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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 the return of Sundaram & Co to the assessee. The defect is not rectified within the fifteen days allowed or any extension, but the assessee rectifies it later, before assessment is made. What is the position?

The Assessing Officer may condone the delay and treat the return as valid. Under section 263(7)(c), if the defect is rectified after the allowed period but before assessment, condonation is possible, though it is discretionary and not automatic.

  1. AThe return is permanently invalid and cannot be treated as valid
  2. BThe return is automatically valid from the date of original filing
  3. CThe Assessing Officer may condone the delay and treat the return as validCorrect
  4. DThe assessee must furnish an updated return instead

Explanation

Clause (b) treats the return as invalid if the defect is not rectified in the allowed period. Clause (c) allows the Assessing Officer, where rectification occurs after that period but before assessment, to condone the delay and treat it as valid. The treatment is discretionary, not automatic.

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