TMI Blog2003 (3) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be travesty of justice. - Accordingly, the petition is allowed. - - - - - Dated:- 4-3-2003 - Judge(s) : V. C. DAGA., J. P. DEVADHAR. JUDGMENT The judgment of the court was delivered by J.P. Devadhar J. - The short question raised in this petition is, whether the authorities under the Income-tax Act, 1961, were justified in treating the revised return for the assessment year 1991-92 and the original return for the year 1992-93 as invalid under section 139(9) of the Income-tax Act. Although, the writ petition pertains to the assessment years 1991-92 and 1992-93, Mr. Pardiwala, learned counsel appearing on behalf of the petitioner, fairly stated that after treating the revised return for the assessment year 1991-92 as invalid, the Assessing Officer has passed the assessment order under section 143(3) of the Income-tax Act (the "I.T. Act", for short), and the appeal filed against the said assessment order is pending. He submitted that the petitioner is willing to pursue the appellate remedy for the assessment year 1991-92, however, it may be clarified that the petitioner is entitled to raise all contentions before the appellate authority. In the present case, the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... report of M/s. S.R. Batliboi and Co. was also filed. On February 11, 1993, the Deputy Commissioner of Income-tax, Special Range-I, Pune (hereinafter referred to as "the Assessing Officer"), issued a notice under section 139(9) of the Income-tax Act proposing to treat the return for the assessment year 1992-93 as invalid if the defects in the return mentioned therein were not removed within 15 days from the receipt of the said letter. According to the Assessing Officer, the return was defective in terms of clause (e) of the Explanation to section 139(9) of the Income-tax Act. In other words, according to the Assessing Officer, the profit and loss account and the audited balance-sheet submitted along with the returns could not be treated as valid in view of the material differences as a result of the special audit. On March 31,1993, the petitioner through their chartered accountants filed a reply to the said notice stating therein (a) that the profit and loss account and the balance-sheet adopted at the annual general meetings were valid, (b) that as per the views expressed by the Department of Company Affairs the petitioner could not reopen and revise its accounts after the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pport of any claim though not made in the original return and adduce evidence before the Assessing Officer. The reference application filed by the petitioner against the said order is pending before the Income-tax Appellate Tribunal. In the meantime the present petition has been filed challenging the aforesaid orders passed by the authorities below. The writ petition was admitted by this court on June 15, 1998, without any interim relief. In the ordinary course, we would not have heard this writ petition on the merits in view of the pending reference application. However, in the present case, on the one hand both the authorities below have held that no appeal is maintainable against the intimation under section 139(9) of the Income-tax Act and, on the other hand, after treating the return as invalid, the Assessing Officer has not framed the assessment within the time stipulated under the Act. As a result whereof, the assessee is left with no remedy after the return is treated as invalid under section 139(9) of the Income-tax Act. Moreover, counsel for the petitioner opted to withdraw the reference application and pursue the remedy of writ. In these circumstances, we are of the op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have considered favourably the petitioner's explanation that it was not possible to reopen the accounts once they were adopted at the annual general meeting of the shareholders in terms of section 210 of the Companies Act. He submitted that even assuming there was a difference in the profit shown in the audited balance-sheet and the profit and loss account and the computation of income, the same was rectified by passing the necessary entries in the accounts for the year ended March 31, 1993. The said difference in no event could be regarded as a defect in the return filed under section 139(9) of the Income-tax Act. Mr. Pardiwala further submitted that section 139(9) contemplates passing of an order and, therefore, the Tribunal was not justified in holding that once a defect intimated to an assessee is not cured within the time specified, the return would automatically become invalid. It was submitted that if the view of the Tribunal is accepted then whatever be the submissions made by an assessee as to why there is no defect in its return, the Assessing Officer would be perfectly justified in ignoring the same as being invalid. Accordingly, it was submitted that the orders passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to make an assessment on the basis that no return was filed. If the defects pointed out by g the Assessing Officer are other than those defects set out in clauses (a) to (e) of the Explanation to section 139(9), then the question of invalidating the return under section 139(9) does not arise at all. In other words, even if the return contains several defects, it is only when the assessee fails to cure or rectify any of the defects set out in clauses (a) to (f) of the Explanation to section 139(9) within the stipulated time, that the said return can be treated as invalid return. Therefore, what we have to consider in the present petition is, whether the return filed by the assessee contained the defects set out in clause (e) of the Explanation to section 139(9) and whether the petitioner has failed to cure or rectify the same within the stipulated time. Clause (e) of the Explanation to section 139(9) of the Income-tax Act provides that where the accounts of the assessee have been audited, the return should be accompanied by copies of the audited profit and loss account and balance-sheet and the auditor's report. Where the audit is not completed, Instruction No. 1348, dated Augus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndated by section 44AB of the Act. The assessee had not rectified the defect within the stipulated time and had not sought extension of time either before the Assessing Officer or before the revisional authority and for the first time before the High Court extension of time was sought. In that context, it was held by the Gujarat High Court that the order holding the return invalid cannot be interfered with in writ jurisdiction. In the present case, the audit report was filed with the return and there is no defect contemplated in clause (e) of the Explanation to section 139(9) of the Income-tax Act. Therefore, the aforesaid decision of the Gujarat High Court does not support the contention of the Revenue. In the circumstances, we set aside the intimation of the Assessing Officer dated March 30, 1993, treating the return filed by the petitioner on December 30, 1992, for the assessment year 1992-93 as an invalid return. Consequently, the orders passed by the appellate authorities do not survive. The Assessing Officer is directed to finalise the assessment for the assessment year 1992-93 in accordance with law on the basis of the return filed by the assessee on December 30, 1992, wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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