TMI Blog2020 (2) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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) in our view, is a futile exercise. 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 Commissioner held the assessment order to be erroneous and prejudicial to the interests of Revenue is inadmissibility of claim of carry forward of loss due to non filing of audit report, which allegedly, made the return of income of income filed under section 139(1) defective. Therefore, in our view, the exercise of power under section 263 of the Act in the present case is without justification, hence, invalid. - Decided in favour of assessee. - IT APPEAL NO. 2711 (MUM.) OF 2019 - - - Dated:- 28-11-2019 - Saktijit Dey, Judicial Member And Manoj Kumar Aggarwal, Accountant Member Satish R. Mody for the Appellant. Ajay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee earning income which falls under the head profits and gains of business and profession or capital gain is mandatorily required to file the return of income before the due date as prescribed under section 139(1) of the Act. He observed, as per section 139(1) of the Act, companies/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 and prejudicial to the interest of revenue. Accordingly, exercising power under section 263 of the Act, he set aside the assessment order with a direction to the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rised Representative relied upon the decision of the Hon'ble Madras High Court in CIT v. Periyar District Co-operative Milk Producers Union Ltd., [2004] 266 ITR 705 (Mad.) and the decision of the Tribunal, Mumbai Bench, in Gilbarco Veeder Root India (P.) Ltd. v. Dy. CIT [IT Appeal no.2695/Mum./2017, dated 7-9-2018. 4. The learned Departmental Representative drawing our attention to the assessment order submitted, the assessment order does not reveal even a semblance of enquiry by the Assessing Officer with regard to the allowability of carry forward of business loss. Drawing our attention to the provision of section 139(9) of the Act, he submitted, as per the condition prescribed therein, a return of income filed without enclosing the audit report, as required under section 44AB, is to be treated as a defective return of income. He submitted, the original return of income filed by the assessee was without the audit report. Therefore, it was a defective return of income. He submitted, for claiming carry forward of loss, the assessee had to file the return of income within the due date prescribed under section 139(3) r/w section 139(1) of the Act. He submitted, since the origi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 providing opportunity to the assessee to remove the defect within specified time limit. In the facts of the present case, it appears that the Assessing Officer has not considered the original return of income defective as no intimation under section 139(9) of the Act was issued to the assessee. The assessee had voluntarily filed a revised return of income claiming loss at a lesser figure and along with the said return of income has furnished the audit report. Therefore, the defect in the original return of income stood removed. That being the case, the original return of income has to be treated as a vali ..... X X X X Extracts X X X X X X X X Extracts X X X X
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