1987 (6) TMI 35 - HC - Income Tax

Assessment barred by limitation; revised return deemed invalid. Assessee prevails over Tribunal decision.

The court held that the assessment made on March 6, 1976, was barred by limitation as the revised return filed on March 11, 1975, was deemed invalid. ... Assessment, Limitation, Return Issues Involved:1. Whether the assessment is barred by limitation u/s 153(1)(c) of the Income-tax Act.2. Validity of the revised return filed u/s 139(5) of the Income-tax Act.3. Applicability of the extended period of limitation u/s 153(1)(b) of the Income-tax Act.Summary:1. Limitation u/s 153(1)(c):The primary issue was whether the assessment completed on March 6, 1976, was barred by limitation. The assessee argued that the assessment should have been completed within one year from the date of filing the original return on May 10, 1974, making the deadline May 10, 1975. The Tribunal held that the revised return filed on March 11, 1975, extended the limitation period to March 11, 1976. However, the court found that the revised return was invalid, and thus, the assessment was barred by limitation.2. Validity of Revised Return u/s 139(5):The assessee filed a revised return on March 11, 1975, which the Tribunal accepted as valid. The court, however, held that u/s 139(5), a revised return can only be filed if the original return was filed u/s 139(1) or 139(2). Since the original return was filed u/s 139(4), the revised return was invalid and had no legal consequences.3. Extended Limitation u/s 153(1)(b):The Revenue contended that the period of eight years u/s 153(1)(b) should apply as the case was referred to the Inspecting Assistant Commissioner for penalty u/s 271(1)(c). The court rejected this argument, noting that the Tribunal did not sustain the assessment on this ground and the Revenue did not seek a reference on this issue.Conclusion:The court concluded that the assessment made on March 6, 1976, was barred by limitation as the revised return filed on March 11, 1975, was invalid. The Tribunal's decision was overturned, and the question was answered in favor of the assessee.