2009 (12) TMI 656

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....under section 147 of the Income-tax Act for the assessment year 1995-96.   2. We have heard advocate Sri P. Balakrishnan, appearing for the appellant and senior standing counsel Sri P. K. R. Menon, appearing for the respon- dents.   3. Admittedly, the assessee did not file any return of income under sub- section (1), (4) or (5) of section 139. In fact, a belated return was filed on December 31, 1999, after which notice was issued under section 148 of the Income-tax Act whereunder the Assessing Officer proposed to make income escaping assessment. Thereafter, the assessee filed a revised return on July 19, 2000, returning an income of Rs. 4.62 lakhs based on which assessment was made accepting the said return. However, the Com....

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....s Act, where, in respect of any assessment year, there is on the part of a firm any such failure as is mentioned in section 144, the firm shall be so assessed that no deduc- tion by way of any payment of interest, salary, bonus, commission or remuneration, by whatever name called, made by such firm to any partner of such firm shall be allowed in computing the income chargeable under the head 'Profits and gains of business or profession' and such interest, salary, bonus, commission or remuneration shall not be chargeable to income-tax under clause (v) of section 28.   148. Issue of notice where income has escaped assessment- (1)Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall ....

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....wever, ordered revision of the assessment holding that since the assessee did not file a return, it was not entitled to the deductions claimed because of the prohibition contained in section 184(5) read with section 144(1) of the Act. The assessee's contention is that when a return is filed based on the notice issued under section 148, by virtue of fiction avail- able under the latter part of section 148, such return is to be treated as a regular return and all the provisions of the Act will apply. The contention of counsel for the appellant is that when there is compliance with the notice under section 148 by filing a return, the return so filed should be treated as return filed under section 139 of the Act and so much so, the failure refe....