Law:

Section:

Section 143 of the Income-tax Act, 1961 - Assessment on remand - Assessment year 1966-67 - Whether a revised return only cures defects contained in original return and does not wash away original return - Held, yes - Whether, therefore, assessment made by ITO within period of limitation on basis of original return ignoring revised return might be an erroneous assessment but would not be a nullity - Held, yes Section 153 of the Income-tax Act, 1961 - Assessment - Time limit for completion of - Assessment year 1966-67 - Whether once original assessment was completed by ITO within period of limitation, there was no further prohibition for making a fresh assessment in consequence of or to give effect to any finding or direction contained in order passed by AAC - Held, yes FACTS The assessment of the assessee, a firm, for the relevant assessment year was completed on 16-3-1971 on the basis of the return of income filed on 7-7-1966. On appeal, an additional ground was allowed to be urged to the effect that before the said assessment was completed, two revised returns were filed by the assessee, one on 16-5-1970 and the other on 7-7-1970. But the assessment was made by the ignoring the said revised returns and as such the said assessment was bad. The AAC held that since the ITO had before him two revised returns, the ITO was not justified in making the assessment on the basis of the return filed on 7-7-1966, and set aside the assessment with directions to the ITO to frame the assessment afresh on the basis of the revised returns. The Tribunal held that the impugned assessment was not legal and that being so when the time-limit for completion of the relevant assessment had already expired. On reference: HELD An originally filed return is a return in all essential respects and the revised return only cures the defects contained in the original return. It does not wash away the original return. As a matter of fact, in the first revised return, the status of the assessee was claimed as registered firm. The ITO rejected the claim by an order under section 185. The said fact had been recorded in the assessment order itself. In the second revised return, the assessee was…

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