What is the department's own instruction on what an officer must do when a s.139(9) defect has not been cured and the case is under scrutiny?
The Board's letter states that under the proviso to s.139(9) an assessee can rectify the defect until the assessment order is passed, provided the officer condones the delay, and directs that in pending cases where the defect has not been rectified the officer is immediately to initiate proceedings under s.144, and that where the defect is not removed by the time of passing the assessment order the case is to be concluded by an order under s.144.
Decided by the CBDT Circulars & Instructions (Central Board of Direct Taxes) on 2017-12-12, reported as F.No. System/ITBA/CASS/Defective returns/17-18/, dated 12 December 2017. It bears on section 139(9), section 139(9) proviso, section 144, section 119, section 143(3) of the Income Tax Act 1961, in Assessment & Scrutiny, Faceless Assessment & Appeals and How Tax Law Is Read matters.
It is the department's own reading of the proviso, and it is the department's own reading that is binding on the officer under s.119. Two things follow: the officer cannot say the fifteen days have closed the door while the assessment is still open, and he cannot make a s.143(3) assessment on a return he has himself declared invalid.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
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The instrument is a letter of the Central Board of Direct Taxes, F.No. System/ITBA/CASS/Defective returns/17-18/, dated 12 December 2017, addressed to subordinate authorities and issued through the Board's systems wing. It deals with a specific administrative situation: returns which had earlier been treated as defective under s.139(9), either because the tax as per the return had not been paid or for another reason specified in that sub-section, and which had also been selected for scrutiny in CASS Cycle 2016. Its closing paragraph records that it is issued with the prior approval of the Member (IT&C), CBDT. Its text could not be obtained from the department. It is not on incometaxindia.gov.in, whose published communications pages do not appear to carry ITBA systems letters of this kind. The text set out in this entry is the letter as reproduced in full in the order of the Delhi Bench of the Tribunal in PME Power Solutions India Ltd v. DCIT, ITA Nos. 242 and 249/Del/2024, decided on 16 October 2024, where the Bench set it out at para 9 and then applied it at para 12. The file number, date and subject line were cross-checked against a second source outside the department. The copy reproduced in that order prints 'AD' throughout where 'AO' is plainly meant, and 'Member (IIT&C)' for what is plainly Member (IT&C).
The Board directed as follows. First, on the proviso to s.139(9): the letter sets the proviso out and states that under it an assessee can rectify the defects until the time the assessment order is passed, provided the delay in complying with the notice under s.139(9) is condoned by the Assessing Officer. From that the Board directed that in scrutiny cases where the assessee has already removed the defects specified under s.139(9), the Assessing Officer shall, before passing the assessment order under s.143(3), condone the delay in removing the defects and consider such returns as valid (para 2 of the letter). Second, on cases where the defect stands uncured: in pending cases where the defect specified under s.139(9) has not been rectified, the Assessing Officer is required immediately to initiate proceedings under s.144 by issuing a show-cause as per the first proviso to that section, after taking a view that the assessee has failed to make a return under s.139(1), s.139(4) or s.139(5). If the assessee rectifies the defect at any time up to the date of the assessment order, the case is to be dealt with in the manner set out in para 2 and the Assessing Officer is to proceed to pass an order under s.143(3). Where the defect is not removed by the time of passing the assessment order, the proceeding is to be concluded by an order under s.144 (para 3 of the letter). Third, the steps to be taken where the assessee has not responded to the s.139(9) notice at all: the Assessing Officer is to intimate the assessee of the defective status of the return and ask him to rectify the defects through the e-filing portal or to communicate it to the officer, initiating proceedings under s.144 at the same time; if the defects are removed, the return is to be treated as valid and the matter proceeded with accordingly; if they are not removed and the return remains invalid, the officer is to pass an order under s.144 as if no return had been filed by the assessee, all the steps prerequisite to an order under s.144 being followed scrupulously (para 4 of the letter). The letter is issued with the prior approval of the Member (IT&C), CBDT (para 5).
