TMI Blog2019 (10) TMI 1583X X X X Extracts X X X X X X X X Extracts X X X X ..... he original return, that is, 29.11.2016 and consequently, the limitation for issuance of notice under subsection (2) of section 143 would be 30.09.2017, viz. six months from the end of the financial year in which the return under subsection (1) of section 139 came to be filed. In the present case, it is an admitted position that the impugned notice under subsection (2) of section 143 of the Act has been issued on 11.08.2018, which is much beyond the period of limitation for issuance of such notice as envisaged under that subsection. The impugned notice, therefore, is clearly barred by limitation and cannot be sustained. Assessee appeal allowed. - HONOURABLE MS.JUSTICE HARSHA DEVANI AND HONOURABLE MS. JUSTICE SANGEETA K. VISHEN For the Appellant : Darshan R Patel For the Respondent : Mrs Mauna M Bhatt ORAL JUDGMENT (PER : HONOURABLE MS.JUSTICE HARSHA DEVANI) 1. By this petition under articles 226 and 227 of the Constitution of India, the petitioner has challenged the notice dated 11.08.2018 issued under subsection (2) of section 143 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) and the proceedings initiated pursuant thereto. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn is not ipso facto to be regarded as an invalid return and that it is only when a return contains any specified defects and the Assessing Officer, in his discretion, intimates the defects to the assessee and the assessee fails to rectify the same within the specified time, that the Assessing Officer may treat the return to be invalid. Therefore, it is only if the defect is not removed within the time period allowed or within the extended time period that the return can be treated as an invalid return. It was submitted that therefore, it is the date of filing of the original return under section 139(1) of the Act which is required to be reckoned for the purpose of calculating the time limit for issuance of notice under section 143(2) of the Act. 4.2 It was further submitted that the return filed in response to the notice under section 139(9) of the Act is not a fresh return, but is in continuation of the original return rectifying the specified defects, as per the notice issued under section 139(9) of the Act. It was submitted that when the provisions of section 139(9) of the Act provide an opportunity to the assessee to remove any defect/s in the original return filed and if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .6 Reliance was also placed upon an unreported decision of the Bombay High Court in the case of Atul Projects India Private Limited v. Union of India and another rendered on 24.01.2019 in Writ Petition No.3501 of 2018, wherein the court placed reliance upon its earlier decision in the case of Prime Securities Limited (supra) and held that the date of filing of return would be the date on which it was originally presented and not on the date on which the defects were removed. 4.7 Reference was made to the decision of the Delhi High Court in case of Bharat Nidhi Ltd. v. Commissioner of Income-tax, [2007] 165 Taxman 314 (Delhi), wherein the court has held that upon the defects being removed, the return would relate back to the original filing date. 4.8 It was, accordingly, urged that the impugned notice, being barred by limitation, deserves to be quashed and set aside and the petition deserves to be allowed in the terms of the reliefs prayed for. 5. Opposing the petition, Mrs. Mauna Bhatt, learned senior standing counsel for the respondent, submitted that the return filed by the petitioner for assessment year 201617 under section 139(9) of the Act on 19.07.2017 was selected f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e court was invited to the provisions of section 143 of the Act to point out that subsection (2) thereof refers to a return furnished under section 139 or in response to a notice under section 142(1) of the Act. It was submitted that section 143(2) of the Act does not state that such return is required to be furnished under section 139(1) of the Act and hence, the period of limitation does not have to be computed from the date on which the return is filed under section 139(1) of the Act. It was submitted that in the facts of the present case, it is only on the date when the corrected return came to be filed under section 139(9) of the Act that the return could be considered to be valid and hence, in terms of section 143(2) of the Act, the period of limitation would have to be calculated from the date when such corrected return was filed under section 139(9) of the Act. 5.2 In support of her submissions, the learned senior standing counsel placed reliance upon a decision of this Court in case of Principal Commissioner of Income-tax-1 v. Babubhai Ramanbhai Patel, [2017] 249 Taxman 470 (Gujarat), wherein the court has held that in terms, subsection (5) of section 139 allows the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Roller Flour Mills v. Commissioner of Income-tax, 2008 (301) ITR 1. 5.6 Reference was made to the decision of the Madras High Court in the case of Commissioner of Income-tax v. Anaimugan Transports (P.) Ltd., [1995] 129 CTR 51 (Madras), wherein the court has held that it will be a mistake to accept for all purposes, the return as one filed by the assessee under subsection (1) of section 139 of the Act as the starting point of limitation for the completion of assessment as a return, which is not complete in all respects and that as regards the return furnished by the assessee, doubts exist whether a return filed under subsection (4)(a) of section 139 may be the relevant return and in case any omission in the return furnished is discovered by the assessee and a revised return is filed, the same may be the relevant return. The court held that in section 153, in this behalf, a mention of section 143 clearly reckons a return on which assessment is made and a demand notice is issued under clause (a) of subsection (2) of section 143 of the Act. A return for this purpose is a return under section 139(1), section 139(4) as well as section 139(5) of the Act. An assessment in terms of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be issued on 11.08.2018. 