Second revised return held invalid u/s 139(5); no bona fide mistake, no referable question under 256

HC upheld the Tribunal's finding that the assessee's second revised return filed on 31.03.1984 did not satisfy section 139(5) of the Income-tax Act, as no bona fide inadvertence, clerical error or unintentional omission in the original return was established, despite a large variation between the original and revised figures. The Tribunal's conclusion that there was no material to show discovery of any such mistake was treated as a pure finding of fact. Consequently, no referable question of law arose under section 256(1)/(2). Reliance on an earlier departmental advertisement and prior precedents was held inapplicable. The reference application was rejected without any order as to costs.

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Issues Involved: Application u/s 256(2) of the Income-tax Act, 1961 challenging the Tribunal's order rejecting the reference application u/s 256(1) for the assessment year 1981-82.

Question 1: Whether the revised return filed by the assessee was valid u/s 139(5) of the Income-tax Act, 1961, due to a bona fide inadvertence or mistake.

The court considered the submission that the revised return was filed after the discovery of an omission or wrong statement, falling under section 139(5) of the Act. However, it was held that the mere filing after discovery is not sufficient; the omission or wrong statement must be due to a bona fide inadvertence or mistake on the part of the assessee. Referring to a previous case, it was noted that the significant difference in the second revised return without explanation did not support a finding of inadvertent mistake or omission. The Tribunal's factual conclusion that there was no material to show such an error in the original return was upheld, leading to the rejection of this question as it did not raise a legal issue.

Question 2: Whether the revised return was valid considering a circular published by the Central Board of Direct Taxes in 1971.

The court found that the decision cited by the assessee was not applicable to the present case as the assessment year was much later than the notification issued in 1971. Another case reference provided by the assessee was deemed irrelevant to the current circumstances. It was concluded that the questions raised were factual rather than legal, leading to the rejection of the application without costs.

This judgment highlights the importance of establishing a bona fide inadvertence or mistake for a revised return to be considered valid under the Income-tax Act, 1961, and emphasizes the need for questions raised in applications to be of a legal nature rather than factual for court consideration.

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