The proviso to s.139(9) is the provision that decides whether an assessee who did not answer the defect notice within the fifteen days has anything left. On its face it is permissive and it is addressed to the officer: where the assessee rectifies the defect after the expiry of the said period of fifteen days or the further period allowed, but before the assessment is made, the Assessing Officer may condone the delay and treat the return as a valid return. That wording leaves two things unsettled in practice - how long the window really runs, and whether the officer is obliged to think about it at all. This letter is the department's own answer to both, and it is an answer in the assessee's favour: the cure runs until the assessment order is passed, and where the defect has in fact been removed the officer shall condone the delay and treat the return as valid before making the s.143(3) assessment. The word is 'shall'. That is why the letter is worth having on the file. An instruction of this kind is issued to subordinate authorities under s.119 and binds them; the Delhi Bench so held in PME Power Solutions India Ltd v. DCIT at para 12, relying on Commissioner of Customs v. Indian Oil Corporation Ltd, 165 ELT 257 (SC), and rejecting the Departmental Representative's argument that Board instructions are not mandatory on departmental authorities. The binding force comes from s.119, not from judicial approval of the construction, so an assessee can hold the Board to its own instruction on the reach of the proviso even where no court has construed the proviso in those terms. An officer who says the fifteen days closed the door is departing from his own instruction, and that is the objection to make. The letter cuts both ways, and it should be read knowing that. The same paragraphs that give the assessee the condonation direction give the department the proposition that an uncured defect is to be met with a best-judgment assessment under s.144, on the footing that no return was filed, rather than with processing of the return. An assessee who cannot cure the defect gains nothing from this letter and faces a non-est return, with whatever consequences that carries for carry forward and for the rest. What it does supply, even then, is the proposition that the assessment must be made under s.144 and not under s.143(3) - which is the point on which the assessment in PME Power Solutions was quashed. Its limits are the limits of an instruction. It does not enlarge the proviso and cannot: the statutory cut-off is the making of the assessment, and the letter's operative test is the same one, whether the defect was removed before the assessment order was passed. It says nothing about a defect cured after that date. And because the letter cannot be read on the department's own site, an assessee relying on it is relying on a reproduction. In practice that means putting the Tribunal's order before the officer rather than the letter alone, since the order sets the letter out in full and holds it binding.
an assessee can rectify the defects till the time assessment order is passed provided the delay in complying with notice under section 139(9)
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Handle my notice → Ask a CA on WhatsAppThe Board's letter states that under the proviso to s.139(9) an assessee can rectify the defect until the assessment order is passed, provided the officer condones the delay, and directs that in pending cases where the defect has not been rectified the officer is immediately to initiate proceedings under s.144, and that where the defect is not removed by the time of passing the assessment order the case is to be concluded by an order under s.144. This was decided by the CBDT Circulars & Instructions (Central Board of Direct Taxes) and bears on section 139(9), section 139(9) proviso, section 144, section 119, section 143(3) of the Income Tax Act 1961. It is reported as F.No. System/ITBA/CASS/Defective returns/17-18/, dated 12 December 2017. It is the department's own reading of the proviso, and it is the department's own reading that is binding on the officer under s.119. Two things follow: the officer cannot say the fifteen days have closed the door while the assessment is still open, and he cannot make a s.143(3) assessment on a return he has himself declared invalid. If it applies to you, the first step is this: Put this letter in front of the officer with the condonation application under the proviso; it is his own instruction that the cure runs until the assessment order.
