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CMA Final · Direct Tax Laws and International Taxation · Return of Income

A person receives an intimation that his return under section 263 is defective. He rectifies the defect 20 days after the intimation, with no extension sought, and before the assessment is made. What is the consequence under sub-section (7)?

The return is invalid after the fifteen-day period lapses, but because the defect was rectified before assessment, the Assessing Officer may condone the delay and treat it as a valid return. Validity is at the officer's discretion, not automatic.

  1. AThe return is permanently invalid and treated as never filed
  2. BThe return becomes valid automatically as the assessment is not yet made
  3. CThe return is invalid, but the Assessing Officer may condone the delay and treat it as validCorrect
  4. DThe return is valid, but a revised return must be filed

Explanation

The rectification period is fifteen days. Rectifying after that period makes the return invalid under clause (b). However, clause (c) lets the Assessing Officer condone the delay and treat it as valid if the defect is rectified before assessment. The result is therefore discretionary, not automatic.

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