Section 139(9) deals with defective return. 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 15 days from the date of such intimation or within such further period which, on an application made in this behalf, the Assessing Officer may allow; and if the defect is not rectified within the said period of 15 days, the return shall be treated as an invalid return and the provisions of this Act shall apply as if the assessee had failed to furnish the return:
Provided that where the assessee rectifies the defect after the expiry of the said period of 15 days or the further period allowed, but before the assessment is made, the Assessing Officer may condone the delay and treat the return as a valid return.
A return shall be considered as a defective return unless it is accompanied by all the following documents:
- A return in the prescribed form with all annexure, columns and statements duly filled in.
- A statement showing computation of tax payable.
- Proofs of tax, if any, claimed to have been deducted or collected at source and the advance tax and self-assessment tax, if any, claimed to have been paid.
Related Cases:
S. 139(9), 140 & 292B of IT Act, 1961—Return—As per S. 292B, a return of income shall not be treated as invalid merely by reason of any mistake, defect or omission in such return of income. If the return of income is not signed by signatory as contemplated by S. 140 would be a mistake, defect or omission and such defect can be cured by virtue of S. 139(9) r/w S. 292B of the Act. Once the defect is removed, it will relate to original date of filing the return and once the return is valid and in conformity with the intended purpose of the Act, such cured return of income cannot be ignored—Prime Securities Ltd. vs. Varinder Mehta, ACIT (2009) 226 CTR 247 (Bom)
S. 139(9), 140 & 292B of the IT Act, 1961—Return—S.140 inter alia mandates that a return submitted by an assessee is required to be signed and verified by him and in the absence of both requirement, the return is invalid, defective and curable in spite of the deeming effect of s. 292B, therefore no assessment can be made on such invalid and defective return—CIT vs. Harjinder Kaur (2009) 222 CTR 254 (P&H)
S. 41(1) & 139(9) of IT Act, 1961—Business income—As per S. 139(9) when the return has been treated as defective by the Assessing officer and despite giving an opportunity, the assesse has not rectified the defect, the return shall be treated as an invalid return, the provisions of this act shall apply. Therefore, the deduction of interest as claimed in such return cannot be deemed to have been allowed, and, therefore, interest waived by the bank cannot be charged to tax under S. 41(1) of the Act—Rayala Corporation (P) Ltd. vs. ACIT. [2010] 127 TTJ 369 (ITAT-Chennai B)
S. 139(9) of the IT Act, 1961—AY 1989-90—Return—If return of income filed by assessee is without annexure, statements or copies of report of audit or otherwise profit and loss account have not been attached, the return would be a defective return and not invalid return. In case of defective return time limit for issue of notice for assessment u/s 143(2) will be from the date of filing of return and not from the date defect was rectified
Income Tax Act, 1961, sections 44AB, 139(9) and 271—Audit Report—Penalty This appeal before the Rajasthan High Court arose out of the order of the Tribunal sustaining the penalty u/s 271-B for failure on the part of the assessee to get its accounts audited and obtain the report of such audit before the date prescribed u/s 44AB. The main substantial question of law arose for consideration in this appeal was: Whether penalty u/s 271B could be validly imposed without invoking the provisions of section 139(9) of the Income Tax Act, 1961? While allowing the appeal, the Rajasthan High Court held that:—“The opportunity could have been given to the assessee to remove the defects in return by complying with the requirement of law so that his return became complete. On the return being complete, no penalty could otherwise have been levied, as no breach would survive. In other case where the compliance with Section 44AB becomes redundant, due to completion of assessment, the question to levy of penalty has to be considered in the light of provisions of statute, in the present case Section 271B read with Section 273B.
Reference:
As Per 139(9), of the Income Tax Act, 1961-
Return of income
139. (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 an application made in this behalf, the Assessing Officer may, in his discretion, allow; and if the defect is not rectified within the said period of fifteen days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in any other provision of this Act, the return shall be treated as an invalid return and the provisions of this Act shall apply as if the assessee had failed to furnish the return :
Provided that where the assessee rectifies the defect after the expiry of the said period of fifteen days or the further period allowed, but before the assessment is made, the Assessing Officer may condone the delay and treat the return as a valid return.
Explanation—
For the purposes of this sub-section, a return of income shall be regarded as defective unless all the following conditions are fulfilled, namely :—
(a) 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;
(aa) the tax together with interest, if any, payable in accordance with the provisions of section 140A, has been paid on or before the date of furnishing of the return;
(b) the return is accompanied by a statement showing the computation of the tax payable on the basis of the return;
(bb) the return is accompanied by the report of the audit referred to in section 44AB, or, where the report has been furnished prior to the furnishing of the return, by a copy of such report together with proof of furnishing the report;
(c) the return is accompanied by proof of—
(i) the tax, if any, claimed to have been deducted [or collected] at source and the advance tax and tax on self-assessment, if any, claimed to have been paid :
Provided that where the return is not accompanied by proof of the tax, if any, claimed to have been deducted [or collected] at source, the return of income shall not be regarded as defective if—
(a) a certificate for tax deducted or collected was not furnished u/s 203 or 206C to the person furnishing his return of income;
(b) such certificate is produced within a period of two years specified under sub-section (14) of section 155;
(ii) the amount of compulsory deposit, if any, claimed to have been made under the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974 (38 of 1974);
(d) where regular books of account are maintained by the assessee, the return is accompanied by copies of—
(i) manufacturing account, trading account, profit and loss account or, as the case may be, income and expenditure account or any other similar account and balance sheet;
(ii) in the case of a proprietary business or profession, the personal account of the proprietor; in the case of a firm, association of persons or body of individuals, personal accounts of the partners or members; and in the case of a partner or member of a firm, association of persons or body of individuals, also his personal account in the firm, association of persons or body of individuals;
(e) where the accounts of the assessee have been audited, the return is accompanied by copies of the audited profit and loss account and balance sheet and the auditor’s report [and, where an audit of cost accounts of the assessee has been conducted, under section 233B of the Companies Act, 1956 (1 of 1956), also the report under that section;
(f) where regular books of account are not maintained by the assessee, the return is accompanied by a statement indicating the amounts of turnover or, as the case may be, gross receipts, gross profit, expenses and net profit of the business or profession and the basis on which such amounts have been computed, and also disclosing the amounts of total sundry debtors, sundry creditors, stock-in-trade and cash balance as at the end of the previous year.