1983 (4) TMI 77 - AT - Income Tax

Summary

Issues:
1. Interpretation of the provisions regarding filing of revised returns under section 139(5) of the Income-tax Act, 1961.
2. Validity of filing a revised return after the draft assessment order has been forwarded to the Income-tax Appellate Commissioner (IAC) under section 144B(2).
3. Determination of the completion of the assessment process and the impact of the extended period under section 153(1)(c) on the filing of revised returns.

Analysis:
1. The appeal before the Appellate Tribunal concerned the assessment year 1977-78, focusing on the dispute arising from the filing of revised returns by the assessee. The primary contention was whether more than one revised return could be filed under section 139(5) of the Income-tax Act, 1961. The Commissioner (Appeals) held that multiple revised returns could be submitted before the assessment is finalized, emphasizing the right of the assessee to file revised returns until the assessment process is completed. The department argued that only one revised return was permissible, citing a ruling of the Delhi High Court, but the Tribunal disagreed, affirming the assessee's right to file revised returns within the assessment period.

2. Another critical issue addressed in the judgment was the acceptability of a revised return filed after the draft assessment order had been sent to the IAC under section 144B(2). The department contended that such a revised return could not be considered, as it would necessitate the ITO to forward a new draft order to the IAC, which was seen as impermissible. However, the Tribunal upheld the assessee's right to file a revised return even during the pendency of the assessment process, before its finalization by the ITO post IAC's instructions. The Tribunal highlighted that the assessment is not deemed complete until the ITO concludes the assessment following the prescribed procedures.

3. The judgment also delved into the concept of the assessment's completion and the impact of the extended period under section 153(1)(c) on filing revised returns. The department argued that the ITO should only consider revised returns filed within the normal limitation period, excluding the extended period due to section 144B proceedings. However, the Tribunal clarified that the extended period should not be viewed as a grace period for the ITO but rather as a part of the overall limitation period for assessment completion. It emphasized that the right to file revised returns under section 139(5) remains intact, even during extended assessment periods, as long as the revised return is submitted before the assessment is finalized. The Tribunal dismissed the appeal, affirming the Commissioner (Appeals)'s decision to allow the filing of a revised return after setting aside the initial assessment order, directing a fresh assessment considering the revised return filed by the assessee.