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Facts
The assessee filed a return under Section 139(4) for AY 2021-22, which was considered defective by CPC for not filing a tax audit report. Subsequently, an updated return was filed under Section 139(8A). The CPC processed the updated return, raising a demand, and the CIT(A) dismissed the appeal.
Held
The Tribunal held that the initial return filed under Section 139(4) was valid and should be processed. Consequently, the updated return filed under Section 139(8A) should be ignored as it was filed as a remedial action after the rejection of the first return.
Key Issues
Whether the initial return filed under Section 139(4) was valid and whether the updated return filed under Section 139(8A) should be ignored.
Sections Cited
143(1), 139(9), 250, 44AB, 139(8A), 140B, 154, 143(1)(a)
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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI AMIT SHUKLA, JM & SHRI ARUN KHODPIA, AM
Assessee by : Shri. Vijay Mehta, AR. Revenue by : Shri Annavaram Kosuri, Sr. DR Date of Hearing 16.12.2025 : Date of Pronouncement : 29.12.2025 O R D E R Per Arun Khodpia, AM:
The present appeal is filed by the assessee, challenging the order passed by the learned ADDL/JCIT (A), Prayagraj (for short “ld.CIT(A)” On 30.06.2025 for the assessment year 2021-22, arising from the intimation passed by Central Processing Centre (CPC), Bengaluru (The Ld. AO) under section 143(1) of the Income Tax Act, 1961 (for short “The Act”) dated 24/12/2022.
The Ld. JCIT(A) has erred in confirming the validity and correctness of the intimation u/s. 143(1) of the Act raising demand amounting to Rs. 15,51,835/- without appreciating that tax and interest have not been correctly calculated.
The Ld. JCIT(A) has erred in not holding that intimation passed u/s. 143(1) of the Act is not as per the provisions of the law in as much as the credit for the tax paid by the appellant has not been correctly granted.
3. The Ld. JCIT(A) has erred in passing order u/s 250 of the Act in limine and confirming the demand raised by Ld. A.O. without going into the merit of the case.
4. The appellant craves leave to add to, amend, alter or delete all or any of the foregoing grounds of appeal
. Additional Ground of appeal
1. The Ld. JCIT(A) ought to have held that the return of income filed by the assessee on 29.03.2022 has been wrongly rejected vide intimation dated 24.12.2022 u/s. 139(9) of the Act by CPC.
2. The Ld. JCIT(A) ought to have held that the return filed on 29.03.2022 was a valid return and, accordingly, updated return of income on 29.03.2023 ought to have been ignored.
3. The Ld. JCIT(A) has erred in not holding that the modified calculation of taxes made by CPC was not within the scope of prima facie adjustment u/s.143(1)(a) of the Act.
4. The Ld. JCIT(A) also ought to have held that the order passed u/s. 143(1)(a) of the Act, without giving any opportunity of hearing, is invalid and bad in law.
In the instant case, the assessee filed his return of income u/s 139(4) of the Act for the AY 2021-22 on 29.03.2022, declaring total income at Rs. 1,83,08,900/- , which was considered as defective by the CPC vide defect notice dated 11.04.2022, stating that the assessee is liable for Audit U/s 44AB, however, had not filed form 3CA-3CD / Form 3CB-3CD to be complied before 23.04.2022. In response, assessee to which furnished a response on 11.04.2022, clarifying that the assessee is not liable to Tax Audit for AY 2021-11, as per provisions of section Devang Yogesh Mehta 44AB(a), as his Turnover of Rs. 6.33 crore is less than the prescribed limit of Rs. 10 Crore and assessee fall in this category, as he did not receive or paid more than 5% of turnover / expenditure during the relevant year. Such response of the assessee was not taken into consideration by the CPC, but has intimated the assessee on 24/12/2022 that, “Since, the defects were not rectified, as per provisions of section 139(9) of the Act, the return of assessee filed on 29-03-2022 vide ack no. 47412356029032022 is, therefore, treated as INVALID.”
