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TMI Blog2020 (2) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... work. For the assessment under dispute, the assessee filed its return of income on 27th September 2013 declaring loss of Rs. 68,58,22,875. Subsequently, the assessee filed a revised return of income on 31st March 2014, declaring current year loss of Rs. 47,73,22,997. The assessment in case of the assessee was competed under section 143(3) of the Act vide order dated 21st December 2016, accepting the current year loss of Rs. 47,73,22,997, as shown in the revised return of income. After completion of the assessment as aforesaid, learned CIT called for the assessment records for examination. On verifying the records, he observed, though, the assessee filed the original return of income within the due date provided under section 139(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nies/entities requiring tax audit have to file the return of income before the due date prescribed under section 139(1) of the Act. Unless the return of income is filed before the due date under section 139(1) of the Act, the assessee would lose the right to carry forward the losses incurred to subsequent years. He observed, in course of assessment proceeding the Assessing Officer has not at all examined whether the assessee is eligible to carry forward the loss before allowing it. Referring to Explanation 2 of section 263 of the Act as well as certain judicial precedents, learned CIT held that the Assessing Officer having not examined the issue relating to assessee's eligibility to carry forward loss, the assessment order is erroneous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case, admittedly, the assessee has filed the original return of income within the due date prescribed under section 139(1) of the Act. He submitted, along with the revised return of income filed under section 139(5) of the Act, the assessee had furnished audit report as required under section 44AB of the Act. Therefore, the defect in the original return of income stood removed on filing of the audit report along with the revised return of income. Thus, he submitted, assessee's claim of carry forward of loss has to be allowed as per section 139(3) r/w section 80 of the Act. He submitted, the Assessing Officer having taken note of the original return of income as well as the revised return of income filed by the assessee along ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce the original return of income filed by the assessee was defective, it cannot be treated as a valid return of income. Hence, the assessee is not eligible for carry forward of business loss. He submitted, while completing the assessment, the Assessing Officer overlooking this aspect has allowed carry forward of loss. That being the case, the assessment order being erroneous and prejudicial to the interest of Revenue, learned CIT has rightly exercised power under section 263 of the Act to revise the assessment order. 5. We have considered rival submissions and perused the material on record. We have also applied our mind to the decisions relied upon. Insofar as the factual aspect of the issue is concerned, there is no dispute that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of the present case the assessee did not furnish the audit report within the date prescribed under section 139(1) of the Act. A reading of section 139(9) of the Act makes it clear that non filing of audit report along with return of income within the due date under section 139(1) of the Act is one of the causes for which the return of income has to be considered as defective. Further, as per section 139(9) of the Act, the defective return of income is to be treated as invalid, unless, the assessee removes the defect within the time provided by the Assessing Officer. However, on a reading of section 139(9) of the Act it becomes clear that the Assessing Officer unilaterally cannot declare a defective return of income invalid without pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer issuing a defect notice now in terms of section 139(9) of the Act for non filing of audit report. Therefore, exercise of power under section 263 of the Act to revise the assessment order simply for the purpose of going through the process of complying with the provisions of section 139(9) of the Act, in our view, is a futile exercise. In any case of the matter, non-filing of the audit report along with the original return of income is a technical error which is subject to rectification in terms of section 139(9) of the Act. Since, the defect has already been rectified, there is no purpose of again restoring the issue to the Assessing Officer for fresh adjudication considering the fact that the only issue on which the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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