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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 ..... d accordingly, the time limit for removal of the defects under section 139(9) of the Act stood extended till 20.07.2017. The petitioner removed the defects on 07.07.2017 within the time granted. 3. Subsequently, the return was processed under sub-section (1) of section 143 of the Act on 12.08.2017, wherein the date of original return is shown to be 10.09.2016. Thereafter, the impugned notice under section 143(2) of the Act came to be issued on 09.08.2018, informing the petitioner that the return of income filed by it for assessment year 2016-17 on 07.07.2017 has been selected for scrutiny calling upon the petitioner to produce any evidence on which it may rely in support of its return of income, which has given rise to the present petition. 4. Mr. Darshan Patel, learned advocate for the petitioner, assailed the impugned notice under section 143(2) of the Act by submitting that the notice is barred by limitation as the same has been issued beyond the permissible time limit, as provided under section 143(2) of the Act. It was pointed out that in this case, the original return under sub-section (1) of section 139 of the Act was filed on 10.09.2016 and that thereafter, the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 139(9) of the Act, that in the intimation under section 143(1) of the Act, the return has been treated as a valid return under section 139(1) of the Act with effect from 10.09.2016. It was further submitted that the notice under section 139(9) of the Act categorically states that an opportunity has been given to the assessee only to remove the specified defects in the original return as mentioned in the notice itself and that the assessee has not been allowed to make any further modifications while furnishing the return under section 139(9) of the Act except to remove the specified defects identified and mentioned in the notice itself. Therefore, the return filed to remove the defects under section 139(9) of the Act would be a corrected return and would relate back to the date of filing of the original return. 4.4 It was further submitted that it is a well settled proposition of law that the notice under section 143(2) of the Act is a statutory notice and has to be mandatorily issued as per law for assuming jurisdiction for assessment by the Assessing Officer and that in the absence of a notice under section 143(2) of the Act being issued within the prescribed time limit, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een days of receipt of the intimation. A reminder was again sent to the petitioner on 05.07.2018, granting extension of fifteen days to comply with the notice under section 139(9) of the Act. It was submitted that after making corrections and removing the defects, the return under section 139(9) of the Act was filed by the petitioner on 07.07.2017, whereafter it was selected for scrutiny. Thus, it was the corrected return and not the defective return filed on 10.09.2016 which was selected for scrutiny. It was submitted that the return filed under section 139(1) of the Act on 10.09.2016 was a defective return and a return with defects is not a valid return under the Act. Therefore, the date of filing of the defective return cannot be taken into consideration for the purpose of computing the limitation for issuance of notice under section 143(2) of the Act. According to the learned senior standing counsel, once the defects have been removed within the prescribed time limit, a fresh return has to be filed under section 139(9) of the Act, which is considered to be a valid return. Accordingly when the time limit for issuance of notice under section 143(2) of the Act was available till t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revised return is filed, the original return must be taken to have been withdrawn and substituted by a fresh return for the purpose of assessment. 5.3 The learned senior standing counsel submitted that considering the defects enumerated in the Explanation, it is not possible to make an assessment unless such defects are removed. 5.4 Reliance was placed also upon the decision of this court in the case of Hytaisun Magnetics Ltd. v. Jt. CIT [2018] 95 taxmann.com 248/258 Taxman 264 wherein the court held thus: "Section 139 of the Act pertains to return of income. Sub-section (9) of section 139 provides that where the Assessing Officer considers that the return of income filed 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, on an application made in this behalf, the Assessing Officer may grant; if such defect is not rectified within such period or extended period, then notwithstanding anything contained in any other provision of the Act, the return shall be treated as an invalid return. Proviso to sub-section (9) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, the return filed by the petitioner in response to the notice under section 139(9) of the Act should be treated to be akin to a revised return. It was, accordingly, urged that the petitioner having filed the correct return in response to the notice under section 139(9) of the Act on 07.07.2017, the impugned notice dated 09.08.2018 is well within the period of limitation prescribed under section 143(2) of the Act and that the petition, being devoid of merits, deserves to be dismissed. 6. In the backdrop of the facts and contentions noted hereinabove, the sole question that arises for consideration in this case is as to whether the impugned notice under sub-section (2) of section 143 of the Act has been filed within the period of limitation provided thereunder. 