35. Kunal Structure (India) Private Ltd. vs. Dy.CIT [2020] 422 ITR 482 (Guj.) Date of order: 24th October, 2019 A.Y.: 2016-17
Assessment
– Notice u/s 143(2) of ITA, 1961 – Limitation – Notice calling for
rectification of defects in return u/s 139(9) – Rectification within time
allowed in notice – Not a case of revised return but of corrected return which
relates back to date of original return – Limitation for notice u/s 143(2) runs
from date of original return, not date of rectified return; A.Y. 2016-17
For
the A.Y. 2016-17, the petitioner company had filed its return of income u/s
139(1) on 10th September, 2016. Thereafter, the petitioner received
an intimation of defective return u/s 139(9) of the Act on 17th
June, 2017. The petitioner received a reminder on 5th July, 2017
granting him an extension of fifteen days to comply with the notice issued u/s
139(9) and accordingly, the time limit for removal of the defects u/s 139(9) of
the Act stood extended till 20th July, 2017. The petitioner removed
the defects on 7th July, 2017 within the time granted. Subsequently,
the return was processed u/s 143(1) on 12th August, 2017 wherein the
date of original return is shown to be 10th September, 2016.
Thereafter, the impugned notice u/s 143(2) of the Act came to be issued on 9th
August, 2018, informing the petitioner that the return of income filed by it for the A.Y. 2016-17 on 7th
July, 2017 has been selected for scrutiny.
The assessee
filed a writ petition and challenged the notice. The Gujarat High Court allowed
the petition and held as under:
‘i) A study of the provisions of section 139 of
the Income-tax Act, 1961 shows that under sub-section (1) thereof, an assessee
is required to file return on or before the due date. If one looks at the
language employed in sub-sections (1), (3) and (5) of section 139, a common
thread in all the sub-sections is that the assessee is required to file a
return of income under those sub-sections. However, from the language employed
in sub-section (9) of section 139 of the Act, it does not require any return to
be filed by the assessee. All that the section 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.
ii) Unlike sub-section (5) of section 139 of the
Act which requires an assessee to file a revised return of income in case of
any omission or wrong statement in the return of income filed under sub-section
(1) thereof, sub-section (9) of section 139 of the Act does not require an
assessee to file a fresh return of income, but requires the assessee to remove
the defects in the original return of income filed by him within the time
provided therein. Once the defects in the original return of income are
removed, such return would be processed further under the Act. In case such
defects are not removed within the time allowed, such return of income would be
treated as an invalid return.
iii) There is a clear distinction between a 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. There is no concept of corrected return of
income under the Act. Therefore, in effect and substance, what the notice under
sub-section (9) of section 139 does is to call upon the assessee to remove the
defects pointed out therein. Therefore, mere reference to the expression “corrected
income” in the notice under sub-section (9) of section 139 of the Act does not
mean that a fresh return of income has been filed under that sub-section. The
action of removal of the defects would relate back to the filing of the
original return of income and, accordingly, it is the date of filing of the
original return which has to be considered for the purpose of computing the
period of limitation under sub-section (2) of section 143 of the Act and not
the date on which the defects actually came to be removed.
iv) The assessee filed its return of income under sub-section (1) of
section 139 on 10th September, 2016. Since the return was defective,
the assessee was called upon to remove such defects, which came to be removed
on 7th July, 2017, that is, within the time allowed by the A.O.
Therefore, upon such defects being removed, the return would relate back to the
date of filing of the original return, that is, 10th September, 2016
and consequently the limitation for issuance of notice under sub-section (2) of
section 143 of the Act would be 30th September, 2017, viz., six
months from the end of the financial year in which the return under sub-section
(1) of section 139 was filed. The notice under sub-section (2) of section 143
of the Act had been issued on 9th August, 2018, which was much
beyond the period of limitation for issuance of such notice as envisaged under
that sub-section. The notice, therefore, was barred by limitation and could not
be sustained.’
