What If Return Filled in Wrong tax Form?  


What If Return Filled in Wrong tax Form?  

Many time people fails to understand the Wrong tax form of return to be use for particular assessee. And different heads of income. Sometimes people file return in wrong form and question arises Whether the form will be accept? Will the tax return be consider invalid? Generally, people may say so, that is not correct . Good thing is that income tax return filed in a wrong form cannot be invalidate automatically. I am writing here to provide solution to such tax problems arising due to filing tax form in wrong ITR. Rule 12 & Section 139of Income Tax Act Provides solution in this regard.

Requirements Of Rule 12 & Section 139 
Section 139 contains provisions about filing income tax return and Rule 12 of Income Tax Rules prescribes the types of income tax return. It states who must file the tax return and by when. It also states what is expect from a tax return filer and in what circumstances tax return may be consider defective as per section 139(9) of the Income Tax Ac. If the tax return is consider defective, the assessing officer must give him opportunity to rectify the defect. 
If we observe wordings of section 139(9), it nowhere contains the reference to filing of return in wrong form. This is what the Income Tax Authority may try to cit as an argument, but fortunately courts and Tribunals have given verdict on this aspect
Before I bring up those decisions , readers attention is drawn to a very interesting  provision u/s 292B which was introduc  by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10-1975. in the statute to safeguard the interest of taxpayer as well as tax authorities from unintended errors in filing return or furnishings statements or issue of notice or even passing order. As per the provision
Return Of Income, Etc., Not To Be Invalid On Certain Grounds.
 No Return Of Income, Assessment, Notice, Summons Or Other Proceeding, Furnished Or Made Or Issued Or Taken Or Purported To Have Been Furnished Or Made Or Issued Or Taken In Pursuance Of Any Of The Provisions Of This Act Shall Be Invalid Or Shall Be Deemed To Be Invalid Merely By Reason Of Any MistakeDefect Or Omission In Such Return Of Income, Assessment, Notice, Summons Or Other Proceeding If Such Return Of Income, Assessment, Notice, Summons Or Other Proceeding Is In Substance And Effect In Conformity With Or According To The Intent And Purpose Of This Act.
Thus , mistake in selecting the return is one which will be cover u/s 292B and it  not be invalid merely on ground of a wrong ITR form. Legislature have used the word “any mistake” which is wide enough to include mistake in selection of appropriate income tax form.
Case Laws on Wrong Income Tax Forms
  1. Madras High Court in CIT vs Royal Textiles [1979] 120 ITR 506 (MAD.)quoted the decision for the relevant assessment year the assessee-firm filed a return in Form No. 3 on 10-3-1968 on which the ITO made a provisional assessment under section 141 and issued a demand notice. Subsequently, the ITO asked the assessee to file the return in Form No. 2, which the assessee duly complied on 15-10-1970. The ITO after completing the assessment. Charged interest under section 139(1) for the period upto the date of filing the original return. Subsequently, on the basis of revenue audit report. The Additional Commissioner by invoking powers under section 263, directed the ITO to charge interest upto the date of filing the second return. On appeal, the Tribunal held that it was not justifiable for the department. To charge interest under section 139(1) for the period beyond 10-3-1968, after making a provisional assessment. On the basis of the return submitted on the date. It was also held that it was not open to the department to content that the said return is invalid and that interest should be charge for the period subsequent to 10-3-1968.
The Madras High Court , concluded that even an “invalid” return or a return in a wrong form was a proper return. If in a case where the assessee filed the return in a wrong form prescribed by a different statute. That return cannot say to be a non-existent return, the position would be a same where the assessee files a return by using a wrong form prescrib by the same statute.
  1. Second decision in this regard is of Kolkata High Court in Mohindra Mohan Sirkar vs ITO [1978] 112 ITR 47 (CAL.)held in favour of assessee.
  2. ITAT Mumbaiin case of Morgan Stanely Asset Managment Inc vs DCIT, Spl. Range 12 [33 SOT 452 (MUM.)] was declaring with a case where the main issue was not properly filling up the return form and based on that basis , the return was termed as invalid by the A.O. CIT (A) confirmed the assessment  order , but found the return invalid on ground that. The power of attorney is not attached in original as section 140C of the Income Tax Act.

One of the issue dealt in para 43 of the order was whether a return filed in wrong. Form be is invalid ab initio. It ruled that a tax payer is not allow to file any return of his/her choice. But if a wrong form is file it will be almost defective. And an opportunity to rectify the said defective must be give to assessee.

Conclusion Is:

  1. Anincome tax return filed by an assessee is not invalid return , but at best defective.
  2. The provision  u/s 292B of the Income Tax Act protects assessee for any mistake in filing of tax return.
  3. The A.O must give opportunity to assessee for rectifying any mistake in filing of return as per section 139(9) of the Income Tax Act.


Madhu Shahu – Guest Article Writer…