1983 (4) TMI 71 - AT - Income Tax

Summary

Issues:
1. Whether more than one revised return can be filed before the completion of assessment.
2. Whether a revised return filed after forwarding the draft assessment order can be considered.
3. Whether the time limit for filing a revised return is restricted to the normal period of limitation.
4. Whether the assessment proceedings are considered pending after the draft order is forwarded to the IAC.

Analysis:

Issue 1:
The department contended that only one revised return could be filed under section 139(5). However, the Commissioner (Appeals) held that multiple revised returns could be filed before the assessment is completed. The Commissioner pointed out that section 153(1)(c) allows for an extension of time by one year from the date of filing the revised return, ensuring the limitation period is not violated. The B-Bench of the Delhi Tribunal also supported this view.

Issue 2:
The department argued that a revised return filed after the draft assessment order is forwarded cannot be accepted. Conversely, the counsel for the assessee asserted that the assessment is only complete after the ITO complies with the procedure in section 144B, not merely by forwarding the draft order. The Tribunal agreed with the assessee, emphasizing that the assessment is not complete during the pendency of section 144B proceedings, allowing for the consideration of a revised return filed during this period.

Issue 3:
The department claimed that the revised return filed during the extended period of limitation due to section 144B proceedings should not be considered. However, the Tribunal clarified that the time for filing a revised return is not limited to the normal period of limitation. The Tribunal emphasized that the period excluded under Explanation 1 to section 153 is not an additional grace period but is part of the overall limitation period for completing the assessment.

Issue 4:
The department argued that assessment proceedings are not pending once the draft order is forwarded to the IAC. However, the Tribunal disagreed, stating that the assessment is not complete until the ITO finishes the assessment after receiving instructions from the IAC. Therefore, a revised return filed during the pendency of section 144B proceedings is considered filed before the assessment is finalized.

In conclusion, the Tribunal upheld the Commissioner (Appeals) decision, confirming that the assessee had the right to file a revised return before the completion of the assessment. The appeal by the department was dismissed, and the matter was remanded to the ITO to conduct a fresh assessment considering the revised return filed on 7th August 1980.