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TMI Blog1987 (5) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... 147/143(3) on 21-3-1973. Meanwhile, the assessee also put in an application for cancellation of the order of assessment dated 23-5-1968, which was rejected by the Commissioner of Income-tax on 28-3-1969 on the ground that no prejudice had been caused to the assessee by assessment u/s. 143(1). The assessee also put in an application u/s. 154 for cancellation of this assessment order on 22-1-1969. This application was rejected by the ITO on 16-8-1974. 2. On 5-2-1975, the Appellate Assistant Commissioner accepted the appeal of the assessee against the order of the ITO rejecting the application for cancellation of the assessment and that order was upheld by the Tribunal in ITA No. 79/75-76 dated 19-2-1976. The department went in reference and in Income-tax Reference No. 2 of 1977, the Tribunal's order was upheld by the High Court with the following observations : " ...To sum up, a return which is not verified does not conform to the salient requisites of a return as required by sections 139/140 of the Act and rule 12 of the Rules, is an invalid return and no assessment can be framed on the basis of such a return. We answer the question referred to us in the affirmative, i.e. in fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... barred by time as it could be filed only within four years of the issue of notice u/s. 148. Section 153(b) clearly laid down that in case where provisions of section 271(1)(c) were applicable, the time limit would stand extended up to eight years from the end of the assessment year in which a return had been filed instead of four years. In the present case, on the date of framing the assessment, there was a difference of about Rs. 50,000 between the previously assessed income and the initially returned income. The assessee had already moved the CIT u/s. 271(4A) and thus impliedly agreed that the provisions of section 271(1)(c) were applicable to his case. It was only to avoid the consequences that he alleged that the assessment was barred u/s. 148. According to the ITO, since all these points were debatable, there was no case for rectification. He, therefore, rejected the application. 5. On appeal, the AAC was of the opinion that the assessment order dated 21-3-1973 was barred by limitation as laid down under the provisions of section 153(1)(a)(ii) and that the Assessee had a right to get the assessment cancelled under the provisions of section 154 on the footing that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was placed upon the following authorities : Y. Narayana Chetty v. ITO [1959] 35 ITR 388 (SC) CIT v. Ranchhoddas Karsondas [1959] 36 ITR 569 (SC) Estate of the Late A.M.K.M. Karuppan Chettiar v. CIT [1969] 72 ITR 403 (SC) CIT v. M.K.K.R. Muthukaruppan Chettiar [1970] 78 ITR 69 (SC) CIT v. Kurban Hussain Ibrahimji Mithiborwala [1971] 82 ITR 821 (SC) Smt. Sova Sarkar v. ITO [1983] 139 ITR 386 (Cal). Next it was contended that the plea regarding the limitation, which was purely a legal plea, could be taken up by the assessee in any proceedings and for this purpose, reliance was placed upon the Punjab and Haryana High Court decision in the case of Vijay Kumar Jain v. CIT [1975] 99 ITR 349. It was also contended that there could be no waiver in respect of the plea that the asstt. order was beyond limitation and for this purpose, reliance was placed upon the following authorities : Benarsi Silk Palace v. CIT [1964] 52 ITR 220 (All.) Sewlal Daga v. CIT [1965] 55 ITR 406 (Cal.) Kurbanhussein Ibrahimji Mithiborwala v. CIT [1968] 68 ITR 407 (Guj.) Smt. Parbati Devi v. CIT [1970] 75 ITR 625 (All.). It was further contended that if the notice issued by the ITO u/s. 148 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere had been a discovery of some collateral irregularity. 9. This is not all. On 28-2-1973, the assessee filed another return declaring an income of Rs. 69,180. Now u/s. 153(1)(c), an order of assessment can be made after the expiry of one year from the date of filing of a return or a revised return under sub-section (4) or sub-section (5) of section 139. For all intents and purposes, the return filed by the assessee on 28-2-1973 was a revised return within the meaning of section 139(5). The only possible argument that can be raised on behalf of the assesses was that since the original return had been filed by him on 10-1-1969, it was a return u/s. 139(4) and it could be revised u/s. 139(5) but here again it is a highly debatable issue because there is absolutely no reason as to why if an assessment can be made upon a return u/s. 139(4), why any mistake or omission discovered therein cannot be corrected by filing a revised return. Moreover, the assessee had himself in response to the notice u/s. 148 stated that his return filed on 10-1-1969 may be treated as a return filed in pursuance of this notice. Under section 148(1), the ITO is to issue a notice under sub-sec. (2) of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee himself and was for all practical purposes in substance and effect in conformity with or according to the intent and purpose of the Act. While, according to strict interpretation of law, the assessment may be invalid because of the technical mistake, defect, omission or irregularity therein such an irregularity now stands cured by provision, which had not been the subject-matter of interpretation in any of the authorities quoted above. Against the assessment, the assessee could possibly have no grudge and that is why he did not choose to go in appeal. The earlier authorities which laid down that there can be no waiver would cease to have relevance in the present case where the assessment is for all intents and purposes in substance in conformity with the provisions of the Act. Only because of the assessee's fault in not verifying the earlier return which was accepted by the ITO, certain developments resulted in making the provisions of section 147 technically inapplicable to the case. Otherwise, it is probably the fittest case where provisions of section 147 should be invoked because clearly the assessee at the time of filing his original return of income had failed to disclo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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