Revised Return can be Filed after Receiving Income Tax Notice: ITAT [Read Order]

Revised Return - Taxscan

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that a tax benefit claimed by a taxpayer in his revised Income Tax return cannot be denied outright by the department merely because the revised return has been filed after issue of notice,

The assessee, Mahesh H Ahuja omitted to declare long-term capital gain and the consequent deduction in the original return. Further the rental income offered in the original return of income was lesser than the amount actually received by the assessee. Later, the assessee filed a revised return within the time prescribed under section 139(5) of the Act and cured the defects.

The Assessing Officer has accepted the rental income as well as long-term capital gain offered in the revised return of income, however, he has denied assessee’s claim of deduction under section 54 of the Act by stating that the revised return of income filed by the assessee is invalid since it was filed after issuance of notice under Section 143(2) of the Income Tax Act.

On first appeal, the Commissioner of Income Tax (Appeals) also rejected the contentions of the assessee.

Allowing the second appeal, the Tribunal bench noted that the Assessing Officer has adopted a very selective approach in respect of the revised return of income filed by the assessee.

The bench held that as per the provisions contained under section 139(5), if an assessee discovers any omission or wrong statement in the original return of income he can file a revised return of income at any time before the expiry of one year from the end of the relevant assessment year or before completion of the assessment whichever is earlier.

It was noted that there is no bar / restriction in the provisions of section 139(5) of the Act that the assessee cannot file a revised return of income after issuance of notice under section 143(2) of the Act. “It is trite law, the assessee can file a revised return of income even in course of the assessment proceedings, provided, the time limit prescribed under section 139(5) of the Act is available. That being the case, the revised return of income filed by the assessee under section 139(5) of the Act cannot be held as invalid,” the bench said.

“When the assessee has made a claim of deduction under Section 54 of the Income Tax Act, it is incumbent on the part of the Departmental Authorities to examine whether assessee is eligible to avail the deduction claimed under the said provision. The Departmental Authorities are not expected to deny assessee’s legitimate claim by raising technical objection,” the bench added.

Subscribe Taxscan Premium to view the Judgment
taxscan-loader