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7. Because wholly without prejudice to the contentions raised in the foregoing grounds, the learned CIT should have, inter alia, held that :

(a) the second revised return filed on 30th Oct., 2001, was a valid return;

(b) income shown in the said return was liable to be treated as accepted by the AO as no notice under Section 143(2) had ever been issued in relation to the same;

(c) no direction for reframing the assessment could have been given owing to the reason that mandatory requirement of issuing notice under Section 143(2) could not have been fulfilled at this stage.

11. Another plea of the learned Counsel was that the learned CIT in the notice issued under Section 263(1) has taken a view that the third return (second revised return) was not a valid return and, therefore, the assessee's claim for exemption Inform capital gain in relation to a sum of Rs. 55 crores [as had been received from M/s Wilkinson Swords (India) Limited], as had been made for the first time in the third return (second revised return), could not have even been looked, into, much less allowed by the AO, while completing the assessment. Such a view was erroneous. The appellant had filed original "return" on 30th Dec, 1999, which was a "return" under Section 139(1) and as per the provisions contained in Section 139(5), such a return could have been revised "before the expiry of one year from the end of the relevant assessment year or before the completion of assessment, whichever is earlier". In the present case, the regular assessment had been made on 28th Feb., 2002. Therefore, the return filed originally on 30th Dec, 1999, under Section 139(1) could have been revised by 31st March, 2001. In the meantime, the assessee had revised the original return on 30th Nov., 2000, i.e., prior to the expiry of a period of one year from the end of the relevant assessment year. The law is that once a valid revised return is filed, it has the effect of substituting the return filed originally under Section 139(1). The provisions of Section 139(5) as are effective from 1st April, 1989, do not curtail the right of an assessee to file a second revised return at any time, before completion of assessment, once it is found that the original return had been validly revised. The principle is well laid down by the decision of Hon'ble Allahabad High Court in the case of Niranjan Lal Ram Chandra v. CIT . Therefore, the time-limit available to the assessee to file another return (revising the return filed on 30th Nov., 2000), was available and the AO had validly taken cognizance of the said return, before completing the assessment on 28th Feb., 2002.

The legislature, in its wisdom has laid down some built in safeguards, against arbitrary exercise of powers under Section 263. In the present case, such safeguards have been violated inasmuch as the assessment order has been set aside, without even finding out any ground or material to hold the assessee's submissions/objections, as have been put forth in the proceedings under Section 263, were not tenable. In such a situation, the learned CIT's action deserves to be quashed.

24. We have carefully considered the rival submissions and perused the records. First of all we take up the assessee's plea that the assessment order dt. 28th March, 2002, was no order at all and, therefore, revisionary jurisdiction in relation to the same could not have been exercised. The plea has been founded on the contention that the AO did not issue any notice under Section 143(2) after second revised return (third return in the row) had been filed by the assessee on 30th Oct., 2001. It is now a well-settled law that an AO, in order to assume jurisdiction to pass an order under Section 143(3), has to necessarily serve on the assessee a notice under Section 143(2). This is a mandatory requirement and omission to comply with such mandatory requirement of law within the stipulated period of time, is fatal to the very survival of the assessment order. However, such notice is required to be served only if there is a valid return on record. Therefore, answer to the assessee's plea will depend on the answer to the question as to whether second revised return filed on 30th Oct., 2001, was a valid return. There is no dispute that the original return had been filed in time and under Section 139(1). Such a return can be revised, in case the assessee discovers any omission or incorrect statement in such return.

37. The true import of the said principles is that the assessee's tax liability to tax should be worked out correctly, irrespective of the admission made by it in the return; the only restriction being that the relevant facts and other material should be on record, If such a plea is applicable and even enforceable at the appellate stage, we fail to understand as to why the AO himself cannot grant such relief as is admissible to him on the basis of facts, material and information on record, even if the assessee has not claimed the same. The assessee's case here is on the better footing. While the assessment proceedings were in progress and much before the conclusion thereof, it had made a claim before the AO himself that the receipts in question were not exigible to tax and in support of its claim, all the relevant details/information's were placed on record. Thus, on a consideration of totality of the facts and circumstances of the case, we hold that the AO owed a statutory duty to consider the assessee's claim for exemption from capital gain, made before him, inspite of the fact that such claim had not been made in the earlier returns, which were valid and enforceable. In other words, we hold that even though the third return (second revised return) through which claim for exemption from capital gain had been made, was not a valid return, the consideration of such a claim was not ousted from the purview of the assessment proceedings.