8. In the present case, there is some dispute with regard to the date of removal of defects in terms of the intimation under subsection (9) of section 139 of the Act. While the petitioner contends that the defects were removed on 02.02.2017, it appears to be the case of the respondent that the petitioner had suo motu filed another return under subsection (9) of section 139 of the Act on 19.07.2017, which according to him is required to be considered to be the date of filing of the return of income. Since nothing much turns upon the date of actual removal of the defects, the date of removal of defects is referred to as 19.07.2017. 9. Undisputedly, if the date of the original return under subsection (1) of section 139 of the Act, viz.29.11.2016 is required to be taken into consideration for the purpose of computing the limitation under section 143(2) of the Act, the impugned notice would be barred by limitation. However, if the date on which the defects in the original return came to be removed under section 139(9) of the Act viz., 19.07.2017 is to be taken into consideration for the purpose of computing the period of limitation, the impugned notice can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time allowed under subsection (1) a return of loss in the prescribed form and verified in the prescribed manner and containing such other particulars as may be prescribed, and all the provisions of this Act shall apply as if it were a return under subsection (1). (4) Any person who has not furnished a return within the time allowed to him under subsection (1), may furnish the return for any previous year at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. (5) If any person, having furnished a return under subsection (1) or subsection (4), discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. Xxxxx (9) Where the Assessing Officer considers that the return of income furnished by the assessee is defective, he may intimate the defect to the assessee and give him an opportunity to rectify the defect within a period of fifteen days from the date of such intimation or within such further period which, on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion allows on an application made by the assessee in this behalf. If the defects are not removed within fifteen days or within such further period granted by the Assessing Officer, then notwithstanding anything contained in any other provision of the Act, the return shall be treated as an invalid return and the provisions of the Act would apply as if the assessee has failed to furnish his return. Thus, if the defects are removed within fifteen days or within the further time granted by the Assessing Officer, the very same return would be considered to be valid. 13. If one looks at the language employed in subsections (1), (3) and (5) of section 139 of the Act, a common thread in all the subsections is that the assessee is required to file a return of income under those subsections. However, from the language employed in subsection (9) of section 139 of the Act, the same does not require any return to be filed by the assessee. All that the subsection says is that the assessee is required to be given an opportunity to rectify the defect in the return filed by him within the time provided; failing which such return would be treated as an invalid return. Unlike subsection (5) of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his court in case of Principal Commissioner of Income tax-1 v. Babubhai Ramanbhai Patel (supra), on which reliance has been placed by the learned senior standing counsel for the respondents, wherein this court has placed reliance upon a decision of the Allahabad High Court in case of Dhampur Sugar Mills v. CIT, [1973] 90 ITR 236, wherein it has been held that there is a clear distinction between revised return and a correction of return. Once a revised return is filed, the original return must be taken to have been withdrawn and substituted by a fresh return for the purpose of assessment. Thus, when a revised return is filed under section 139(5) of the Act, the original return gets substituted and it is the revised return which is to be considered as a return for the purpose of assessment. However, the court has clearly drawn a distinction between a revised return and a correction of return. Adverting to the facts of the present case, this case relates to correction of the return of income originally filed and not a revised return. Had it been a case of filing of a revised return of income, the original return of income would have stood substituted by the revised return, but when i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer can proceed further under subsection (3) thereof to make an assessment order. Therefore, the notice under section 143(2) of the Act is a statutory notice, upon issuance of which, the Assessing Officer assumes jurisdiction to frame the scrutiny assessment under subsection (3) of section 143 of the Act. Consequently, if such notice is not issued within the period specified in subsection (2) of section 143 of the Act viz. before the expiry of six months from the end of the financial year in which the return is furnished, it is not permissible for the Assessing Officer to proceed further with the assessment. 19. In the facts of the present case, as discussed earlier, the petitioner filed its return of income under subsection (1) of section 139 of the Act on 29.11.2016. Since the return was defective, the petitioner was called upon to remove such defects, which came to be removed on 19.07.2017, that is, within the time allowed by the Assessing Officer. Therefore, upon such defects being removed, the return would relate back to the date of filing of the original return, that is, 29.11.2016 and consequently, the limitation for issuance of notice under subsection (2) of section 143 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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