SEN, J. - (1.) THE Tribunal has referred the following questions of law under S. 139 (1) of the IT Act, 1961 ('the Act') : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the return filed by the assessee on 14th March, 1974 was a valid return either under S. 139 (4) or under S. 139 (5) of the IT Act, 1961? 2. If the answer to question No.1 is in the negative, whether the assessee was entitled to get a notice under S. 143 (2) of the said Act, on the basis of the said return? 3. Whether, on the facts and in the circumstances of the case and in view of the assessment made by the ITO on 25th March, 1974 which was not held to be invalid, the Tribunal was justified in not setting aside the said assessment order and directing the ITO to make a fresh assessment according to law? 4. Whether, on the facts and in the circumstances of the case, the conclusion of the Tribunal that no effective opportunity of being heard was given to the assessee even in respect of the original return filed on 25th July, 1973 was unreasonable and perverse? In this case, the assessment year involved is 1971-72 for which the relevant accounting period is the year ended on 30th Sept., 1970?"
(2.) THE facts found by the Tribunal as contained in the statement of case are as under: The assessee was required to file the return under S. 139 (1) by 30th June, 1971. No return, however, was filed by that date. The ITO issued a notice under S. 139 (2) on 6th Sept., 1971. The assessee also did not file any return in response to this notice. The assessee , however, filed the return on 25th July, 1973. The ITO fixed the case on several dates for hearing between 30th July, 1973 and 4th March, 1974. The ITO noticed some credit entries in the assessee's account books aggregating to Rs. 3,06,820. After going through the account books of the assessee and other materials produced by the assessee, the ITO was not satisfied about the genuineness of the credits. He, therefore, treated the amount of Rs. 3,06,820 as the income of the assessee from an undisclosed source. When the matter came up in appeal before the AAC, it was brought to his notice that the ITO had issued a notice under S. 143 (2) of the Act on 4th March, 1974 and 15th March, 1974 and a Director of the assessee -company went to the office of the ITO on 15th March, 1974, but the ITO was out of station. The ITO did not allow any further opportunity to the assessee subsequently but completed the assessment on 25th March, 1974. The ITO appeared before the AAC during hearing of the appeal. He admitted the correctness of the above facts. Another fact was also brought to the notice of the AAC that the assessee had submitted a revised return on 14th March, 1974 showing an income of Rs. 5,590. In the revised return the assessee offered the medical expenses of Rs. 560 for taxation. It was submitted before the AAC on behalf of the assessee that the assessment made on 25th March, 1974 was illegal and void, as the ITO had omitted to issue a notice under S. 143 (2) after receipt of the revised return and that as the ITO had not accepted the revised return, he was bound to issue a notice under S. 143 (2) and as the same had not been done, the assessment was void. The AAC was, however, of the view that the assessee had not submitted any return either under S. 139 (1) or under S. 139 (2) and that its return filed on 25th July, 1973 was under S. 139 (4) . According to the AAC, the assessee could not submit any revised return under S. 139 (5) and that the return filed on 14th March, 1974 was not a valid return and that the ITO was not bound to issue a notice under S. 143 (2) on the basis of the return dt. 14th March, 1974. It was next submitted before him that no opportunity was given to the assessee after 15th March, 1974 before the completion of the assessment on 25th March, 1974 and that the assessment was also invalid on this ground. The AAC found force in this contention of the assessee . He, therefore, set aside the assessment with the direction to the ITO to make a fresh assessment after giving reasonable opportunity to explain the cash credits. Firstly, it was contended that the assessment was illegal, as the assessee had submitted the return on 14th March, 1974 and the assessment had been completed on 25th March, 1974 without issue of a notice under S. 143 (2) . Secondly, it was submitted that once it was accepted that the return filed by the assessee on 14th March, 1974 was a valid one, then it was the duty of the ITO either to accept the return or to issue a notice under S. 143 (2) . It was pointed out that the compliance with the notice fixed for hearing on 15th March, 1974 could not be made because the ITO admittedly was out of Calcutta on some official duty and that he completed the assessment on 25th March, 1974 without allowing any further opportunity. It was next submitted that the ITO failed to observe the principle of natural justice and the assessment order was ab initio void on that ground. On behalf of the Department it was admitted that there was no effective opportunity of hearing allowed to the assessee on the original return, inasmuch as the ITO himself was out of Calcutta. However, reliance was placed on the order of the AAC and further it was contended by the Department that the return submitted on 14th March, 1974 was not a valid return. It was next submitted that there was no illegality in the assessment as such, even if there was no opportunity allowed to the assessee to comply with the terms of the notice issued under S. 143 (2) . It was suggested that the Tribunal could set aside the assessment and put it back at the stage of the filing of the return directing the ITO to issue fresh notice under S. 143 (2) and the time limit laid down under S. 153 (1) of the Act would apply to the assessment made in compliance with the direction of the Tribunal in view of S. 153 (3) (ii) . The Tribunal carefully considered the submissions of both the parties placed before it and for the reasons recorded in para 9 of its order came to the conclusing that the return filed on 14th March, 1974 was a valid return. The Tribunal further held that the assessee was entitled to the service of notice under S. 143 (2) on the basis of the revised return and that the assessment completed on 25th March, 1974 could not be upheld. The Tribunal also held that even on the basis of the original return, the assessee had not been given an effective opportunity to comply with the notice under S. 143 (2) . The Tribunal after considering the decisions relied on behalf of the Revenue observed that it was empowered to set aside an order of the assessment and remand the case to the ITO directing him to comply with the mandatory requirement of S. 143 (2) and make an assessment de nova. The Tribunal did not accept the Department's request that it should set aside the assessment and allow the ITO an opportunity to make a fresh assessment on the basis of the return submitted on 14th March, 1974 after complying with the terms of S. 143 (2) . The Tribunal , thus, cancelled the assessment and allowed the assessee's appeal. On further appeal, two points were urged before the Tribunal. The first question is whether the return filed by the assessee on 14th March, 1974 was a valid return. Sec. 139 (5) lays down: " (5) If any person having furnished a return under sub-s. (1) or sub-s. (2) , discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the assessment is made."
(3.) THERE is no difficulty in accepting the contention made on behalf of the assessee that in view of the recent trend of decisions a revised return can be filed, even when a return was filed within the time prescribed by S. 139 (1) or S. 139 (2) . But the return was actually filed taking advantage of the enlarged S. 139 (4) before the assessment was completed.;