Filing return under Section 153A does not bar revised return under Section 139(5) if not inconsistent; revision valid

ITAT held that filing a return in response to notice under s.153A does not bar filing a revised return; s.139(5) applies where not inconsistent with s.153A. The Tribunal found the assessee had discovered an inadvertent error (figures of a different AY), filed the revised return within the time prescribed in the s.153A notice and before completion of assessment, so the revision was valid. Assessment was set aside to give effect to the revised return. Decision against Revenue.

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1. ISSUES PRESENTED and CONSIDERED

1. Whether a return of income filed pursuant to notice under section 153A of the Income Tax Act can be revised under the provisions of section 139(5) of the Act.

2. Whether the conditions prescribed under section 139(5) for filing a revised return have been complied with in the instant case.

3. Whether the Assessing Officer was justified in rejecting the revised return filed under section 153A on the ground that no provision exists for revision of such return.

4. The applicability and interpretation of the phrase "so far as may be" in section 153A(1)(a) regarding the applicability of provisions of section 139 to returns filed under section 153A.

5. Whether the income declared in the return filed under section 153A on 10.04.2015 was a result of a clerical error and thus liable to be corrected by filing a revised return.

6. The relevance and sufficiency of evidence, including absence of incriminating material during search, to establish correctness of the revised return.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Whether a return filed under section 153A can be revised under section 139(5)

- Legal Framework and Precedents:

Section 153A(1)(a) requires a person subject to search under section 132 to file a return of income within the period specified in the notice, and states that the provisions of the Act shall apply "so far as may be" as if such return were filed under section 139. Section 139(5) permits revision of a return filed under section 139(1) within specified time limits.

A coordinate bench has held that the phrase "so far as may be" in section 153A(1)(a) means that provisions of section 139 apply unless inconsistent with section 153A, thus permitting application of section 139(5) for revision of return filed under section 153A.

Unlike the erstwhile section 158BC which explicitly barred revision of returns filed after search, section 153A contains no such prohibition.

- Court's Interpretation and Reasoning:

The Court noted that section 153A is drafted to align with section 139, except where inconsistent. Since section 139(5) is not inconsistent with 153A, the right to file a revised return under 139(5) applies equally to returns filed under 153A.

The Court rejected the Assessing Officer's position that no provision exists for revision of returns filed under section 153A.

- Conclusion:

Returns filed under section 153A can be revised under section 139(5), subject to compliance with conditions therein.

Issue 2: Compliance with conditions for filing revised return under section 139(5)

- Legal Framework:

Section 139(5) allows revision of a return if the assessee discovers any omission or wrong statement therein, and the revised return is filed before the expiry of one year from the end of the relevant assessment year or before completion of assessment, whichever is earlier.

- Court's Reasoning and Findings:

The assessee filed the return under section 153A on 10.04.2015 within the prescribed 20-day period from notice dated 17.12.2014. The AO did not dispute the timeliness or initiate penalty proceedings for delay.

The revised return was filed on 14.12.2016, before completion of assessment on 29.12.2016, thus within the prescribed time limit.

The Court accepted the CIT(A)'s finding that the return filed on 10.04.2015 contained an inadvertent error of copying figures from AY 2014-15, constituting a wrong statement or omission.

- Application of Law to Facts:

The Court held that the conditions under section 139(5) were satisfied: the original return was filed within prescribed time, the assessee discovered a mistake, and the revised return was filed before assessment completion.

- Conclusion:

The revised return filed under section 153A was valid and compliant with section 139(5) conditions.

Issue 3: Justification of AO's rejection of revised return filed under section 153A

- AO's Contentions:

The AO rejected the revised return on the ground that there is no provision for revision of return filed under section 153A, and that the income declared in the original section 153A return was deliberate and not a clerical error.

- Court's Analysis:

The Court found the AO's reasoning flawed, noting that the return filed under section 153A is to be treated as a return under section 139 "so far as may be".

The AO's observation that every entry in the return filed under section 153A tallied with the computation was not sufficient to disprove inadvertent error, especially when figures corresponded to a different assessment year.

The Court accepted the CIT(A)'s view that the AO failed to conduct any enquiry or investigation to verify the correctness of the income declared in the return filed under section 153A.

- Conclusion:

The AO's rejection of the revised return was not justified, as the law permits revision and the facts supported the claim of inadvertent error.

Issue 4: Interpretation of "so far as may be" in section 153A(1)(a)

- Precedent and Reasoning:

The phrase "so far as may be" restricts the application of provisions of section 139 to those not inconsistent with section 153A.

Provisions such as filing, verification, and revision of returns under section 139 apply to returns filed under section 153A, unless specifically excluded.

Penalty provisions applicable under section 139 also apply to returns filed under section 153A.

- Conclusion:

The phrase "so far as may be" ensures harmonious application of section 139 provisions, including revision of returns, to returns filed under section 153A.

Issue 5: Whether income declared in return filed under section 153A was a clerical error

- Court's Findings:

The CIT(A) found that the income declared in the return filed on 10.04.2015 under section 153A was mistakenly copied from figures of AY 2014-15, not AY 2011-12.

The assessee submitted an affidavit confirming the correct income for AY 2011-12 as Rs. 30,64,640/-.

During search, no incriminating material or disclosure suggesting undisclosed income of Rs. 55,59,210/- was found.

The AO did not conduct any enquiry to verify the correctness of the return filed under section 153A.

- Treatment of Competing Arguments:

The AO contended the difference was deliberate concealment, but the Court found no evidence to support this.

The Court accepted the assessee's explanation of inadvertent human error and the affidavit as credible.

- Conclusion:

The income declared in the return filed under section 153A on 10.04.2015 was a bona fide clerical error, justifying revision.

Issue 6: Sufficiency of evidence to support revised return

- Evidence Considered:

Original return filed on 30.07.2011 declared income at Rs. 30,64,640/-.

Return filed under section 153A on 10.04.2015 declared income at Rs. 86,23,850/- (later corrected to Rs. 86,91,160/- in CIT(A) order).

Revised return filed on 14.12.2016 declared income at Rs. 30,64,640/-.

Affidavit filed by assessee confirming correct income.

No incriminating documents or disclosures found during search operation.

AO did not dispute the original return or initiate penalty proceedings for delay or concealment.

- Court's Reasoning:

The Court found that the original return and revised return figures matched and were consistent with the assessee's books of accounts.

The absence of incriminating material and the affidavit supported the genuineness of the revised return.

The Court held that the return filed on 10.04.2015 was irrelevant for AY 2011-12 due to the clerical error.

- Conclusion:

The evidence supported acceptance of the revised return as reflecting the true income for AY 2011-12.

Cross-References:

The analysis of issues 1 and 4 are interlinked, both dealing with interpretation of section 153A and its relationship with section 139.

Issues 2, 5, and 6 collectively address the factual and procedural compliance for revision of return and the correctness of declared income.

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