Revised return and depreciation option: valid revision allowed change from straight line to written down value method.

A valid revised return under section 139(5) replaces the original return where omissions or wrong statements are discovered within time and the revision is bona fide; on those facts, the revised return was valid. Under Rule 5(1A), an eligible power-generating undertaking may alter its depreciation computation in a revised return where the depreciation option had already been exercised within the prescribed time in the original return. The Court treated the due-date requirement as directory in the context of a genuine revised return and distinguished authority dealing with exemption provisions. The assessee was therefore entitled to adopt the written down value method, and the Revenue's challenge failed.

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Issues: (i) Whether the revised return filed by the assessee under section 139(5) of the Income-tax Act, 1961 was valid; and (ii) whether, after filing a valid revised return, the assessee could change the depreciation method from straight line method to written down value method under Rule 5(1A) of the Income Tax Rules, 1962.

Issue (i): Whether the revised return filed by the assessee under section 139(5) of the Income-tax Act, 1961 was valid.

Analysis: Section 139(5) permits a revised return upon discovery of an omission or wrong statement in the original return within the prescribed time. The revised return in this case was not confined to the depreciation claim alone, but also corrected the treatment of unconfirmed sale proceeds and claimed business expenditure. On the facts found by the lower authorities, the omissions were bona fide and were discovered after the original return had been filed. A valid revised return substitutes the original return for the purposes of the Act.

Conclusion: The revised return was valid.

Issue (ii): Whether, after filing a valid revised return, the assessee could change the depreciation method from straight line method to written down value method under Rule 5(1A) of the Income Tax Rules, 1962.

Analysis: Rule 5(1A) allows an eligible power-generating undertaking to opt for depreciation under Appendix I instead of Appendix IA if the option is exercised before the due date for furnishing the return under section 139(1). Once the revised return is accepted, it supersedes the original return. The Court treated the due-date requirement as directory in the context of a genuine revised return, while holding that the assessee had already exercised the depreciation option within time in the original return and had merely altered the computation method in the revised return. The decision relied on the distinction between exemption provisions and depreciation provisions, and held that the strict rule applied in the cited exemption case did not govern this situation.

Conclusion: The assessee was entitled to adopt the written down value method in the revised return.

Final Conclusion: The substantial questions of law were answered against the Revenue, the Tribunal's view was sustained, and the appeals failed.

Ratio Decidendi: A valid revised return under section 139(5) supplants the original return, and where the assessee had already exercised the depreciation option within time and the revision is bona fide, the depreciation computation may be altered in the revised return notwithstanding the original choice under Rule 5(1A).

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