To regularize the returned income, assessee as an alternative remedy filed an updated return u/s 139(8A) on 29.03.2023 with payment of additional 25% tax u/s 140B of the Act amounting to Rs.2,21,038/-, over and above the regular taxes paid. The income declared remain same in the Updated Return also at Rs.1,83,08,900/-. The updated return of the assessee was processed u/s 143(1) of the Act on 30/12/2023 and a demand of Rs. 15,51,835/- on account of working mismatch of tax liability computation and taxes paid was raised.
The matter carried before Ld. CIT(A), but the appeal of assessee has been dismissed in limine, stating that the assessee had already applied for rectification u/s 154 before filing the appeal against the intimation u/s 143(1) dated 30/12/2023, thus, can file an appeal directly against the order u/s 154.
Devang Yogesh Mehta 6. Simultaneously, the appeal of assessee against the order of defect dated 24.12.2022, declaring return of income of assessee filed u/s 139(4) to be non-est, was disposed-off in favour of the assessee vide order dated 11/11/2025 by ADDL/JCIT(A), Prayagraj, concluding that the return of assessee filed u/s 139(4) on 29.03.2022 cannot be treated as non-est, without considering the assessee’s reply dated 11.04.2022, only on account of a small mistake that assessee ticked ‘YES’ instead of ‘NO’ for applicability of Tax Audit. The CPC accordingly directed not to treat the ITR for AY 2021-22 as invalid ITR and process the same as per Act.
In backdrop of the aforesaid facts, Ld. Authorized representative (in short “ld. AR”) of the assessee submitted that return filed by the assessee u/s 139(4) dated 24.12.2022, should be termed as a valid return and intimation passed for rejection of the said return treating the same as invalid is liable to be set-aside.
Consequently, the next return filed by the assessee as alternative remedy u/s 139(8A) on 29.03.2023 ought to have been ignored.
Ld. Sr. DR on the other hand supported the order of Ld. CIT(A).
We have considered the rival submissions and perused the material available on records. The issue herein had already been addressed by the Ld ADDL/JCIT(A), Prayagraj vide order dated 11/11/2025 in assessee’s own case by 4 Devang Yogesh Mehta validating the return filed u/s 139(4) dated 24.12.2022 and CPC is directed to process the same, by examining the facts and holding that the assessee is not liable to get his accounts audited u/s 44AB, having turnover less than Rs. 10 Crore, thus not falling within the scope of provisions of tax audit as explained supra. Since the first return dated 24.12.2022, filed by the assess has been validated and there left no dispute on that aspect by the either side, the alternative updated return u/s 139(8A) filed by the assessee on 29.03.2023, as a remedial action on rejection of the first return dated 24.12.2022 along with protesting the rejection through rectification u/s 154 as well as by appeal before the First Appellate Authority, should be ignored. Once the assessee’s first return is held as valid return and has been directed to be processed under the mandate of law, the alternative return need not be acted upon, the same otherwise tantamount assessing the same income of assessee twice at two fronts, which is not permissible as per law. We, therefore, concur with the request of assessee that the updated return dated 29.03.2023 should be ignored and treated as non-est. On this preposition there was no objection by the revenue. We thus direct the ld. AO to consider the assessee’s first return dated 24.12.2022 as valid return, which shall be processed as per law.
Ignore the updated return filed on 29.03.2023 as well as any proceedings initiated thereupon, which are at nullity being based on a non-est document.
After our aforesaid decision, the other contentions raised by the assessee qua the validity of order passed u/s 143(1)(a) without giving opportunity to the 5 Devang Yogesh Mehta assessee or whether the prima facie adjustment made by the CPC are permissible within the scope of section 143(1)(a), are rendered as academic only and need not to be adjudicated separately.
In result the appeal of assessee stands allowed in terms of our aforesaid observations.
Order pronounced in the open court on 29-12-2025.