Defect notice u/s. 139(9) is not in accordance with law hence return filed to be considered as valid

Wholery Infrastructure Private Ltd. Vs DCIT (ITAT Jaipur)

ITAT Jaipur held that as defect notice issued u/s. 139(9) of the Income Tax Act is not in accordance with the law and hence the return of income filed by the assessee should be considered as valid return.

Facts- The assessee filed an application for rectification u/s. 154 of the IT Act, 1961 stating for rectification of a mistake of law apparent in the order passed by the DCIT, CPC, Bangalore for invalidating the return filed by the Assessee.

The application of the assessee had been considered by AO who on perusal of the application filed by the assessee found that an order u/s. 139(9) has been passed by the DCIT, CPC, Bangalore treating the return as an invalid return with remarks as “Inspite of being afforded adequate opportunities, the Assessee has not rectified all the aforementioned defects noticed in the return of income. Accordingly, as per provisions of Section 139(9), the return of income filed is treated as an invalid return”. Hence the AO rejected the application of the assessee. CIT(A) dismissed the appeal.

Conclusion- Held that the assessee did not seek any rectification which has been treated as invalid but it sought rectification in the order passed u/s 139(9) of the Act, therefore, the rectification application filed by the assessee was nothing to do with the invalid Income Tax Return and the AO held that due to invalid return for the A.Y. 2017-18, the rectification application is rejected. It is noteworthy to mention that if the order passed by the AO u/s 139(9) of the Act contains apparent mistake then it is curable u/s 154 of the Act. Since there is no defect in the ITR filed by the assessee, therefore it is a valid Income Tax Return.

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