officer has to complete the assessment on the basis of the draft order. What is required to be noted is that under such circumstances, the Income-tax Officer has to complete the assessment on the basis of the draft order and no change is contemplated at that stage in the assessment order. Thus, the Income-tax Officer has to complete the assessment on the basis of the draft order and without taking into consideration anything else at that stage. If objections are filed by the assessee against the draft order, then only, he is required to forward the draft order together with the objections to the Inspecting Assistant Commissioner and the Income-tax Officer has to complete the assessment after receiving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner and the assessee is permitted to file a revised return, then, that would set at naught at all the steps taken by the Income-tax Officer under section 144B as, thereafter, he will have to consider the fresh revised return and make the assessment on the basis of the fresh return. That may also lead to a situation where he would be obliged to take one view on the basis of the fresh revised return ; whereas there may be a direction by the Inspecting Assistant Commissioner to take a different view in view of the reference already made on the basis of the previous return. Therefore, if the assessee is permitted to file a revised return even after the Income-tax Officer makes a draft order under section 144B, that would lead to uncertainty and delay in finalising the assessment. Section 144B. is now omitted with effect from April 1, 1989. For all these reasons, we are of the view that once a draft order is made by the Income-tax Officer under section 144B of the Act, the assessee cannot, thereafter, file a revised return. We are coming to this conclusion without going into the question as to whether the Income-tax Officer can issue more than one order. We, therefore, do not think it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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