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

Rekha's return for a tax year was found defective by the Assessing Officer, who intimated the defect to her. Under section 263(7), which course is correct?

She has fifteen days from the date of intimation, or a longer period allowed on her application, to rectify the defect. If she fails, the return is treated as invalid and the Act applies as if she had not filed, although the officer may condone delay before assessment.

  1. AShe has 15 days from the intimation, or a further period allowed on application, to rectify; failing this the return is treated as invalidCorrect
  2. BShe has 30 days from the intimation, after which the return is invalid
  3. CThe return is invalid immediately on intimation, with no chance to rectify
  4. DShe has 15 days, after which the return is always valid with a penalty

Explanation

Clause (a) gives fifteen days from the date of intimation, or a further period allowed on her application. Under clause (b), if not rectified within that time, the return is invalid and treated as if no return had been furnished. Clause (c) allows the officer to condone delay if rectification occurs before assessment.

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