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TMI Blog2020 (2) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... cts being removed, the return would relate back to the date of filing of the original return, that is, 10.09.2016 and consequently, the limitation for issuance of notice under sub-section (2) of section 143 of the Act would be 30.09.2017, viz. six months from the end of the financial year in which the return under sub-section (1) of section 139 came to be filed. In the present case, it is an admitted position that the impugned notice under sub-section (2) of section 143 of the Act has been issued on 09.08.2017, which is much beyond the period of limitation for issuance of such notice as envisaged under that sub-section. The impugned notice, therefore, is clearly barred by limitation and cannot be sustained. - Decided in favour of assessee. - R/Special Civil Application No. 13924 Of 2018 - - - Dated:- 24-10-2019 - Ms. Harsha Devani And Ms Sangeeta K. Vishen, JJ. Darsha R. Patel for the Petitioner. Mrs. Mauna M. Bhatt for the Respondent. JUDGMENT Ms. Harsha Devani, By this petition under articles 226 and 227 of the Constitution of India, the petitioner has challenged the notice dated 09.08.2018 issued under section 143(2) of the Income-tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of filing of the return to be 10.09.2016. It was submitted that the provisions contained in section 139(9) of the Act make a distinction between a defective return and an invalid return and that a defective return is not ipso facto to be regarded as an invalid return and that it is only when a return contains any specified defects and the Assessing Officer, in his discretion, intimates the defects to the assessee and the assessee fails to rectify the same within the specified time, that the Assessing Officer may treat the return to be invalid. Therefore, it is only if the defect is not removed within the time period allowed or within the extended time period that the return can be treated as an invalid return. It was submitted that therefore, it is the date of filing of the original return under section 139(1) of the Act which is required to be reckoned for the purpose of calculating the time limit for issuance of notice under section 143(2) of the Act. 4.2 It was further submitted that the return filed in response to the notice under section 139(9) of the Act is not a fresh return, but is in continuation of the original return rectifying the specified defects, as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... original return came to be cured under section 139(9) of the Act on 15.10.1992, the same would relate back to 31.12.1991, which is the date of original filing of the return. 4.6 Reliance was also placed upon an unreported decision of the Bombay High Court in the case of Atul Projects India (P.) Ltd. v. Union of India [Writ Petition No. 3501 of 2018, dated 24-1-2019], wherein the court placed reliance upon its earlier decision in the case of Prime Securities Limited (supra) and held that the date of filing of return would be the date on which it was originally presented and not on the date on which the defects were removed. 4.7 Reference was made to the decision of the Delhi High Court in case of Bharat Nidhi Ltd. v. CIT [2007] 165 Taxman 314/306 ITR 230, wherein the court has held that upon the defects being removed, the return would relate back to the original filing date. 4.8 It was, accordingly, urged that the impugned notice, being barred by limitation, deserves to be quashed and set aside and the petition deserves to be allowed in the terms of the reliefs prayed for. 5. Opposing the petition, Mrs. Mauna Bhatt, learned senior standing counsel for the respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.1 The attention of the court was invited to the provisions of section 143 of the Act to point out that sub-section (2) thereof refers to a return furnished under section 139 or in response to a notice under section 142(1) of the Act. It was submitted that section 143(2) of the Act does not state that such return is required to be furnished under section 139(1) of the Act and hence, the period of limitation does not have to be computed from the date on which the return is filed under section 139(1) of the Act. It was submitted that in the facts of the present case, it is only on the date when the corrected return came to be filed under section 139(9) of the Act that the return could be considered to be valid and hence, in terms of section 143(2) of the Act, the period of limitation would have to be calculated from the date when such corrected return was filed under section 139(9) of the Act. 5.2 In support of her submissions, the learned senior standing counsel placed reliance upon a decision of this Court in case of Pr. CIT v. Babubhai Ramanbhai Patel [2017] 249 Taxman 470/84 taxmann.com 32, wherein the court has held that in terms, sub-section (5) of section 139 allows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Roller Flour Mills v. CIT [2008] 171 Taxman 70/301 ITR 1. 