If defects u/s 139(9) removed, date of filing of original return has to be considered for the purpose of computing the period of limitation for issue of notice u/s 143(2)
In a recent judgment, the Hon’ble Supreme Court dismissed the Special Leave Petition (SLP) of the Income Tax Department against the judgment of Gujarat High Court holding that upon defects being removed, it is the date of filing of the original return which has to be considered for the purpose of computing the period of limitation for issue of notice u/s 143(2) of the Act and not the date on which the defects actually came to be removed.
ABCAUS Case Law Citation:
4416 (2025) (02) abcaus.in SC
In the instant case, the respondent assessee was a company registered under the Companies Act, 2013. For the relevant Assessment Year, the petitioner filed its return of income under section 139(1) of the Act. Thereafter, the assessee received an intimation of defective return under section 139(9) of the Act. The assessee corrected the defect and subsequently, the return was processed under subsection (1) of section 143 of the Act wherein the date of original return was referred to the date of filing return u/s 139(1) of the Act.
Thereafter, a notice under subsection 143(2) of the Act was issued to the assessee after the completion of limitation period reckoned from the date of the filing of original return u/s 139(1) of the Act.
Aggrieved, the assessee filed a Writ Petition before the Hon’ble Supreme Court contending that the notice was barred by limitation as the same had been issued beyond the permissible time limit, as provided under section 143(2) of the Act.
It was submitted that since the defect was cured within the time allowed, a notice under sub-section (2) of section 143 of the Act, could have been issued on or before the end of six months from the end of the financial year in which original return was filed, however, the notice was issued almost one year after which was clearly beyond the period of limitation.
It was pointed out by the assessee that intimation issued under section 143(1) of the Act after the defect in the return of income was removed, acknowledges the date of filing of the return to be the date of original filing.
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.
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 the controversy involved in the present case is no longer res integra as various High Courts including Bombay High Court, Delhi High Court have taken a view that the date of removal of defects would relate back to the date of filing of the original return.
On the contrary the Revenue submitted that the return filed under section 139(1) of the Act was a defective return and a return with defects is not a valid return under the Act. Therefore, the date of filing of the defective return cannot be taken In the instant appeal, the assessee had challenged the order of CIT(A) in confirming consideration for the purpose of computing the limitation for issuance of notice under section 143(2) of the Act.
The Revenue further contended that once the defects have been removed within the prescribed time limit, a fresh return has to be filed under section 139(9) of the Act. Thus, as and when such defects are removed, such return becomes a valid return under section 139 of the Act and the date of limitation for issuance of notice under section 143(2) of the Act will be determined on the basis of the date when such return of income is treated to be a valid income.
The Hon’ble High Court observed that rom 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 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 subsection (1) thereof, subsection (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.
The Hon’ble High Court opined that the original return which was defective when it was filed is rectified upon removal of the defects under subsection (9) of section 139 of the Act and becomes a valid return. Thus, as held by the Bombay High Court, 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 been to 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.
Accordingly, the Hon’ble High Court quashed and set aside the impugned notice issued under subsection (2) of section 143 of the Act and all proceedings taken pursuant thereto.
Not satisfied, the Revenue challenged the judgment of the Hon’ble High Court by filing a Special Leave Petition before the Hon’ble Supreme Court.
However, the Hon’ble Supreme Court dismissed the Special Leave Petition (SLP) by observing, “We have heard learned counsel for the respective parties. We are not inclined to interfere in the matter having regard to the facts of the present case. Hence, the Special Leave Petition is dismissed. However, the question of law, if any, is left open to be agitated in any other appropriate case.”
Download Full Judgment Click Here >>
- ITAT allows exemption u/s 54EC for delayed investment in REC Bonds
- PNB invites application for empanelment of CA/CMA/CS for preparation of Due Diligence Report
- EOI invited for empanelment of CA Firms in Transport Commissioner Office Lucknow
- Separate Filing of e-form CSR-2 after transition from MCA21 V2 to V3 Portal
- MCA gives relaxation of additional fees for filing of 13 e-forms during transition to V3 Portal
 removed, date of original ITR relevant for limitation u/s 143(2)){kind=link}