TaxTMI 
TaxTMI 
2020 (10) TMI 364
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.... "1. The Order of the Ld. CIT(A) is erroneous on the facts of the case 2. The learned CIT(A) erred in granting relief to the assessee by holding that the invalid return cannot be processed ignoring the fact that the order u/s 139(9) dated 17.12.2016 had been subsequently withdrawn vide CPC communication dated 24.03.2017. 2.1 The Ld. CIT(A) erred in holding that the RoI is invalid while at the same time granted the benefit of exemption on such invalid return. 3. The Ld. CIT(A) erred in failing to appreciate the fact that the order invalidating the return of income had been withdrawn and the assessee had not objected for such withdrawal and hence the return originally filed is valid. 4. The Ld.CIT(A) failed to take into consideration the fact that the assessee had claimed exemption u/s 11 of the Act, when the assessee has not been granted recognition u/s 12AA of the Act and therefore not eligible exemption u/s 11 of the Act. 5. The Ld. CIT(A) erred in directing the Assessing officer to ignore the exemption claimed u/s 11 of the Act and allow exemption u/s 10(23C)(iiiab) of the Act, when the assessee is not substantially financed by the Gov....
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....g the returns filed as invalid returns. 4. Subsequently, another order was passed on 24.3.2017 for both the years, wherein it was stated that the earlier orders passed u/s 139(9) of the Act may kindly be ignored and the returns of income filed for both the years have been taken up for processing. Accordingly, the returns of income relating to AY 2014-15 and 2015-16 were processed and intimations u/s 143(1) of the Act dated 30.3.2017 were issued separately for both the years determining the total income at Rs. 7.79 crores and Rs. 9.12 crores respectively for assessment years 2014-15 & 2015-16. 5. The assessee challenged the intimations issued u/s 143(1) of the Act for both the years by filing appeals before Ld. CIT(A). 6. It was contended before Ld CIT(A) that the CPC has treated the returns of income filed for both the years as invalid by written orders, since the assessee did not rectify the defects pointed out by CPC u/s 139(9) of the Act. It was submitted that, after having held that the returns of income are invalid returns, the AO/CPC could not state that their earlier order should be ignored. It was contended that there is no provision in the Act to reconsider the....
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....tted that the assessee has put a fresh claim for exemption u/s 10(23C)(iiiab) of the Act before the Ld CIT(A) and the Ld CIT(A) was not justified in allowing the claim without properly examining the same and without confronting the same with the AO. He submitted that the question whether the assessee is substantially financed by the State Government requires deeper examination. Further Ld CIT(A) could not give such directions after holding that the returns of income are invalid, i.e., directions have been given to the AO for the years in which the assessee has been deemed to have not filed returns of income. Accordingly he submitted that the directions so given by Ld CIT(A) is not correct in the eyes of law and they are liable to be dismissed. 12. The Ld A.R, on the contrary, supported the orders passed by Ld CIT(A) in both the years. He submitted that the orders issued by the AO/CPC treating the returns of income as invalid returns shall be final and there is no provision under the Act to recall them. He submitted that the provisions of sec.139(9) clearly states that, if the defect pointed out by the AO in the return of income is not rectified within the prescribed time limit, ....
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.... (c) the return is accompanied by proof of- (i) the tax, if any, claimed to have been deducted or collected at source and the advance tax and tax on self-assessment, if any, claimed to have been paid : Provided that where the return is not accompanied by proof of the tax, if any, claimed to have been deducted or collected at source, the return of income shall not be regarded as defective if- (a) a certificate for tax deducted or collected was not furnished under section 203 or section 206C to the person furnishing his return of income; (b) such certificate is produced within a period of two years specified under sub-section (14) of section 155; (ii) the amount of compulsory deposit, if any, claimed to have been made under the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974 (38 of 1974); (d) where regular books of account are maintained by the assessee, the return is accompanied by copies of- (i) manufacturing account, trading account, profit and loss account or, as the case may be, income and expenditure account or any other similar account and balance sheet; (ii) in the case of a proprietary business ....
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....have power to hold that his earlier order should be ignored. It was submitted that there is no provision under the Act to hold so. We find force in the submissions of the assessee. After passing an order under the provisions of the Act, the mistake, if any, in the order or incorrectness of the order could be rectified/corrected only through the process of law prescribed under the Act. The AO can rectify the mistakes apparent from record u/s 154 of the Act. However, even if any rectification order is required to be passed u/s 154 of the Act, it is required to be shown that there is a mistake apparent from record in the original order. Further rectification of order cannot be carried out without giving notice of hearing to the assessee. However, even u/s 154 of the Act, entire order cannot be recalled. If any of the order so passed by an assessing authority is erroneous and prejudicial to the interests of revenue, then revision proceedings can be initiated u/s 263 of the Act by the Ld CIT. Hence the letters dated 24.3.2017 issued by the AO on his own directing the assessee to ignore its earlier orders is not in accordance with law. Hence the said letters are nullity in the eyes of la....