Income Tax Return filed with Defect and Consequent Intimation u/s.143(1) is Invalid: ITAT [Read Order]

The Income Tax Appellate Tribunal ( ITAT), Cuttack Bench, has recently, in an appeal filed before it, held that the income tax return filed with defect and consequent intimation u/s.143(1) is Invalid.

The aforesaid observation was made by the ITAT when an appeal filed before it  by an assessee, as against the order of the CIT(A), National Faceless Appeal Centre (NFAC), Delhi, passed in DIN & Order No.ITBA/NFAC/S/250/2022-23/1043436040(1), dated 14.06.2022, for the assessment year 2014-2015.

With the  AR ,Shri Nihar Ranjan Biswal, CA, submitting on the assessee’s behalf that the assessee  had filed its return of income on 14.01.2015, and that the assessee had been served with a communication dated 21.08.2015 intimating that the return filed by it to be a defective return and that if the defect was not rectified the return would be treated as invalid, he further added that the assessee had thus ,not complied with the notice issued u/s.139(9) of the Income Tax Act, on 21.08.2015.

The AR further contended that subsequently the assessee was served with intimation u/s.143(1) of the  Income Tax Act on 14.03.2016, wherein some adjustments have been made, And that as the return filed by the assessee was defective u/s.139(9) of the Income Tax Act , and as the assessee had not made the correction as was called for to treat the return as a valid return, in view of the provisions of Section 139(9) of the Income Tax Act, the return filed by the assessee is thus liable to be treated as invalid return and hence that the intimation u/s.143(1) of the Income Tax Act cannot  be issued on such a return.

It was also submitted by him that the intimation issued u/s.143(1) of the  Income Tax Act, on 14.03.2016, is required to be cancelled, and that it was without appreciating the submission of the assessee, that the CIT(A) had confirmed the said intimation.

With  Shri M.K.Gautam, the CIT-DR , in  his opposing reply vehemently supporting the order of the  CIT(A), it was his submission that as the intimation has been issued u/s.143(1) of the Income Tax Act, the assessee should be asked to pay the demand as raised, and that the appeal filed by the assessee is a frivolous appeal.

Listening to the opposing contentions of either sides and perusing the materials available on record, the ITAT Bench consisting of Arun Khodpia , the Accountant Member and George  Mathan, the Judicial Member observed :

“We have considered the rival submissions. A perusal of the communication dated 21.08.2015 issued to the assessee clearly shows that the CPC has issued the notice u/s.139(9) of the Act intimating defects in the return. In the notice, it has been categorically mentioned that if the defects were not removed, the return filed by the assessee would be treated as invalid return.

“Admittedly, the assessee has not rectified the defects.Consequently, the return filed by the assessee is liable to be treated as invalid return.”, the ITAT Bench commented.

Thus allowing the assessee’s appeal, the Cuttack ITAT held:

“Once the return filed by the assessee is treated as invalid return, intimation u/s.143(1) of the Act issued on the said return on 14.03.2016, admittedly, is invalid and consequently the same stands quashed.”

To Read the full text of the Order CLICK HERE

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