7. In this case, the original return of income under sub-section (1) of section 139 of the Act came to be filed on 10.09.2016. Intimation under sub-section (9) of section 139 of the Act came to be issued on 17.06.2017, calling upon the petitioner to remove the defects enumerated therein. Thereafter, on 05.07.2017, a reminder was given and the time to comply with the notice under section 139(9) of the Act was extended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment year; (aa) in the case of an assessee who is required to furnish a report referred to in section 92-E, the 30th day of November of the assessment year; (b) in the case of a person other than a company, referred to in the first proviso to this sub-section, the 31st day of October of the assessment year; (c) in the case of any other assessee, the 31st day of July of the assessment year; ** ** ** (3) If any person, who has sustained a loss in any previous year under the head "Profits and gains of business or profession" or under the head "Capital gains" and claims that the loss or any part thereof should be carried forward under sub-section (1) of Section 72, or sub-section (2) of Section 73 or sub-section (2) of section 73-A, or sub- section (1) or sub-section (3) of section 74 or sub-section (3) of section 74-A, he may furnish, within the time allowed under sub- section (1) a return of loss in the prescribed form and verified in the prescribed manner and containing such other particulars as may be prescribed, and all the provisions of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction (1) of section 142, discovers any omission or wrong statement in such return, he can furnish a revised return within the time provided therein. Thus, sub-section (1) of section 139 of the Act contemplates filing of a return of income, sub-section (3) also contemplates filing of a return of income to which all the provisions of the Act apply as if it were a return filed under sub-section (1) and sub-section (5) provides for filing of a revised return where there is any omission or wrong statement in the original return of income filed under sub-section (1). Therefore, all these sub-sections clearly envisage filing of a return. 11. Sub-section (9) of section 139 of the Act is attracted when the Assessing Officer considers the return on income filed by the assessee to be defective. If the Assessing Officer considers the return of income to be defective, he is required to intimate such defect to the assessee and give him an opportunity to rectify such defect within a period of fifteen days from the date of such intimation or within such further time, which the Assessing Officer in his discretion allows on an application made by the assessee in this behalf. If the defects are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s sub-section (9) of section 139 of the Act, does not contemplate filing of a return of income. As noticed hereinabove, it is the original return filed by the assessee which gets rectified upon the removal of the defects contained therein. 14. At this juncture, it may be germane to refer to the notice issued under sub-section (9) of section 139 of the Act, the relevant part whereof has been extracted in the objection raised by the petitioner to the notice under section 143(2) of the Act. In the said notice, the petitioner has been told to inter alia note the following: "1. Please ensure no other information is changed apart from those errors listed below in Part-A, in case of any other changes in data, the return of income filed by you is liable to be treated as an invalid return. 2.While correcting the above mentioned defects, if any changes are being made, leading to change of income and/or taxation under other heads of income, you should file a revised return (and not a corrected return) as per the provisions of Income Tax Act, 1961. 3. to 6. ** ** ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el (supra), on which reliance has been placed by the learned senior standing counsel for the respondents, wherein this court has placed reliance upon a decision of the Allahabad High Court in case of Dhampur Sugar Mills v. CIT [1973] 90 ITR 236, wherein it has been held that there is a clear distinction between revised return and a correction of return. Once a revised return is filed, the original return must be taken to have been withdrawn and substituted by a fresh return for the purpose of assessment. Thus, when a revised return is filed under section 139(5) of the Act, the original return gets substituted and it is the revised return which is to be considered as a return for the purpose of assessment. However, the court has clearly drawn a distinction between a revised return and a correction of return. Adverting to the facts of the present case, this case relates to correction of the return of income originally filed and not a revised return. Had it been a case of filing of a revised return of income, the original return of income would have stood substituted by the revised return, but when it comes to correction of a return of income, it is only the original return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act that the Assessing Officer can proceed further under sub-section (3) thereof to make an assessment order. Therefore, the notice under section 143(2) of the Act is a statutory notice, upon issuance of which, the Assessing Officer assumes jurisdiction to frame the scrutiny assessment under sub-section (3) of section 143 of the Act. Consequently, if such notice is not issued within the period specified in sub-section (2) of section 143 of the Act viz. before the expiry of six months from the end of the financial year in which the return is furnished, it is not permissible for the Assessing Officer to proceed further with the assessment. 20. In the facts of the present case, as discussed earlier, the petitioner filed its return of income under sub-section (1) of section 139 of the Act on 10.09.2016. Since the return was defective, the petitioner was called upon to remove such defects, which came to be removed on 07.07.2017, that is, within the time allowed by the Assessing Officer. Therefore, upon such defects 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 unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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