The instrument is a letter of the Central Board of Direct Taxes, F.No. System/ITBA/CASS/Defective returns/17-18/, dated 12 December 2017, addressed to subordinate authorities and issued through the Board's systems wing. It deals with a specific administrative situation: returns which had earlier been treated as defective under s.139(9), either because the tax as per the return had not been paid or for another reason specified in that sub-section, and which had also been selected for scrutiny in CASS Cycle 2016. Its closing paragraph records that it is issued with the prior approval of the Member (IT&C), CBDT. Its text could not be obtained from the department. It is not on incometaxindia.gov.in, whose published communications pages do not appear to carry ITBA systems letters of this kind. The text set out in this entry is the letter as reproduced in full in the order of the Delhi Bench of the Tribunal in PME Power Solutions India Ltd v. DCIT, ITA Nos. 242 and 249/Del/2024, decided on 16 October 2024, where the Bench set it out at para 9 and then applied it at para 12. The file number, date and subject line were cross-checked against a second source outside the department. The copy reproduced in that order prints 'AD' throughout where 'AO' is plainly meant, and 'Member (IIT&C)' for what is plainly Member (IT&C). The matter was decided on 2017-12-12 by the CBDT Circulars & Instructions (Central Board of Direct Taxes). On those facts the CBDT Circulars & Instructions held as follows. The Board directed as follows. First, on the proviso to s.139(9): the letter sets the proviso out and states that under it an assessee can rectify the defects until the time the assessment order is passed, provided the delay in complying with the notice under s.139(9) is condoned by the Assessing Officer. From that the Board directed that in scrutiny cases where the assessee has already removed the defects specified under s.139(9), the Assessing Officer shall, before passing the assessment order under s.143(3), condone the delay in removing the defects and consider such returns as valid (para 2 of the letter). Second, on cases where the defect stands uncured: in pending cases where the defect specified under s.139(9) has not been rectified, the Assessing Officer is required immediately to initiate proceedings under s.144 by issuing a show-cause as per the first proviso to that section, after taking a view that the assessee has failed to make a return under s.139(1), s.139(4) or s.139(5). If the assessee rectifies the defect at any time up to the date of the assessment order, the case is to be dealt with in the manner set out in para 2 and the Assessing Officer is to proceed to pass an order under s.143(3). Where the defect is not removed by the time of passing the assessment order, the proceeding is to be concluded by an order under s.144 (para 3 of the letter). Third, the steps to be taken where the assessee has not responded to the s.139(9) notice at all: the Assessing Officer is to intimate the assessee of the defective status of the return and ask him to rectify the defects through the e-filing portal or to communicate it to the officer, initiating proceedings under s.144 at the same time; if the defects are removed, the return is to be treated as valid and the matter proceeded with accordingly; if they are not removed and the return remains invalid, the officer is to pass an order under s.144 as if no return had been filed by the assessee, all the steps prerequisite to an order under s.144 being followed scrupulously (para 4 of the letter). The letter is issued with the prior approval of the Member (IT&C), CBDT (para 5).
The proviso to s.139(9) is the provision that decides whether an assessee who did not answer the defect notice within the fifteen days has anything left. On its face it is permissive and it is addressed to the officer: where the assessee rectifies the defect after the expiry of the said period of fifteen days or the further period allowed, but before the assessment is made, the Assessing Officer may condone the delay and treat the return as a valid return. That wording leaves two things unsettled in practice - how long the window really runs, and whether the officer is obliged to think about it at all. This letter is the department's own answer to both, and it is an answer in the assessee's favour: the cure runs until the assessment order is passed, and where the defect has in fact been removed the officer shall condone the delay and treat the return as valid before making the s.143(3) assessment. The word is 'shall'. That is why the letter is worth having on the file. An instruction of this kind is issued to subordinate authorities under s.119 and binds them; the Delhi Bench so held in PME Power Solutions India Ltd v. DCIT at para 12, relying on Commissioner of Customs v. Indian Oil Corporation Ltd, 165 ELT 257 (SC), and rejecting the Departmental Representative's argument that Board instructions are not mandatory on departmental authorities. The binding force comes from s.119, not