2011 (12) TMI 64 - HC - Income Tax

Invalid return- e-filing of the return- ITRV Form had not been received at Centralized Processing Center though several times sent by ordinary post- Held that - Section 139 (9) stipulates that where the assessee rectifies the defect after the expiry of the said period of fifteen days or the further period allowed, but before the assessment is made, the Assessing Officer may condone the delay and treat the return as a valid return. Since the order of assessment in present case has still not been passed hence the assessee is permitted to file a verification of the return before the Assessing Officer within a period of one week from date of order. The Petition of the assessee is allowed.

Summary

Issues:
Challenge to communication deeming return of income invalid due to ITRV form not received by Income Tax Department.
Interpretation of Section 139(9) of the Income Tax Act, 1961 regarding defective returns.
Consequences of treating a return as invalid and powers of the Assessing Officer.

Analysis:
The Petitioner, a firm of Solicitors, challenged a communication deeming their return of income invalid as the ITRV form was not received by the Income Tax Department. The Petitioner uploaded the return for Assessment Year 2009-10 electronically and sent the ITRV form by ordinary post as per Department instructions. Despite multiple submissions of the form, the Department claimed non-receipt, leading to the invalidation of the return.

Section 139(9) of the Income Tax Act allows the Assessing Officer to intimate and provide an opportunity to rectify defects in a return within a specified period. Failure to rectify renders the return invalid, subject to the Assessing Officer's discretion to condone delays before assessment. The Act specifies conditions for a valid return, including proper filling of income computation details.

Treating a return as invalid has significant repercussions, prompting Parliament to provide mechanisms for rectification and validation by the Assessing Officer. In this case, the Court found the Department's communication misconceived as the Petitioner had followed prescribed procedures for electronic filing and ITRV submission. Consequently, the Court directed the Petitioner to file the verification of the return before the Assessing Officer within a week, quashing the erroneous order dated 21 March 2011.

The judgment highlights the importance of adherence to procedural requirements in income tax filings and the Assessing Officer's discretionary powers in addressing defects in returns. The Court's intervention in rectifying the erroneous communication underscores the need for procedural fairness and compliance with statutory provisions to prevent unwarranted consequences for taxpayers.