Burden to call for curing of defects in tax return on assessing officer: SC
The Supreme Court on Tuesday stated that if a tax return is defective, it is up to the officer to inform the assessee to correct the defects and if the officer fails to do so, the return cannot be called defective.
“Ascertaining the defects and intimating the same to the assessee for rectification are within the realm of discretion of the assessing officer. It is for him to exercise discretion. The burden is on the assessing officer. If he does not exercise the discretion, the return of income cannot be construed as a defective return,” the Bench of Justices BV Nagarathna and Ujjal Bhuyan said.The question before the bench was whether the reopening of a concluded assessment, that is, reassessment under Section 147 of the Income Tax Act, 1961 (the Act) following the issuance of notice under Section 148 of the Act is legally sustainable or is bad in law.
In this case, a partnership firm, at the relevant time for three assessment years (1990-91, 1991-92, and 1992-93), while filing returns had not filed a balance sheet/regular books of account because of a search and seizure operation by the Revenue.