9911796707
TMI Blog1998 (10) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... if any, claimed to have been deducted at source and tax on self-assessment "claimed to have been paid". It was also stated that if the defects were not rectified within 15 days of the date of receipt of the notice, the return filed will be treated as invalid and non-est. The time granted for compliance was extended from time to time. The petitioner also went on seeking time submitting that certificates of tax deducted at source were not received from some of the companies which he was trying to secure. On March 6, 1996, the assessee was given a last opportunity of removing the defects latest by March 12, 1996. On March 13, 1996, the Assessing Officer passed an order (annexure P-5), the operative part whereof reads as under : "According to the provision of section 139(9)(c) the return is to be accompanied by proof of payment made under section 140A. In spite of time allowed by the notice under section 139(9) and extension of time allowed on his own request, the assessee has failed to produce the proof of payment. Hence, the return of income filed by the assessee vide R. No. 0179 on October 31, 1995, is treated as invalid and non-est." On March 26, 1996, the petitioner preferred a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payment. It could not be paid for want of liquid funds. 3. As submitted in para. 4(c) of the petition, applications under section 154 for earlier years are pending and the assessee is under the impression that refund will be due to him if the said applications are accepted. These pertain to the matter of giving effect to the orders of the Commissioner of Income-tax (Appeals) passed in 1987 and of the Tribunal passed in 1991." It is not disputed that the tax was actually paid by the assessee on the dates and in the amounts as stated in para. 4 above. The learned Commissioner of Income-tax by order dated February 3, 1997, rejected the revision preferred by the petitioner and confirmed the Assessing Officer's order under section 139(9) forming an opinion that the return having not been accompanied by proof of payment of tax under section 140A and the defect having not been removed in spite of opportunities having been allowed for the purpose the return was rightly declared invalid and non-est. On March 13, 1996, a notice under section 142(1) of the Act was also issued to the petitioner requiring him to file the return of income. The petitioner in compliance with such notice f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come furnished by the assessee is defective, he may intimate the defect to the assessee and give him an opportunity to rectify the defect within a period of fifteen days from the date of such intimation or within such further period which, on an application made in this behalf, the Assessing Officer may, in his discretion, allow ; and if the defect is not rectified within the said period of fifteen days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in any other provision of this Act, the return shall be treated as an invalid return and the provisions of this Act shall apply as if the assessee had failed to furnish the return : Provided 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. Explanation.---For the purposes of this sub-section, a return of income shall be regarded as defective unless all the following conditions are fulfilled, namely :---. . . (c) The return is accompanied by proof of--- (i) the tax, if any, claimed to have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nish the return. Thus, in a case where the return is furnished voluntarily under section 139(1), the Income-tax Officer cannot proceed to make an ex parte assessment under section 144 without serving a notice under section 139(2) or, as the case may be, under section 148. Where, however, the defective return was filed in response to a notice under section 139(2) or section 148, the Income-tax Officer may straightaway proceed to complete the assessment ex parte under section 144 or issue a notice under section 142(1). (vi) The position stated in item (v) above, however is subject to the proviso that in a case, where the assessee rectifies the defect after the expiry of the prescribed period of 15 days or the further period allowed by the Income-tax Officer, but before the assessment is made, the Income-tax Officer may condone the delay and treat the return as a valid return. Thus, in a case where the defect is not rectified within the time allowed but the assessee rectifies the same before the Income-tax Officer has completed the assessment, it will not be open to the assessee to question the validity of the assessment made by the Income-tax Officer on the ground that the defect ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised for a case for condonation was made out. Learned senior standing counsel for the Revenue submitted that such a prayer could not have been acceded to for two reasons ; firstly, the tax was deposited on March 23, 1996, August 8, 1996, and December 6, 1996, i.e., on the dates after the Assessing Officer had already passed an order invalidating the return on March 13, 1996 ; and, secondly, the prayer for condoning the delay should have been made to the Assessing Officer and not to the Commissioner of Income-tax in revision. In the case at hand, the petitioner made no such prayer for condoning the delay reporting to the Assessing Officer the factum of defect having been rectified and hence the question of giving. benefit of the proviso to sub-section (9) of section 139 to the petitioner does not arise. Section 264 confers a wide jurisdiction on the Commissioner. It provides that excepting where section 263 applies, the Commissioner may suo motu or on an application by the assessee call for the record of any proceeding under this Act in which an order has been passed by an authority subordinate to him and may make such inquiry or cause such inquiry to be made and subject to the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e passing of the said order. There was no question of the prayer for extension of time for rectifying the defect being made and entertained by the Commissioner for the first time. If only such a prayer had been made to the Assessing Officer, the facts of notice under section 142(1) of the Act having been issued to the assessee, the filing of the return of income by the assessee and its being processed under section 143(1)(a) of the Act would not have made any difference. Both the courses of action were available to the Assessing Officer. The Assessing Officer could have straightaway proceeded to make best judgment assessment ex parte or could have issued notice under section 142(1) after invalidating the return filed by the assessee. Nevertheless so long as the assessment was not made, power to condone the delay and treat the return as a valid return under section 139 was available to the Assessing Officer. We may place on record that so far as non-filing of proof as to TDS is concerned, it was conceded at the Bar that non-furnishing of such proof would merely render the assessee liable to pay tax once again in spite of its having been deducted at source and, therefore, we have no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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