ITAT, HYDERABAD BENCH ‘A’, Treatment of a revised return which is defective

Treatment of a revised return which is defective

A defective return filed under any of the provisions of the Income-tax Act, 1961 can be rectified; it is not that only the return filed under section 139(1) can be rectified; the discretion given in section 139(9) is not to treat the return as invalid without giving an opportunity to the assessee to remove the defect.

ITAT, HYDERABAD BENCH ‘A’, HYDERABAD

Sanghi Textiles Ltd.

v.

ACIT

ITA No. 559/Hyd/2003

June 19, 2009

RELEVANT EXTRACTS:

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21. The first issue is taken up first for consideration. Section 139(5) permits the assessee to file a revised return on discovery of an omission or any wrong statement in the original return. Of course, only such return can be revised which has been filed under section 139 (1) or which has been filed pursuant to notice under section 142 (1). Further, a revised return can be filed before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. In the present appeal, we are concerned with assessment year 1999-2000. The revised return was filed, admittedly, before the assessment was made and also before the expiry of one year from the end of the assessment year, i.e. on 21-3-2000. Again, admittedly, the revised return was not accompanied with the necessary accompaniments which rendered it defective as described in section 139 (9) of the Act. Firstly, it needs to be noted that u/s.139 (9), a defective return filed under any of the provisions of the Act can be rectified. It is not that only the return filed u/s.139 (1) can be rectified. To that extent we do not agree with the observations of the Assessing Officer that mostly returns filed u/s.139 (1) only can be rectified. Second important aspect to be noted is that when the last date for filing revised return is 31-3-2001, the revenue authorities cannot artificially curtail the time limit by taking the plea that fifteen days' time was not available with the Assessing Officer to give notice u/s.139 (9). Even if the return is filed on 31-3-2001, and if the Assessing Officer feels that the defect needs to be removed, he can issue notice u/s.139 (9) asking the assessee to remove the defect. If the assessee removes the defect within the stipulated time, the same would relate back to the date of filing the return and the return would be a valid return. But the revenue authorities cannot artificially curtail the time limit and thereby curtail the right of the assessee to file a revised return. The third important aspect to be noted is, indeed there is discretion with the Assessing Officer whether a notice should be issued or not asking the assessee to remove the defect. But such discretion cannot be used to the detriment of the assessee. At times, despite the discrepancy, the Assessing Officer may feel that he can make the assessment and in that case he may use his discretion not to issue notice u/s.139 (9). The discretion given in section 139 (9) is for this purpose and not to treat the return as invalid without giving an opportunity to the assessee to remove the defect. Therefore, to this extent the Assessing Officer was not justified in treating the revised return as invalid.

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