The Kolkata bench if the Income Tax Appellate Tribunal (ITAT) held that when original return filed is defective and the defect is removed under Section 139(9) of the Income Tax Act, the return filed under Section 139(1) becomes a valid return from the date when it was originally filed.
The AO framed the assessment order under Section 143(3) vide order dated 14.12.2019 for the A.Y. 2017-18 of the Income Tax Act. The assessee in its return of income disclosing total income of Rs. Nil and book profit of Rs. 5,54,72,136/-. In the order passed under section 143(3) of the Act, the . AO assessed the income of the assessee at Rs. 16,43,788/- after making an additions/disallowances on account of under section 36(1)(va) r.w.s. 2(24)(x) of Rs. 13,04,162/- and disallowance by way of penalty or fine for violation of any law of Rs. 3,39,626/-.
Aggrieved by the above order, assessee preferred an appeal before the CIT(A) where the appeal of the assessee was dismissed by the sustaining the order of AO. Aggrieved, the assessee appealed before the tribunal.
After hearing both the parties, the tribunal noted that when original return filed is defective and the defect is removed under Section 139(9) of the Income Tax Act, the return filed under Section 139(1) becomes a valid return from the date when it was originally filed. The assessee drew Support from the decision of the Bombay High Court in the case of Atul Projects India Pvt. Ltd -Vs- Union of India and Another reported in where it was he that “it is true that the return was invalid as originally filed because of a defect in the person signing the return. But by virtue of Section 139(9) that defect could be cured and was in fact cured. Though the defect was cured on October 15, 1992 it wou relate back to December 31, 1991 the date of original filing of the return.”
The two bench member consisting of Rajesh Kumar (Accountant member) and Rajesh Kumar (Judicial member) held that view taken by the authorities below is not correct since the assessee submitted original return defective and defect was removed under section 139(9) of the Act, the return filed under section 139(1) becomes valid return from the date when it was originally filed.
The bench felt inclined to allow the ground taken by the assessee and direct the AO to allow set off the business income of Rs. 16,43,788/- with carry forwarded business loss of Rs. 5,61,50,519/- for A.Y. 2015-16 by the assessee. Accordingly, the appeal of the assessee was allowed.
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