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2024 (1) TMI 1176 - AT - Income TaxValidity of Notice issued u/s 143(2) - Period of limitation - Defective return - Removal of defect beyond 15 days u/s 139(9) - AO took up the original ROI filed for processing after the defects were removed - HELD THAT - AO should have treated the return as non-est when the assessee has not removed the defect within prescribed time of 15 days from the date of issue of the notice. The Assessing Officer has no leverage to extend the time and drag it till the limitation of time to issue notice u/s. 143(2) expires. The notice issued in this case got time barred and the assessment is treated as nullity. Decided in favour of assessee.
Issues involved: The judgment addresses the issue of whether the notices issued under section 143(2) and section 142(1) of the Income-tax Act were time-barred.
Issue 1 - Time-barred Notices under Section 143(2) and Section 142(1): The appellant filed the present appeal against the order of Ld. NFAC/CIT(A), New Delhi dated 22.12.2022. The appellant contended that the notices issued under section 143(2) and section 142(1) were barred by limitation. The High Court of Delhi judgment in the case of SMC Comtrade Ltd. vs ACIT Circle 24(1) was relied upon, emphasizing that the impugned notices were beyond the prescribed time limit. The original Return of Income was filed on 14-10-2016, and subsequent notices were issued pointing out defects in the return. The defects were rectified by the appellant within the specified time frames. The Assessing Officer processed the return on 22-11-2017 after the defects were rectified. The appellant argued that the notices issued on 11-8-2018 and 31-8-2018 were time-barred as per the provisions of Section 143(2) of the Act. The petitioner's plea was supported by the decision in the Sohan Lal Chhajjan Mal case, indicating that the return date relates back to the original filing date. It was concluded that the notices were time-barred, and the assessment was deemed null and void. Issue 2 - Treatment of Return as Non-Est: The Assessing Officer was expected to treat the return as non-existent if the defect was not rectified within the prescribed 15-day period from the notice issue date. The Assessing Officer lacked authority to extend the time period beyond the limitation for issuing notices u/s. 143(2). In this case, the notice issued was time-barred, rendering the assessment null and void. The appellant's appeal was allowed based on these findings. The judgment highlights the importance of adhering to statutory timelines for issuing notices under the Income-tax Act, emphasizing that failure to rectify defects within the specified time frame can lead to the nullity of assessments. The decision provides clarity on the treatment of returns and the consequences of exceeding the prescribed time limits for issuing notices.
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