Revised return cannot cure deliberate false original return; penalty remains valid under the Income-tax Act, 1922.

A revised return filed after an assessee knowingly submitted a false original return cannot be treated as a valid revision under Section 22(3) of the Income-tax Act, 1922. That provision applies only where the original return was made in good faith and the assessee later discovers an omission or wrong statement before assessment. A deliberate and fraudulent concealment of income cannot be converted into a bona fide revision by filing a later return, and the revenue may still rely on the original return for penalty purposes. Penalty under Section 28 was therefore sustainable.

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Issues: Whether a revised return filed after the assessee knowingly submitted a false original return could be treated as a revised return under Section 22(3) of the Income-tax Act, 1922, so as to prevent the imposition of penalty under Section 28 of the Income-tax Act, 1922.

Analysis: Section 22(3) permits a revised return where the assessee discovers an omission or wrong statement in an earlier return before assessment is made. That provision applies where the original return was incorrectly made in good faith and the later revision is based on a genuine discovery. It does not cover a case where the assessee knew at the time of filing the original return that it was false and deliberately omitted income. A later return cannot convert a deliberate and fraudulent concealment into a bona fide revision, nor can it deprive the revenue authorities of the power to consider the earlier return for the purpose of penalty.

Conclusion: The revised return could not absolve the assessee from penalty, and the authorities were entitled to impose penalty under Section 28 of the Income-tax Act, 1922.

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