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TMI Blog2023 (8) TMI 958X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee was a valid appeal and there was no reason to dismiss the same as non-maintainable. 3) The learned CIT(A) erred in not appreciating that the order passed u/s 139(9) treating the return filed by the assessee as an invalid return was incorrect in law and accordingly, the appeal of the assessee should have been allowed. 4) The assessee submits that his gross receipts from his business were less than Rs.1 Cr. and therefore, the assessee was no liable to get his books audited u/s 44AB and hence, the return filed by the assessee was valid one and there was no reason to treat the same as an invalid return u/s 139(9). 5) The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal." 3. It is clear from a perusal of the assessee's grounds that the CIT(A) has refused to admit his lower appeal for the sole reason of not being maintainable u/ sec. 246A of the Act. The "NFAC" quotes the CPC's order dated 31.07.2019 treating the assessee's return in question as a "defective" one u/ sec. 139(9) of the Act to hold that it does not constitute an order appealable u/ sec. 246A of the Act as under : 4. Mr. Pathak vehemently argued during the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted at source on such an amount would call for refund without the corresponding inclusion of the amount in the total income. 6. The third reason given by the assessee is the reversal of some entries. For example, the assessee raised invoice of 100 USD on the Indian entity, which deducted tax at source on 100 USD. However, later on the assessee issued credit note on that invoice, say, to the tune of 15 USD. Even though the tax was deducted at source initially on 100 USD by the Indian entity, but the ultimate amount includible in the total income of the assessee would be equivalent of 85 USD. 7. On going through the assessee's reply given to the DCIT (CPC), Bengaluru, it emerges that a case was set up that it did not omit to include any income in the total income. Rather, the difference arose either due to conversion of invoice value from the foreign currency into Indian rupees or certain amounts on which tax was deducted by Indian entities, which were not chargeable to tax in its hands by reason of reimbursement or reversal of some invoice value. The three reasons noted above are bound to bring difference in the figure of income reported by the assessee in its return and as app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case has invoked Explanation (a) to section 139(9) of the Act on account of mismatch of the figures of income as returned and as per Form 26AS. Section 139(9) provides in the opening part that: `a return of income shall be regarded as defective unless the following conditions fulfilled'. Then there are clauses (a) to (f). The AO has activated clause (a), which states that: "the annexures, statements and columns in the return of income relating to computation of income chargeable under each head of income, computation of gross total income and total income have been duly filled in". A cursory glance at the Explanation (a) manifests the nature of defect, being, not duly filling in the annexures, statements and columns in the return of income relating to computation of income chargeable under each head of income, computation of gross total income and total income. In other words, if all the annexures, statements and columns etc. of the return have been duly filled in, there can be no defect as per clause (a). The defect referred to herein is of non-filling of the requisite columns of the return of income and not filling of columns but non-tallying of the figures due to a valid differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um makes it explicitly clear that the Parliament wanted to restrict the scope of adjustments and thus excluded the cases of such a mismatch from its ambit. The effect of the third proviso is that such a genuine mismatch will be resolved by taking recourse to assessment u/s 143(3) of the Act by issuing notice u/s 143(2) of the Act. In fact, section 143(2) unambiguously provides that "where a return has been furnished u/s 139 ...., the Assessing Officer ...., if considers it necessary or expedient to ensure that the assessee has not understated the income..., shall serve on the assessee a notice ....". It means that where the assessee claims a particular amount as not chargeable to tax, with which the AO is not prima facie agreeable, as is the case under consideration, the only option with the AO is to take up the assessment after issuing notice u/s 143(2) of the Act. The position of law which prevails from the A.Y. 2018-19, that is, after the insertion of the third proviso to section 143(1)(a), is similar to what it was before the A.Y. 2017-18. Thus except for the A.Y. 2017- 18, when the AO could have made adjustment on account of such a mismatch while processing the return u/s 143( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders given in section 246A of the Act. 13. Bearing in mind the pitiable condition of the assessee descending in a quagmire, having been created by the DCIT (CPC), Bengaluru, the assessee cannot be left remediless. It goes without saying that every piece of legislation ultimately aims at the well being of the society at large. No technicality can be allowed to operate as a speed breaker in the course of dispensation of justice. In the context of taxes, if a particular relief is legitimately due to an assessee, the authorities cannot circumscribe it by creating such circumstances leading to its denial. A look at different clauses of section 246A(1) transpires that an order u/s 139(9) is ex facie not covered therein. However, there are two clauses of section 246A(1), namely, (a) and (i), which can provide succor to the assessee. 14. Clause (a) of section 246A provides for filing an appeal before CIT(A), inter alia, against "an order against the assessee where the assessee denies his liability to be assessed under this Act". It is pertinent to note that such an order has been covered in the provision separately and distinct from an intimation u/s 143(1) or an order of assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sec. 246A not containing any specific clause regarding maintainability of appeal against an order passed u/ sec. 139(9) of the Act. 6. We have given our thoughtful consideration to the foregoing vehement rival arguments and find no merit in assessee's stand. We make it clear first of all that there is no dispute between the parties about the CPC having passed sec. 139(9) order dated 31.07.2019 treating the assessee's corresponding return as a "defective" one since the sole question before us is only that of maintainability of an appeal against the same before the CIT(A) u/ sec. 246A of the Act. We find that sec. 246A is a self-exhaustive provision providing remedy of an appeal against the orders passed by lower authority(ies) in various clauses from (a) to (r) followed by Explanation(s) and statutory proviso(s); as the case may be. Learned counsel could not pin-point any appeal provision therein against sec. 139(9) order. That being the case, we are of the considered opinion that only stricter interpretation in such an instance has to be adopted in light of hon'ble apex court's landmark decision in Commissioner of Customs (Imports), Mumbai vs. M/s. Dilip Kumar And Co. & Ors. [201 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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