Before the end of the month the division was transferred back to the 40th Army. By now Army Group South was well into its counteroffensive and by March 17 the Army was threatened with encirclement between Sumy and Belgorod. Under the circumstances 40th Army had little option but to retreat, giving up Belgorod in the process. The German offensive shut down shortly thereafter. Colonel Tsukarev handed his command over to Lt. Col. Viktor Ivanovich Rutko on May 11; this officer would be promoted to the rank of colonel on June 18. In early May the "STAVKA" made its decision to stand on the defensive within the Kursk salient which was occupied by the Central and Voronezh Fronts. The new commander of the latter, Army Gen. N. F. Vatutin, reported as follows on May 11:40th Army, commanded by Lt. Gen. K. S. Moskalenko, was assigned a front 50 km wide between 38th and 6th Guards Armies. At the outset of the battle the 206th was in the first echelon with the 217th, 219th and 100th Rifle Divisions. It was due to become part of the 47th Rifle Corps but this did not occur until after the German offensive began.