INCOME-TAX OFFICER Vs. MURUGAN AUTO AGENCIES

JUDGEMENT

(1.) The admitted facts are as follows. The assessee is a firm. For the assessment year 1980-81, corresponding to the previous year ended 31-3- 1980, the assessee had paid advance tax of Rs. 11,000. The last day for finding a return for the assessment year 1980-81 was 31-3-1983 under section 139(4) which provides that the return may be furnished before the end of two years from the end of the assessment year. However, the assessee filed as return only on 16-5-1983 showing a total income of Rs. 2,990 which was below the maximum amount not liable to tax. Thereupon the ITO issued a notice u/s 148 on 19-9-1983 in response to which the assessee intimated to the ITO that the return filed earlier could be treated as a return in response to the notice u/s 148. Yet the Income- tax Officer passed the following order :-

(2.) The assessee appealed to the AAC and contended that since the returns were filed in response to the notice u/s 148, the assessment should be completed and the amount paid refunded. The AAC observed as follows :-

(3.) Before us the revenue has taken exception to this order and it was contended that the ITO was not bound to make an assessment after issuing notice u/s 148 if he finds that no income had escaped assessment. Reliance was placed on the decisions in Kevaldas Ranchhodas v. CIT, 1968 68 ITR 842 and Anglo-French Textile Co. Ltd. v. CIT, 1950 18 ITR 906 to contend that the provisions of section 148 were only for the benefit of the revenue and not for the assessee. It was also contended that the appeal was not maintainable because there was no order passed by the Income-tax Officer as he had only lodged the return. On the other hand, it was contended on behalf of the assessee that the advance tax paid could not be retained by the revenue without any authority of law and reliance was placed on the decision in the case of Deep Chand Jain v. ITO, 1983 TAXMAN 522.