Curable defective return and remand for fresh assessment where seized material was unavailable to the assessee.

A defective return filed in response to section 153A notices was treated as curable where self-assessment tax had been paid before completion of assessment, because the proviso to section 139(9) permits condonation when the defect is rectified before assessment. The return was therefore to be regarded as valid. Where the assessee lacked access to seized material and had sought its release, the assessments and appellate order were set aside and the matter remitted for de novo assessment so that the assessee could receive a reasonable opportunity to substantiate its claims. The return was restored to valid status and fresh adjudication was directed on merits.

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Issues: (i) Whether the defect in the return arising from non-payment of self-assessment tax could be condoned and the return treated as valid under the proviso to section 139(9) of the Income-tax Act, 1961. (ii) Whether the assessments and the appellate order required to be set aside and the matters remitted for de novo assessment in view of the seized material not being available to the assessee.

Issue (i): Whether the defect in the return arising from non-payment of self-assessment tax could be condoned and the return treated as valid under the proviso to section 139(9) of the Income-tax Act, 1961.

Analysis: The return was filed in response to notices under section 153A, and the self-assessment tax on the returned income had been deposited before completion of assessment. The proviso to section 139(9) empowers the Assessing Officer to condone delay where the defect is rectified after the prescribed time but before the assessment is made. On the admitted facts, the defect was capable of being cured and the return could not be treated as invalid merely because the tax was paid belatedly.

Conclusion: The defect was liable to be condoned and the return was to be treated as valid, in favour of the assessee.

Issue (ii): Whether the assessments and the appellate order required to be set aside and the matters remitted for de novo assessment in view of the seized material not being available to the assessee.

Analysis: The assessee had consistently sought release of the seized material and had also produced challans evidencing payment of self-assessment tax. The appellate order had been passed without effective prosecution, and the circumstances showed that the assessee should be given a fair opportunity to substantiate the claims with the relevant material. In these facts, remand to the Assessing Officer for fresh adjudication was considered appropriate, with a direction to afford reasonable opportunity of hearing and to make efforts to make the seized material available.

Conclusion: The matter was required to be remitted to the Assessing Officer for de novo assessment, in favour of the assessee.

Final Conclusion: The appeals were restored to the Assessing Officer for fresh consideration, with the returns to be treated as valid upon curing the defect and with a full opportunity to substantiate the claims on merits.

Ratio Decidendi: A defective return for non-payment of self-assessment tax may be treated as valid where the defect is cured before completion of assessment, and where relevant evidence is unavailable to the assessee, a remand for de novo assessment with reasonable opportunity of hearing is appropriate.

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