Law: Income Tax Act, 1961

Section: 139,144B

Income-tax----Return---Revised return---Draft assessment order---Revised return filed after draft assessment order-referred with assessee's objections to I.A.C.---I.T.O. not entitled to entertain such revised return---Indian Income Tax Act, 1961, Ss.139(5) & 144-B---[Shri Vallabh Glass Works Ltd. v. I.T.O. (1995) 212 ITR 433 (Guj.) overruled]. Subsection (5) of section 139 of the Income Tax Act, 1961, which permits the filing of revised returns at any time before the completion of the assessment has to be construed and understood in a reasonable manner. In cases where section 144-B of the Act is applicants, the right has to be exercised before the making of the draft assessment order. Once a draft assessment order is made and the matter is referred to the Inspecting Assistant Commissioner on receiving the assessee's objections, the function of the Income-tax Officer practically comes to an end. Thereafter, the only thing remaining for him to do is to pass a final order in accordance with the directions given by the Inspecting Assistant Commissioner. He cannot vary or depart from those directions. If, even after the making of such a reference, the assessee is held entitled to file a revised return that would involve duplication of work and multiplicity of proceedings. It may mean re-doing the entire exercise over again The Act does not provide for such a situation. For the assessment year 1977-78, the appellant filed its returns. Thereafter, it filed a revised return and then a second revised return. After making the appropriate enquiry, the Income-tax Officer made a draft assessment order under section 1448 of the Income Tax Act, 1961, and sent a copy to the appellant. The appellant submitted its objections. Thereafter, the Income-tax Officer referred the matter to the Inspecting Assistant Commissioner as required by section 144-B. While the matter was pending before the Inspecting Assistant Commissioner, the appellant submitted a third revised return. The Income-tax Officer rejected the third return. The appellant filed a writ petition, which the High Court dismissed. On appeal to the Supreme Court: Held accordingly, affirming the decision of the High…

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