TMI Blog2007 (7) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... T The judgment of the court was delivered by M.M. KUMAR, J. - At the instance of the revenue the Income Tax Appellate Tribunal, Delhi Bench (c), New Delhi (for brevity, 'the Tribunal') has referred the following questions of law under Section 256(1) of the Income-tax Act, 1961 (for brevity, 'the Act'), which are stated to have emerged from its order dated 31.8.1998 passed in I.T.A. No.7023/Del of 1992 and C.O. No. 75/Del of 1995 from, in respect of the assessment year 1989-90:- "1. Whether the Tribunal is justified in holding, on the facts and in the circumstances of the case that the return dated 30.3.1990 had legal efficacy and that notice under section 143(2) should have been issued with reference to it on or before 30.9.1990. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act from the date of filing of return had expired, was not accepted by the Assessing Authority. 3. On appeal, the Commissioner of Income-tax (Appeals) upheld the order passed by the Assistant Commissioner of Income-tax, Investigation Circle, Faridabad. On the issue of limitation as provided by proviso to sub-section (2) of Section 143 of the Act, the Commissioner of Income-tax (Appeals) held that the return of income was deemed to be filed after removal of defects by the assessee on 3.1.1992 and the period of limitation of six months was to be counted from 3.1.1992 when complete and correct return of income was filed. Therefore, the Commissioner of Income-tax (Appeals) rejected the contention raised by the assessee holding that the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been held by the Hon'ble High Court to be a valid return in the sense that it will have to be taken cognizance of for the purpose of charging interest for the duration of the delay etc.. It would not be correct to deem the return as having been filed only on the date when the defects were removed and to start counting legal consequences with reference to the latter date. It was for this reason that the charging of interest by the Commissioner of Income-tax up to the date of filing of the profit and loss account and balance-sheet was held to be erroneous in law. The return filed on 6.10.1971 was "the return" (i.e. a valid return, though defective). Therefore, it had legal efficacy. 18. In the setting of the above proposition, the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , then, notwithstanding anything contained in any other provision of this Act, the return shall be treated as an invalid return and the provisions of this Act shall apply as if the assessee had failed to furnish the return:........... Explanation .- For the purposes of this sub-section, a return of income shall be regarded as defective unless all the following conditions are fulfilled, namely:-................. (b) the return is accompanied by a statement showing the computation of the tax payable on the basis of the return;.......... (d) where regular books of account are maintained by the assessee, the return is accompanied by copies of- (i) manufacturing account, trading account, profit and loss account or, as the case may be, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computation of income etc. are not fulfilled or copies of the audited or otherwise profit or loss account have not been attached as required by clauses (e) and (f) of the explanation. In other words, the statutory provision clearly envisages that in cases where profit and loss account and balance sheets are not accompanying the return of income, it would be regarded as defective in contradistinction to invalid return. A defective return, therefore, cannot be regarded as invalid return ipso facto. It may assume the character of invalid return if the defect after due notice has not been removed by the assessee. The question is not res integra and fell for consideration of a Division Bench of Calcutta High Court in the case of CIT v. Bharat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve in contra-distinction to be invalid must be regarded as a question of fact. Moreover, the absence of profit and loss account and balance sheet from the return is itself has been considered by clause (e) of explanation appended to Subsection (9) of Section 139 of the Act. Therefore, it cannot be concluded that the return, in fact, was filed on the day when the defect was removed i.e. on 3.1.1992. The date of filing the return would not change a fortiori. It follows that period of limitation for issuance of notice under Section 143(2) of the Act could be issued only within a period of six months (as prevailing at the relevant time i.e. assessment year 1989-90). 7. In view of the above, both the questions are answered against the revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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