5.6 Reference was made to the decision of the Madras High Court in the case of CIT v. Anaimugan Transports (P.) Ltd. [1995] 215 ITR 553, wherein the court has held that it will be a mistake to accept for all purposes, the return as one filed by the assessee under sub-section (1) of section 139 of the Act as the starting point of limitation for the completion of assessment as a return, which is not complete in all respects and that as regards the return furnished by the assessee, doubts exist whether a return filed under sub-section (4)(a) of section 139 may be the relevant return and in case any omission in the return furnished is discovered by the assessee and a revised return is filed, the same may be the relevant return. The court held that in section 153, in this behalf, a mention of section 143 clearly reckons a return on which assessment is made and a demand notice is issued under clause (a) of sub-section (2) of section 143 of the Act. A return for this purpose is a return under section 139(1), section 139(4) as well as section 139(5) of the Act. An assessment in terms of section 143, it is obvious, is an asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, if the date on which the defects in the original return came to be removed under section 139(9) of the Act viz., 07.07.2017 is to be taken into consideration for the purpose of computing the period of limitation, the impugned notice can be said to have been issued will within the period of limitation. The question that therefore, arises for consideration is as to which of the above two dates can be said to be the date on which the petitioner filed its return on income. 9. In this regard, it may be germane to refer to the provisions of section 139 of the Act, which to the extent the same is relevant for the present purpose, reads as under: 139. Return of income - (1) Every person,- (a) being a company or a firm; or (b) being a person other than a company or a firm, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ** ** (9) Where the Assessing Officer considers that the return of income 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: 10. A study of the provisions of section 139 of the Act shows that under sub-section (1) thereof, an assessee is required to file return on or before the due date. As to which is the due date for filing of return has been provided under Explanation 2 to sub-section (1) of section 139 of the Act. Sub-section (3) of section 139 contemplates filing of a return of income by any person who has sustained a loss in any previous ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 139 of the Act, the same does not require any return to be filed by the assessee. All that the section says is that the assessee is required to be given an opportunity to rectify the defect in the return filed by him within the time provided; failing which such return would be treated as an invalid return. Unlike sub-section (5) of section 139 of the Act which requires an assessee to file a revised return of income in case of any omission or wrong statement in the return of income filed under sub-section (1) thereof, sub-section (9) of section 139 of the Act, does not require an assessee to file a fresh return of income, but requires the assessee to remove the defects in the original return of income filed by him within the time provided therein. Once the defects in the original return of income are removed, such return would be processed further under the Act. In case such defects are not removed within the time allowed, such return of income would be treated as an invalid return. 13. In view of what is discussed hereinabove, the contention that the return under sub-section (9) of section 139 of the Act was filed by the petitioner on 07.07.2017, and that it was thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, but has merely removed the defects in the original return, which is termed as a corrected return in the notice under sub-section (9) of section 139 of the Act. 16. It may be noted that there is no concept of corrected return of income under the Act. Therefore, in effect and substance, what the notice under sub-section (9) of section 139 of the Act does is to call upon the petitioner to remove the defects pointed out therein. Therefore, mere reference to the expression corrected income in the notice under sub-section (9) of section 139 of the Act does not mean that a fresh return of income has been filed under that sub-section. Thus, under sub-section (9) of section 139 of the Act, it is only the original return which gets corrected and no new return is filed. In other words, the original return which was defective when it was filed is rectified upon removal of the defects under sub-section (9) of section 139 of the Act and becomes a valid return. Thus, as held by the Bombay High Court in the decisions cited by the learned counsel for the petitioner as referred to hereinabove, the action of removal of the defects would relate back to the filing of the original return of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub-section shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished. 19. On a plain reading of sub-section (2) of section 143 of the Act, it is apparent that the Assessing Officer or the prescribed income-tax authority must issue a notice under that sub-section only in those cases where a return has been made under section 139 or in response to a notice issued under section 142(1), if he considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, but such notice must be served within a period of six months from the end of the financial year in which such return is furnished. Thus, if, after furnishing a return of income, the assessee does not receive a notice under sub-section (2) of section 143 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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