2022 (8) TMI 1499 - AT - Income Tax

Returns remain valid despite late self-assessment tax deposit under section 139(9) proviso allowing condonation

Shri Francisco X. Pacheco Versus DCIT, Central Circle, Panaji

The ITAT Panaji held that returns filed by the assessee should be treated as valid despite self-assessment tax being deposited after the 15-day period. ... Treating the returns filed by the assessee as defective returns - self-assessment tax has been deposited by the assessee after the expiry of 15 days but before the completion of assessment - HELD THAT:- Admittedly, it is a fact on record that assessee has deposited the self-assessment tax on the returned income filed in respect of notices issued u/s 153A. Copies of the challans for the taxes so deposited have been produced before us also and are placed on record. In respect of treating the returns filed by the assessee as defective returns, proviso to section 139(9) provides that “provided that where the assessee rectifies the defects after the expiry of the said period of 15 days or the further periods allowed, but before the before the assessment is made, the AO may condone the delay and treat the return as valid return”. Thus, considering the proviso to section 139(9) which empowers the AO to condone the delay where the self-assessment tax has been deposited by the assessee after the expiry of 15 days but before the completion of assessment and the fact of deposit of challans on record in terms of the said proviso to section 139(9), we find it proper to direct the AO to treat the said returns as valid returns where the defects have been removed by the assessee, by condoning the delay. We note that assessee has made his earnest attempt by filing his requisite applications before the concerned authorities for the release of seized material and is pursuing the matter, as stated by the ld. Counsel. Thus, we find it proper to set aside the order of ld. CIT(A) and remit the matter for all the seven years under consideration, back to the file of ld. AO for de-novo assessment considering the material submitted by the assessee, once the same is made available by the respective concerned authorities for which applications have been made for their release. We also direct the ld. AO who is adequately empowered under the Act and has all the where-whittle to call for the information to call for the information and records for the purpose of completing the assessment proceeding, to make all the concerted efforts to make the seized material available to the assessee to substantiate his claims. Assessee is also directed to comply with the notices in respect of the assessment proceeding and be diligent by avoiding to take any adjournments except in specific unavoidable circumstances. Issues Involved:1. Validity of assessment orders passed under section 144 read with section 153A of the Income-tax Act, 1961.2. Non-issuance of notice under section 143(2) for certain assessment years.3. Seizure of documents by Crime Branch and CBI affecting the assessee's ability to support claims.4. Non-prosecution leading to ex-parte dismissal by CIT(A).5. Remanding the matter back to the Assessing Officer for de-novo assessment.Issue-wise Detailed Analysis:1. Validity of Assessment Orders:The assessee challenged the validity of the assessment orders passed under section 144 read with section 153A of the Income-tax Act, 1961, arguing that the orders were without jurisdiction, suffered from infirmity, and were passed without following the principles of natural justice. The Tribunal noted that the assessee had filed returns and deposited self-assessment tax, but the returns were treated as invalid due to non-payment of self-assessment tax within the stipulated period.2. Non-issuance of Notice under Section 143(2):For the assessment years 2008-09, 2009-10, and 2014-15, the Assessing Officer did not issue notices under section 143(2) since the returns were treated as invalid. For the assessment years 2010-11 to 2013-14, the returns were considered valid after the assessee deposited the self-assessment tax, and notices under section 143(2) were issued. The Tribunal directed the Assessing Officer to treat the returns as valid by condoning the delay in payment of self-assessment tax.3. Seizure of Documents:The assessee claimed that all documents and files were seized by the Crime Branch, Goa, and CBI, affecting the ability to support claims. The Tribunal acknowledged the seizure and noted the assessee's efforts to retrieve the documents through applications to the concerned authorities. The Tribunal directed the Assessing Officer to make concerted efforts to obtain the seized material to facilitate the assessee in substantiating claims.4. Non-prosecution Leading to Ex-parte Dismissal:The CIT(A) had dismissed the appeals ex-parte due to non-prosecution by the assessee. The Tribunal found that the assessee had made earnest attempts to retrieve the seized documents and directed the Assessing Officer to provide a reasonable opportunity for the assessee to present the case.5. Remanding the Matter Back to the Assessing Officer:The Tribunal set aside the order of the CIT(A) and remitted the matter back to the Assessing Officer for de-novo assessment. The Tribunal instructed the Assessing Officer to consider the material submitted by the assessee once made available by the authorities. The assessee was directed to comply with the notices diligently and avoid unnecessary adjournments. The Tribunal emphasized that the remand would not prejudice the revenue or the assessee's defense.Conclusion:The Tribunal allowed the appeals for statistical purposes and directed the Assessing Officer to conduct a fresh assessment considering the seized material and providing the assessee with a reasonable opportunity to present the case. The Tribunal's order ensures that the principles of natural justice are followed, and the assessee is given a fair chance to support claims with the necessary documents.