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Case study-3 Section 139(5) & Section 144

sandeep Gupta (Director) (63 Points)

17 April 2009

A notice u/s 142(1) was served by AO on an assessee on account of his failure to file his return of income within the time limit prescribed u/s 139(1). Since assessee failed to file return of income within the time limit prescribed in the notice, AO completed tthe assessment u/s 144 . However before assessment order could be served on the assessee, he filed a belated return u/s 139(5). AO ignored the return filed and served the assessment order on the assessee. Is action of AO justified?

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Ashish M (Chartered Accountant) (2731 Points)
Replied 18 April 2009

First of all, let me tell u, belated return is filed u/s139(4). u/s139(5) a revised return is filed.......

now.

in ur case, the assessee failed to file the return u/s139(1) as well as within the time priod allowed u/s142(1). this leads to the fact that teh return is not filed at all......thereafter, the AO made the assessment u/s144 but before serving to the asssess teh ordrer, the assessee filed the return.........

As per Sec.139(4), belated return can be filed before the end of the relevant assessment yr or completetion of assessment........here the expession 'completion of assessment' means 'passing or signing of the order.

hence it is irrelevant when the order is served, the time of filinig u/s139(4) elapses as soon as the order u/s144 is passed(Signed) and not when it is served...............and YES THE AO IS JUSTIFIED.