Assessment – Notice u/s 143(2) of ITA, 1961 – Limitation – Defective return – Rectification of defects – Relates back to date of original return – Time limit for issue of notice u/s 143(2) – Not from date of rectification of defects but from date of return – Return filed on 17th September, 2016 and return rectified on 12th September, 2017 – Notice u/s 143(2) issued on 10th August, 2018 – Barred by limitation; A.Y. 2016-17

34. Atul Projects India (Pvt.) Ltd. vs. UOI [2020] 422 ITR 478
(Bom.) Date of order: 2^nd
January, 2019 A.Y.: 2016-17

Assessment
– Notice u/s 143(2) of ITA, 1961 – Limitation – Defective return –
Rectification of defects – Relates back to date of original return – Time limit
for issue of notice u/s 143(2) – Not from date of rectification of defects but
from date of return – Return filed on 17^th September, 2016 and
return rectified on 12^th September, 2017 – Notice u/s 143(2) issued
on 10^th August, 2018 – Barred by limitation; A.Y. 2016-17

For
the A.Y. 2016-17, the assessee filed its return on 17^th October,
2016 and it was found to be defective. The A.O. issued a notice u/s 139(9) of
the Income-tax Act, 1961 and called upon the assessee to remove the defects
which the assessee did within the permitted period on 12^th
September, 2017. Yet another notice was issued by the Department on 19^th
September, 2017 u/s 139(9) which stated that the return filed on 12^th
September, 2017 in response to the directions for removing the defects, was
also considered to be defective. On 29^th September, 2017, the
assessee electronically represented to the Department that there was no defect
in the return but this communication was not responded to by the Department. On
10^th February, 2018, the A.O. passed an order u/s 143(1).
Thereafter, on 10^th August, 2018, the A.O. issued a notice u/s
143(2) for scrutiny assessment u/s 143(3).

The assessee filed a writ petition
and challenged the notice. The Bombay High Court allowed the writ petition and
held as under:

‘i)
The date of filing of the return would be the date on which it was initially
presented and not the date on which the defects were removed. The assessee had
filed its return of income on 17^th October, 2016 and it was found to
be defective. The Department had called upon the assessee to remove the
defects, which the assessee did on 12^th September, 2017. On a
representation by the assessee, the Department did not raise this issue further
and thus had impliedly accepted the assessee’s representation that there were
no further defects after the assessee had removed the defects on 12^th
September, 2017. The notice dated 10^th August, 2018 issued u/s
143(2) was barred by limitation.

ii) In the result, the impugned
notice dated 10^th August, 2018 is set aside.’