from judicial approval of the construction, so an assessee can hold the Board to its own instruction on the reach of the proviso even where no court has construed the proviso in those terms. An officer who says the fifteen days closed the door is departing from his own instruction, and that is the objection to make. The letter cuts both ways, and it should be read knowing that. The same paragraphs that give the assessee the condonation direction give the department the proposition that an uncured defect is to be met with a best-judgment assessment under s.144, on the footing that no return was filed, rather than with processing of the return. An assessee who cannot cure the defect gains nothing from this letter and faces a non-est return, with whatever consequences that carries for carry forward and for the rest. What it does supply, even then, is the proposition that the assessment must be made under s.144 and not under s.143(3) - which is the point on which the assessment in PME Power Solutions was quashed. Its limits are the limits of an instruction. It does not enlarge the proviso and cannot: the statutory cut-off is the making of the assessment, and the letter's operative test is the same one, whether the defect was removed before the assessment order was passed. It says nothing about a defect cured after that date. And because the letter cannot be read on the department's own site, an assessee relying on it is relying on a reproduction. In practice that means putting the Tribunal's order before the officer rather than the letter alone, since the order sets the letter out in full and holds it binding. In the words reproduced by the source cited on this page: "an assessee can rectify the defects till the time assessment order is passed provided the delay in complying with notice under section 139(9)"
It was decided by the CBDT Circulars & Instructions on 2017-12-12 and is reported as F.No. System/ITBA/CASS/Defective returns/17-18/, dated 12 December 2017. Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section 139(9), section 139(9) proviso, section 144, section 119, section 143(3), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. The Board directed as follows. First, on the proviso to s.139(9): the letter sets the proviso out and states that under it an assessee can rectify the defects until the time the assessment order is passed, provided the delay in complying with the notice under s.139(9) is condoned by the Assessing Officer. From that the Board directed that in scrutiny cases where the assessee has already removed the defects specified under s.139(9), the Assessing Officer shall, before passing the assessment order under s.143(3), condone the delay in removing the defects and consider such returns as valid (para 2 of the letter). Second, on cases where the defect stands uncured: in pending cases where the defect specified under s.139(9) has not been rectified, the Assessing Officer is required immediately to initiate proceedings under s.144 by issuing a show-cause as per the first proviso to that section, after taking a view that the assessee has failed to make a return under s.139(1), s.139(4) or s.139(5). If the assessee rectifies the defect at any time up to the date of the assessment order, the case is to be dealt with in the manner set out in para 2 and the Assessing Officer is to proceed to pass an order under s.143(3). Where the defect is not removed by the time of passing the assessment order, the proceeding is to be concluded by an order under s.144 (para 3 of the letter). Third, the steps to be taken where the assessee has not responded to the s.139(9) notice at all: the Assessing Officer is to intimate the assessee of the defective status of the return and ask him to rectify the defects through the e-filing portal or to communicate it to the officer, initiating proceedings under s.144 at the same time; if the defects are removed, the return is to be treated as valid and the matter proceeded with accordingly; if they are not removed and the return remains invalid, the officer is to pass an order under s.144 as if no return had been filed by the assessee, all the steps prerequisite to an order under s.144 being followed scrupulously (para 4 of the letter). The letter is issued with the prior approval of the Member (IT&C), CBDT (para 5). It arises in Assessment & Scrutiny, Faceless Assessment & Appeals and How Tax Law Is Read matters, on section 139(9), section 139(9) proviso, section 144, section 119, section 143(3) of the Income Tax Act 1961, and was decided by Central Board of Direct Taxes. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Where the officer has made a s.143(3) assessment after declaring the return invalid, cite the letter together with PME Power Solutions India Ltd. v. DCIT. Where the defect has not been cured, expect and prepare for a best-judgment assessment under s.144 rather than the return being processed. Record the date of the assessment order; the letter's operative test is whether the defect was removed before it was passed.
