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

Under section 263(7), the Assessing Officer intimates a defect in Anil's return and Anil does not rectify it within the fifteen days allowed or any extension. He rectifies it later, before the assessment is made. What is the position?

The return is invalid after the period lapses, but because Anil rectified the defect before assessment, the Assessing Officer may condone the delay and treat the return as valid. This is discretionary, not automatic, and the return is not a revised return.

  1. AThe return remains permanently invalid and cannot be treated as valid
  2. BThe return becomes invalid, but the Assessing Officer may condone the delay and treat it as validCorrect
  3. CThe return is automatically valid because rectification was before assessment
  4. DThe return is treated as a revised return

Explanation

If the defect is not rectified within the allowed period, the return is invalid as if no return were furnished. However, section 263(7)(c) lets the Assessing Officer condone the delay and treat it as valid if rectification occurs before assessment. Condonation is discretionary, so automatic validity is wrong.

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