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2022 (9) TMI 965 - Income Tax
Set off of brought forward loss - Removal of defects in the original return - determination of date of filing of ITR - Adjustment of long term capital gain against B/F assessed long term loss - notice u/s 139(9) of the Act was issued to the assessee to rectify the defects in the return filed therein - HELD THAT:- Undisputed fact a notice u/s. 139(9) of the Act was issued to the assessee wherein assessee was called upon to remove the defects in the return of income filed u/s.139(1) - Consequent to the notice u/s. 139(9) of the Act, assessee corrected the defects in the original return of income by filing the revised return, within the prescribed period stated in the notice u/s. 139(9) of the Act.
Sub Section (9) of Section 139 of the Act is attracted when the AO considers the return of income filed by the assessee to be defective. If the AO considers the return of income to be defective, he is required to intimate such defects to the assessee and give him an opportunity to rectify such defect within a period of 15 days from the date of such intimation or within such further time as granted by the AO. If the defects are not removed within 15 days or such extended time granted by AO, then the return of income shall be treated as invalid return and the provisions of the Act would apply as if the assessee has failed to furnish his return of income. Once the defects which existed into original return of income are removed within 15 days or such extended time granted by AO, the original return upon removal of defects u/s. 139(9) of the Act becomes a valid return.
Once the defects in the original return of income have been removed, then seen in the light of the ratio of Hon'ble Bombay High Court decision [2009 (4) TMI 108 - BOMBAY HIGH COURT] it would relate back to the original date of filing of return of income, which was within the prescribed time and therefore the benefits of filing the return of income u/s. 139(1) of the Act shall follow. In such a situation, I am of the view that the CPC and CIT(A) was not justified in denying the benefit of setting of brought forward losses of A.Y. 2016-17 while computing the total taxable income for A.Y. 2017-18.
We direct that the benefit of carry forward of losses of A.Y. 2016-17 be allowed for set off against the income for A.Y. 2017-18 to the assessee. Thus the ground of assessee is allowed.