Validity check could not be completed. The Board's own copy of this letter could not be located on incometaxindia.gov.in, whose published communications pages do not appear to carry ITBA systems letters. The text recorded here is taken from the letter as reproduced in the order of the Delhi Bench of the Tribunal in PME Power Solutions India Ltd. v. DCIT (ITA Nos. 242 and 249/Del/2024, 16 October 2024), which held it binding on departmental authorities under s.119. The file number, date and subject line were confirmed against a second source. Until a departmental copy is read, treat the wording as reported rather than as verified. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
This entry is written from the letter as reproduced verbatim in a Tribunal order, not from the department's own copy, which could not be reached. The reproduction in that order prints 'AD' where 'AO' is plainly meant. The same order also refers to an earlier CBDT instruction of 13 November 2013 on the same subject, which was not read. A CBDT instrument carries no stage and none is given. Two further limits on what could be established. The letter is in terms directed at returns treated as defective which were selected for scrutiny in CASS Cycle 2016, and whether the Board has since issued anything superseding, extending or replacing it was not established. And the copy reproduced in the Tribunal's order is headed by a catchline in the style used by commercial compilations - 'Section 143, read with sections 144 and 139, of the Income-tax Act, 1961 - Assessment - General' - above the file number and date, which suggests the Bench took its copy from such a compilation rather than from the Board; the Board's own subject line as issued could not be confirmed, and the subject recorded in this entry is taken from that catchline. This entry stays marked unverified for that reason and should be re-checked if a departmental copy becomes available. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The Board directed as follows. First, on the proviso to s.139(9): the letter sets the proviso out and states that under it an assessee can rectify the defects until the time the assessment order is passed, provided the delay in complying with the notice under s.139(9) is condoned by the Assessing Officer. From that the Board directed that in scrutiny cases where the assessee has already removed the defects specified under s.139(9), the Assessing Officer shall, before passing the assessment order under s.143(3), condone the delay in removing the defects and consider such returns as valid (para 2 of the letter). Second, on cases where the defect stands uncured: in pending cases where the defect specified under s.139(9) has not been rectified, the Assessing Officer is required immediately to initiate proceedings under s.144 by issuing a show-cause as per the first proviso to that section, after taking a view that the assessee has failed to make a return under s.139(1), s.139(4) or s.139(5). If the assessee rectifies the defect at any time up to the date of the assessment order, the case is to be dealt with in the manner set out in para 2 and the Assessing Officer is to proceed to pass an order under s.143(3). Where the defect is not removed by the time of passing the assessment order, the proceeding is to be concluded by an order under s.144 (para 3 of the letter). Third, the steps to be taken where the assessee has not responded to the s.139(9) notice at all: the Assessing Officer is to intimate the assessee of the defective status of the return and ask him to rectify the defects through the e-filing portal or to communicate it to the officer, initiating proceedings under s.144 at the same time; if the defects are removed, the return is to be treated as valid and the matter proceeded with accordingly; if they are not removed and the return remains invalid, the officer is to pass an order under s.144 as if no return had been filed by the assessee, all the steps prerequisite to an order under s.144 being followed scrupulously (para 4 of the letter). The letter is issued with the prior approval of the Member (IT&C), CBDT (para 5).
TaxSphere, “CBDT letter of 12 December 2017 on defective returns selected under CASS”, https://taxnotice.vittsphere.com/caselaw/case/cbdt-letter-12-december-2017-defective-returns-cass-144/ (validity last checked 2026-09-17)
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The officer declared your return invalid for non-payment of self-assessment tax and then assessed you under s.143(3) starting from the figures in that very return. Can he do both?
Neither your original nor your revised return carried the self-assessment tax. The officer ignored that and assessed you on the original return. Is the assessment good?
You missed the fifteen days on a s.139(9) notice and the officer has written back that your return is invalid. Is there anything left to do?
You never asked the Assessing Officer for more time, the return went invalid for want of proof of tax, and you have gone to the Commissioner under s.264. Will that work?
