In a recent Notification No. 49/2010 dated 9 July 2010 (Notification) issued by the Central Board of Direct Taxes, modifying the permitted modes of filing return of income (ROI) for (i) companies and (ii) individuals and Hindu Undivided Families (HUF) which are liable for tax audit.

The Notification has come into effect from 9 July 2010. According to the Notification, companies (including foreign companies) which were earlier permitted to file ROI electronically without digital signature are now mandatorily required to file ROI electronically with digital signature for tax year 2009-10 onwards.

Individuals/ HUF liable for tax audit under section 44AB of the Indian Tax Laws (ITL), which earlier had an option to file ROI in either paper form or electronic form, are now mandatorily required to file ROI electronically (with or without digital signature) for tax year 2009-10 onwards.

The Notification curtails the permitted mode of filing ROI for (i) companies (including foreign companies) and (ii) individuals/ HUF which are liable for tax audit.

The ITL requires ROI of companies to be signed and verified by the Managing Director of the company. If there is no Managing Director or for any unavoidable reason the Managing Director is not able to sign and verify the ROI, any Director of the company can comply with the requirement. In case of foreign companies, the ITL permits the return to be signed and verified by a person who holds a valid power of attorney.

The amendment necessitates that the ROI of a company should be uploaded with digital signature. Foreign companies which are required to file ROI would need to note and comply with the new requirement. Incidentally, the compliance with digital signature would reduce the time involved in the process since, under this mode, there is no need to send a signed hard copy of verification to the Tax Authority by post.

Summary of the notification

The Notification amends Rule 12(3) of the Income Tax Rules which prescribes the various modes in which taxpayers are permitted to file ROI.

The permitted modes for filing ROIs for tax year 2009-10 onwards after the amendment are summarized in the table below, with comparative details of the pre-amended position:

Permitted modes of filing ROI Taxpayer
Companies, including foreign companies,(other than those carrying on charitable or other specified activities) Individuals/ HUF liable to tax audit
Old New Old New
Paper form (including barcoded ROI) No No Yes No
E-filing with digital signature Yes Yes Yes Yes
E-filing without digital Signature (SeeNote below) Yes No Yes Yes

Note

As per the current system, a ROI filed electronically without digital signature is required to be followed up with signed verification which is to be sent by ordinary post to Centralized

Processing Centre of the Tax Authority at Bengaluru within a period of 120 days from the date of e-filing.

There is no change in permitted modes for filing ROI by the following taxpayers:

Permitted modes of filing ROI Taxpayer
Firms/ LLP liable to tax

audit

Individuals/ HUF/Firms/ LLP not liable to tax audit and other taxpayers Taxpayers carrying on charitable or otherspecified activities
Paper form (including bar

coded ROI)

No Yes Yes
E-filing with digital signature Yes Yes No
E-filing without digital Signature Yes Yes No

Comments

The Notification curtails the permitted mode of filing ROl for (i) companies (including foreign companies) and (ii) individuals/HUF which are liable for tax audit.

The ITL requires ROl of companies to be signed and verified by the Managing Director of the company. If there is no Managing Director or for any unavoidable reason the Managing Director is not able to sign and verify the ROl, any Director of the company can comply with the requirement. In case of foreign companies, the ITL permits the return to be signed and verified by a person who holds a valid power of attorney.

The amendment necessitates that the ROl of a company should be uploaded with digital signature. Foreign companies which are required to file ROl would need to note and comply with the new requirement. Incidentally, the compliance with digital signature would reduce the time involved in the process since, under this mode, there is no need to send a signed hard copy of verification to the Tax Authority by post.

More Under Income Tax

Posted Under

Category : Income Tax (20780)
Type : Notifications (11666) Notifications/Circulars (24053)
Tags : HUF (40) Income Tax Notifications (6974) Tax Audit (227)

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