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CMA Intermediate · Direct and Indirect Taxation · Filing of Return of Income

Ms. Priya's return for a tax year was held invalid because she did not rectify a defect in time. She rectifies the defect 20 days after the allowed period expired, but before the assessment is made. What is the position under section 263(7)?

Because she rectified the defect before the assessment was made, the Assessing Officer has the discretion to condone the delay and treat the return as valid. The validity is not automatic, nor is rectification barred after the allowed period.

  1. AThe return remains invalid because rectification after the period is never permitted
  2. BThe return becomes valid automatically without any action by the Assessing Officer
  3. CThe Assessing Officer may condone the delay and treat the return as validCorrect
  4. DShe must furnish an updated return, as the original cannot be revived

Explanation

Section 263(7)(c) says that where the defect is rectified after the allowed period but before assessment, the Assessing Officer may condone the delay and treat the return as valid. It is discretionary, not automatic, and not barred.

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