AMIT BAJAJ ADVOCATE

Gujarat High Court hjas held in an important case that if after the issuance of intimation u/s 143(1)(a), a revised return is furnished by an assessee under sub-section (5) section 139 it is incumbent upon the Assessing Officer to process the revised return and amend the intimation issued under section 143(1)(a) on the basis of the revised return.

The court further held that an intimation u/s 143(1)(a) of the Act cannot be equated with an assessment  framed u/s 143(3) of the Act and the Assessing Officer cannot refuse to process the revised return and modify the intimation in accordance with section 143(1B) of the Act

Thus this judgement makes following points very clear:

1. Revised return can be filed within limitation period after the issuance of intimation u/s 143(1)(a) as such intimation cannot be considered as assessment order. 

2.After the issuance of intimation u/s 143(1)(a) if revised return is filed then the AO must amend the intimation earlier issued. 

 Gujarat High Court

[2011] 333 ITR 0508

No. - 138 of 2009 Dated - March 8, 2010                        

JUDGMENT  


Ms. H. N. Devani J.-

In this appeal under section 260A of the Income-tax Act, 1961 (the Act), the appellant-Revenue has proposed the following question stated to be a substantial question of law arising from the impugned order of the Tribunal dated January 25, 2007 of the Income-tax Appellate Tribunal :

"Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by the Commissioner of Income-tax (Appeals) in directing the Assessing Officer to process the revised return filed by the assessee under section 143(1B) of the Act though the same was filed after the original return had already been processed under section 143(1)(a) ?"

The assessment year is 1995-96. The respondent-assessee had filed its original return of income for the assessment year under consideration on November 30, 1995, disclosing total income of Rs. 21,46,600. The said return was filed in time and was processed under section 143(1)(a) of the Act. Within a period of one year from the relevant assessment year, the assessee on the basis of the opinion of the chartered accountant and tax expert, filed a revised return on January 21, 1997, declaring business loss of Rs. 12,08,686. The revised return was occasioned because certain expenses which were of revenue nature remained to be claimed in the original return as they were debited to the pre-operative expenses. The Assessing Officer did not process the revised return under section 143(1B) of the Act and intimated the assessee that he was not acting upon the revised return as assessment under section 143(1)(a) was already completed. In the mean-time, the assessee moved an application under section 119 of the Act before the Commissioner of Income-tax, Gujarat-1, Ahmedabad on December 27, 1999, requesting for issuance of directions to the Assessing Officer to consider the revised return filed under section 139(5) of the Act. The said application came to be rejected by the Commissioner who also held that the claim of the assessee was devoid of any merit and that section 139(5) was not intended to provide a loophole for reducing the tax liability by extra legal means. The assessee, thereafter moved an application dated March 30, 2000 under section 154 of the Act before the Assessing Officer requesting him to take cognizance of the revised return under the provisions of section 143(1B) of the Act. The Assessing Officer rejected the said application holding that the revised return had been filed beyond the time limit stipulated under section 139(5) of the Act. While rejecting the said application the Assessing Officer also placed reliance upon the order passed by the Commissioner under section 119 of the Act.

The assessee carried the matter in appeal before the Commissioner (Appeals) who recorded a finding that the revised return was filed on January 21, 1997, but rejected the appeal on other grounds. The assessee carried the matter in further appeal before Tribunal, who, vide the impugned order dated January 25, 2007 allowed the appeal.

Mr. M. R. Bhatt, learned senior counsel appearing for the appellant-Revenue supported the orders passed by the Assessing Officer and the Commissioner (Appeals).

As can be seen from the impugned order of the Tribunal, the Tribunal has held that under section 143(1B) of the Act, it is permissible for an assessee to file a revised return under section 139(5) after issuance of the intimation and that the intimation already sent is required to be amended on the basis of the revised return ; that the said provision does not permit the Assessing Officer to consider the validity of the claim made by the assessee under section 139(5) of the Act. The Tribunal recorded as a matter of fact that the revised return which was filed on January 21, 1997 was within a period of one year from the date of filing of the original return. The Tribunal further found that although intimation as envisaged under section 143(1) had been sent to the assessee prior to the filing of the revised return, the assessment had not been completed by the Assessing Officer by that date. The Tribunal was of the view that an intimation under section 143(1)(a) of the Act cannot be regarded to be an assessment and that if intimation under section 143(1)(a) is treated as an assessment the provisions of section 143(1B) would be rendered nugatory. The Tribunal held that section 143(1B) makes it obligatory on the part of the Assessing Officer to process the revised return provided it is filed within the time permitted under the Act and to revise the intimation that has already been issued by the Assessing Officer.

The Tribunal observed that in the order made under section 154, the Assessing Officer had not held that the revised return was invalid but had rejected the application on the ground that the return had been filed beyond time, whereas on the basis of evidence and the material filed before it, the Tribunal has found as a matter of fact that the revised return had been filed within the time permitted under section 139(5) of the Act. The Tribunal, accordingly held that once the revised return was filed within time, the Assessing Officer was bound to process it under section 143(1B) of the Act.Sub-section (5) of section 139 provides that if any person, having furnished a return under sub-section (1), or in pursuance of a notice issued under sub-section (1) of section 142, discovers any omission or wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of assessment, whichever is earlier.

In the present case the assessment year is 1995-96. It is an admitted position that only intimation under section 143(1)(a) had been issued and that the assessment had not been completed when the revised return came to be filed. Hence, the assessee was entitled to furnish the revised return at any time before the expiry of one year from the end of the assessment year 1995-96. From the facts noted hereinabove it is apparent that the revised return was filed on January 21, 1997 which is well within the prescribed period.
Section 143(1B) as it stood between April 1, 1989 to May 31, 1999, in so far as the same is relevant for the purpose of the present appeal reads thus :

"(1B) Where an assessee furnishes a revised return under sub-section (5) of section 139 after the issue of an intimation, or the grant of refund, if any, under sub-section (1) of this section, the provisions of sub-sections (1) and (1A) of this section shall apply in relation to such revised return and-

(i) the intimation already sent for any income-tax, additional tax or interest shall be amended on the basis of the said revised return and where any amount payable by way of income-tax, additional income-tax or interest specified in the said intimation has already been paid by the assessee then, if any such amendment has the effect of-

(a) enhancing the amount already paid, the intimation amended under this clause shall be sent to the assessee specifying the excess amount payable by him and such intimation shall be deemed to be a notice of demand issued under section 156 and all the provisions of this Act shall apply accordingly ;

(b) reducing the amount already paid, the excess amount shall be refunded to the assessee ;"

On a plain reading of section 143(1B) it is apparent that the provision mandates that if after the issuance of intimation, a revised return is furnished by an assessee under sub-section (5) section 139 it is incumbent upon the Assessing Officer to process the revised return and amend the intimation issued under section 143(1)(a) on the basis of the revised return. At this stage there is no question of going into the validity of the return filed under section 139(5) of the Act, if the revised return is filed within the prescribed period of limitation. An intimation under section 143(1)(a) of the Act cannot be equated with an assessment framed under section 143(3) of the Act and the Assessing Officer cannot refuse to process the revised return and modify the intimation in accordance with section 143(1B) of the Act.

In the aforesaid facts and circumstances, it cannot be said that the impugned order of the Tribunal suffers from any legal infirmity so as to warrant interference. The appeal is, accordingly, dismissed in the absence of any question of law, as proposed or otherwise, much less any substantial question.