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TMI Blog2019 (10) TMI 1583X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived an intimation regarding nonacceptance of response of defective return on 10.07.2017, wherein the petitioner was asked to correct the defects within a period of fifteen days from the receipt of said notice. The petitioner filed its reply to the nonacceptance of response of defective return through e-portal on 19.07.2017. 3. Subsequently, the return was processed under subsection (1) of section 143 of the Act on 25.08.2017, wherein the date of original return is referred to as 29.11.2016. Thereafter, the impugned notice under subsection (2) of section 143 of the Act came to be issued to the petitioner on 11.08.2018, 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 subsection (1) of section 139 of the Act was filed on 29.11.2016 and that thereafter, the petitioner was called upon to remove the defects under subsection (9) of section 139 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, the return has been treated as a valid return under section 139(1) of the Act with effect from 29.11.2016. 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 entire assessment proceedings would be rendered without jurisdiction. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fects within fifteen days of receipt of the intimation. On 02.02.2017, the petitioner filed return under subsection (9) of section 139 of the Act electronically and while this return was being processed, the petitioner suo motu filed another return on income under subsection (9) of section 139 on 19.07.2017. It was submitted thus that after making corrections and removing the defects, the return under section 139(9) of the Act was ultimately filed by the petitioner on 19.07.2017, whereafter it was selected for scrutiny. Thus, it was the corrected return and not the defective return filed on 29.11.2016 which was selected for scrutiny. It was submitted that the return filed under section 139(1) of the Act on 29.11.2016 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 consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... although it may be used to indicate the conduct of the assessee. There is a clear distinction between a 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. 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. Joint Commissioner of Income-tax, [2018] 95 taxmann.com 248 (Gujarat) wherein the court held thus: "Section 139 of the Act pertains to return of income. Subsection (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e default of the assessee, which is contemplated under section 144 of the Act. 5.7 It was submitted that therefore, for the purpose of computing the limitation for issuance of notice under section 143(2) of 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 19.07.2017, the impugned notice dated 11.08.2018 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 subsection (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 subsection (1) of section 139 of the Act came to be filed on 29.11.2016. Intimation under subsection (9) of section 139 of the Act came to be issued on 25.01.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 manner and setting forth such other particulars as may be prescribed: xxxxxxx Explanation 2.In this subsection, "due date" means,( a) where the assessee other than an assessee referred to in clause (aa)] is (i) a company; (ii) a person (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force; or (iii) a working partner of a firm whose accounts are required to be audited under this Act or under any other law for the time being in force, the 30th day of September of the assessment year; (aa) in the case of an assessee who is required to furnish a report referred to in section 92E, the 30th day of November of the assessment year; (b) in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 subsection (1) of section 139 of the Act. Subsection (3) of section 139 contemplates filing of a return of income by any person who has sustained a loss in any previous year as provided thereunder, and further provides that all the provisions of the Act shall apply as if it were a return filed under subsection (1). Therefore, a return filed under subsection (3) of section 139 of the Act is treated as a return under subsection (1) thereof. Subsection (5) of section 139 of the Act provides that if a person who has filed a return under subsection (1) or in pursuance of a notice under subsection (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, subsection (1) of section 139 of the Act contemplates filing of a return of income, subsection (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 subsection (1) and subsection (5) provides for filing of a revised re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defects are not removed within the time allowed, such return of income would be treated as an invalid return. 14. In view of what is discussed hereinabove, the contention that the return under subsection (9) of section 139 of the Act was filed by the petitioner on 19.07.2017, and that it was this return which was selected for scrutiny under the CASS system in August 2018 and not the defective return filed on 29.11.2016, does not merit acceptance. While the impugned notice under subsection (2) of section 143 of the Act does say that the return filed by the petitioner on 19.07.2017 has been selected for scrutiny, in the opinion of this court, the reference to the return as the return filed on 19.07.2017 is incorrect, inasmuch as subsection (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. 15. Under subsection (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a notice under subsection (1) of section 142, the Assessing Officer or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not underpaid the tax in any manner, shall serve on the 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 subsection 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." 18. On a plain reading of subsection (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 subsection 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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