INCOME TAX ACT, 1961

Section 263

Revision under section 263 - Erroneous and prejudicial order - Assessment made by AO being invalid and non-est -

Assessee-HUF filed return of income under section 139(4). Further, it filed a revised return of income on the ground that cost of improvement and deduction under section 54F was remained to be claimed. AO acting upon the revised return of income determined the total income of the assessee. CIT invoked his jurisdiction under section 263 and held that the AO ought not to have taken cognizance of revised return and the assessee was not entitled to file revised return of income since the original return of income was only filed under section 139(4). Assessee contended that a revised return filed belatedly could be considered in view of amendment by the Finance Act, 2016 to section 139(5). However, the CIT was of the opinion that the amendment under section 139(5) would apply prospectively and accordingly he set aside the order of the AO. Held: Section 139(5) substituted by the Finance Act, 2016 came into force with effect from 01-04-2017 and appeal under consideration was relating to assessment year 2012-13 and the said substitution being prospective in nature, thus, it would not be applicable to the appeal on hand. In instant case, two returns were filed by assessee one under section 139(4) and another under section 139(5) and since return filed under section 139(4) was validly filed by the assessee, it was incumbent upon the AO to complete the assessment in pursuance of the valid return of income. Therefore, the assessment made by the AO with reference to section 139(5) was not only invalid and non-est but it was erroneous and prejudicial to the interest of Revenue as rightly held by CIT under section 263.

REFERRED :

FAVOUR : Against the assessee

A.Y. : 2012-13

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