A subsequent return filed under Section 139 (4) of the Income Tax Act, 1961 is a valid return and the assessment thereunder is within the time prescribed under Section 153 of the said Act.

( 1 ) THIS reference under the I. T. Act, 1961, arises out of the assessment of Mst. Zulekha Begum (Khatoon), the assessee, in the assessment year 1963-64, for which the relevant previous year was the financial year 1962-63.

( 2 ) THE facts found and/or admitted in the proceedings are as follows : On September 14, 1964, the assessee filed her voluntary return for the relevant assessment year showing an income of Rs. 10,294. Pursuant thereto, the ITO issued to the assessee a notice under Section 143 (2) of the Act. Thereafter, on September 7, 1967, the assessee filed another return, stated to be a revised return in respect of the same assessment year, showing an income of Rs. 18,429. The income was shown to have been derived from house property and leasehold property. The assessee contended that on April 18, 1962, she had purchased both the ownership as also a perpetual leasehold right in respect of the permises Nos. 21 and 22, Colootola Street, Calcutta, for a total consideration of Rs. 80,000. The ownership right was acquired for a consideration of Rs. 25,000 and the perpetual leasehold right was acquired for Rs. 55,000. The source of this consideration was stated to be, inter alia, cash and loan deposits from the mother and the five brothers of the assessee, aggregating to Rs. 46,000.

( 3 ) BEFORE the ITO the assessee filed confirmation letters from the said creditors and/or depositors where it was stated that the amounts of the loans and deposits had been disclosed under Section 24 of the Finance (No. 2) Act of 1965. Notices under Section 131 of the I. T. Act, 1961, were sent by registered post to the said creditors and/or depositors, which were returned with the postal remark " out of Calcutta ". Thereupon, the assessee was asked to produce the said persons. In spite of several adjournments none of them were produced and ultimately the assessee admitted that she was unable to produce them. The ITO noted the relationship between the assessee and the said persons and held that the alleged loans and deposits from the said persons were bogus. He held further that the disclosures under Section 24 of the said Finance (No. 2) Act of 1965 could not be accepted as conclusive evidence of the genuineness of the said loans and deposits. He also held that the credit worthiness of the alleged lenders and/or depositors remained unproved and that the cash book and the ledger of the assessee were concocted and had been produced in support of the alleged transactions on an after-thought for the purpose of explaining the alleged source of her investments. Accordingly, the ITO rejected the said books of account. He added back the said amount of Rs. 46,000 as income from undisclosed sources to the total income of the assessee and assessed it to tax accordingly.

( 4 ) BEING aggrieved, the assessee preferred an appeal against the assessment and contended before the AAC for the first time that the assessment was without jurisdiction and a nullity as it fell within the mischief of Section 153 (1) (a) of the I. T. Act, 1961. It was contended that the original return was filed by the assessee under Section 139 (4) of the 1961 Act on September 14, 1964, and that the assessee had not filed any return either under Section 139 (1) or Section 139 (2 ). Therefore, the subsequent return filed on September 7, 1967, was invalid inasmuch as a revised return could not be filed under Section 139 (5) of the 1961 Act in a case where initially a return had been filed under Section 139 (4), A revised return under Section 139 (5) could only be filed where a person had filed a return either under Sub-section (1) or (2) of Section 139 of the Act. It was contended that under Section 153 (1) (a) of the 1961 Act, the assessment should have been completed by the ITO by March 31, 1968, but, in fact, the assessment was completed after that date and was, therefore, barred by limitation. The AAC construed Section 139 (4) of the 1961 Act and held that a