ITAT Pune: Valid Revised Return Replaces Original for Assessment

The ITAT Pune allowed the appeal, setting aside the AO's order and directing the consideration of the total income declared in the revised return for assessment. The judgment emphasized that a valid revised return under section 139(5) replaces the original return for assessment purposes, as established by relevant High Court decisions.

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Issues:
Appeal against rejection of revised return and assessment based on original return.

Analysis:
The appeal arose from the Commissioner of Income Tax (Appeals) decision for the assessment year 2015-16. The assessee, a partnership firm dealing in garments, initially filed a return declaring total income of Rs. 19,03,485. Subsequently, a revised return was filed on 13.02.2016 declaring total income as Rs. 5,50,420. The case was selected for scrutiny, and the assessment was framed under section 143(3) of the Income Tax Act, determining total income at Rs. 19,03,490. The primary issue was the rejection of the revised return by the Assessing Officer (AO) and the subsequent assessment based on the original return.

During assessment proceedings, the AO rejected the revised return's sales figure, leading to the determination of total taxable income at Rs. 19,03,490. The assessee contended that the revised return was filed due to an error in sales figure computation. The AO and CIT(A) did not find the assessee's submissions satisfactory, upholding the assessment based on the original return.

In the appeal before the ITAT Pune, the assessee argued that once a valid return is filed under section 139(5) of the Act, the original return under section 139(1) should not be considered for assessment. Citing relevant case laws, the assessee emphasized that the revised return replaces the original for assessment purposes. The ITAT, following precedents, held that once a revised return is filed and accepted, the authorities cannot rely on the original return for assessment. Consequently, the ITAT directed the AO to consider the total income declared in the revised return for assessment, allowing the assessee's appeal.

In conclusion, the ITAT Pune allowed the appeal, setting aside the AO's order and directing the consideration of the total income declared in the revised return for assessment. The judgment highlighted the legal principle that a valid revised return under section 139(5) replaces the original return for assessment purposes, as established by relevant High Court decisions.

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