Section 139(9) Explanation

Section 139(9) Explanation — the law in short

What the courts have decided on section 139(9) Explanation, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Reddy Vanga Ventures LLP v PCIT High CourtHelps taxpayerNo later treatment found
  The officer declared your return invalid for want of an audit report when your turnover was below the audit threshold. What is the remedy?
  The High Court quashed the orders invalidating the return and the order in revision, and remitted the matter to the Assessing Officer to re-examine the turnover. Where the record, including the officer's own finding, showed that the turnover was below the threshold at which audit is required, the premise on which the return had been held defective under s.139(9) did not stand.
• Sudhir Sareen v CIT High CourtHelps departmentNo later treatment found
  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?
  No. The Delhi High Court held that the power to extend time and to condone the delay in rectifying a defect under s.139(9) is conferred on the Assessing Officer, and the Commissioner in revision under s.264 is not the forum in which to ask for it for the first time. Where the assessee had not applied to the Assessing Officer at all, no fault could be found with the officer's order or with the Commissioner's refusal.
• Kerala State Bamboo Corporation Ltd v CIT High CourtHelps taxpayerNo later treatment found
  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?
  Yes. The proviso to s.139(9) lets the Assessing Officer condone the delay and treat the return as valid where the defect is cured after the fifteen days but before the assessment is made. The Kerala High Court held that the consequence of invalidity does not bite until the assessment is completed or the time for completing it runs out, so a cure filed before that date can still be accepted, and an application seeking reconsideration must be dealt with as a petition under the proviso even if it is not labelled one.
• Murali Export House v CIT High CourtHelps taxpayerNo later treatment found
  The accountant's certificate for the s.80HHC claim was prepared but never attached to the return. Is the deduction gone?
  No. The Calcutta High Court, following its earlier decision in Rai Bahadur Bissesswarlal Motilal, held that the defects listed in the Explanation to s.139(9) are illustrative and not exhaustive, and that the Assessing Officer retains the power to have a defect made good before the assessment is completed. The Court set aside the orders below and directed the deduction to be allowed provided the certificate was filed within two months.
• CIT v Rai Bahadur Bissesswarlal Motilal High CourtHelps taxpayer
  Is the list of defects in the Explanation to s.139(9) a closed list, so that the officer cannot call anything else a defect?
  No. The Calcutta High Court held that the defects specified in s.139(9) are illustrative and not exhaustive. The corollary is the one that helps the taxpayer: because the provision is a curative one, an omission such as the audit report of a trust not being filed with the return can be made good during the assessment proceedings, and the officer cannot then ignore the report or the return.
• Kapoor Industries Ltd v CPC ITATHelps taxpayerNo later treatment found
  You asked for seized cash to be adjusted against your self-assessment tax and the CPC simply refused the credit. Should it have issued a s.139(9) notice instead?
  The Tribunal allowed the appeal and directed that the money lying seized be appropriated towards the self-assessment tax liability. It recorded that no notice under s.139(9) had been issued by either the CPC or the jurisdictional Assessing Officer treating the return as defective, and that the assessee's request having been neither rejected nor decided amounted to acceptance.
• PME Power Solutions India Ltd v DCIT ITATHelps taxpayerNo later treatment found
  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?
  No. The Tribunal held that once a return is treated as defective and invalid under s.139(9), the only recourse legally available to the Assessing Officer is to frame the assessment under s.144. An assessment under s.143(3) built on the income returned in a return the officer has himself declared invalid cannot stand, and the Tribunal quashed it.
• Niranjan Lal Gupta v ITO ITATCuts both waysNo later treatment found
  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?
  No. The Tribunal held that both returns were defective under s.139(9) because the self-assessment tax had not been paid, that the Assessing Officer should have directed the assessee to rectify the defect and had issued no defect notice at all, and that the assessment could not simply be built on the original return. The entire assessment was set aside and the officer directed to pass a fresh order under s.144.
• Gram Sewa and Viklang Shayta Sanstha v DCIT ITATHelps taxpayerNo later treatment found
  The trust's Form 10B did not go with the return and the exemption has been refused. Does filing it in answer to the s.139(9) notice save the claim?
  Yes. The Tribunal held that the authorities were not justified in refusing the exemption under s.11 where the assessee had filed the audit report in answer to the defect notice under s.139(9) and before the assessment proceedings were completed. A highly technical view of the timing defeats the purpose of the requirement where substantive compliance has been made.
• Shree Jagdamba Emery Stone v ITO ITATHelps taxpayerNo later treatment found
  The officer refused you firm status because a document was missing that the Explanation to s.139(9) does not mention. Was he entitled to do that without giving you a chance to put it right?
  No. The Tribunal held that the enumeration of defects in the Explanation below s.139(9) is not exhaustive but only illustrative, so a document the Explanation does not name can still be a defect; but precisely because it is a defect within s.139(9), the assessee must be given the opportunity to rectify it before the consequence is visited on him. The department could not deny firm status on a defect outside the Explanation without first offering that opportunity.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.