CA Prasanth Srinivas

CA Prasanth Srinivas

The articles explains the provisions related to filing of Income Tax Return for Financial Year 2015-16 , Carry forward of loss from business specified u/s 35AD (i.e. businesses in respect of which certain capital expenditure are deductible), Provisions related to filing of Belated Return and Changes in Provisions related to Filing of Revised Return.

1. Returns by Individuals / HUF / AOP / BOI and AOP

Effective dateProviso to Section 139(1) amended with effect from Assessment Year 2017 – 18
Existing provisionThe above category of persons shall furnish return of income if their total income exceeds the basic exemption limit. While calculating total income for this purpose, deductions / exemptions u/s 10A, 10B, 10BA and 80C to 80U shall not be adjusted.
Effect of the above amendmentTo the list of items not to be reduced from total income, long term capital gain on listed securities etc. exempt u/s 10(38) is also included. As a result, the above persons shall be required to file return of income if total income before adjusting deductions / exemptions u/s 10(38), 10A, 10B, 10BA and 80C to 80U exceeds the basic exemption limit.
Author’s noteBig players in stocks earning exempt long term capital gains appear to be liable to file returns of income.

2. Carry forward of loss from business specified u/s 35AD (i.e. businesses in respect of which certain capital expenditure are deductible)

Effective dateSection 139(3) amended with effect from Assessment Year 2016 – 17
Existing provisionSection 139(3) lists out certain category of losses which can be carried forward only if the concerned loss return is filed within the due date u/s 139(1). Loss from a business specified u/s 35AD referred to in Section 73A(2) was not there in this list. Therefore losses from such businesses were eligible for carry forward even if loss return was not filed on time.
Effect of the above amendmentSection 139(3) is now amended to cover Section 73A(2). As a result, hence forth, in order to avail of carry forward of loss from a business specified u/s 35AD, return of loss must be filed within the due date u/s 139(1).
Author’s noteThe amendment has no effect vis-a-vis carry forward of Sectzon 35AD losses computed up to assessment year 2015-16.

3. Shorter time limit to file belated return

Effective dateSection 139(4) amended with effect from Assessment Year 2017 – 18
Existing provisionAny person who has not furnished the return of income within the due date u/s 139(1) or within the time allowed in the notice u/s 142(1) can furnish the return within 1 year from the end of the assessment year or before the completion of assessment, whichever is earlier.

E.g.: Mr. X fails to file return of income for the year ended 31.03.2016 (i.e. AY: 2016 – 17) within the due date u/s 139(1), i.e. 31.07.2016. Under the existing provision, he can file the belated return at any time on or before 31.03.2018 or before the completion of assessment, whichever is earlier.

Effect of the above amendmentThe above provision is now amended. As per the amended provision, any person who has not furnished a return within the time allowed to him u/s 139(1) can file a belated return at any time before the end of the assessment year or before the completion of assessment, whichever is earlier.

E.g.: Mr. Y fails to file return of income for the year ending 31.03.2017 (i.e. AY: 2017 – 18) within the due date u/s 139(1), i.e. 31.07.2016. Under the amended provision, he can file the belated return at any time on or before 31.03.2018 or before the completion of assessment, whichever is earlier. (i.e. return must be filed within the assessment year)

Author’s note

i. There is no reference in the amended sub-section to a case falling u/s 142(1).

ii. The amendment has no impact on belated returns due for assessment years up to 2016 – 17. These can be filed within 1 year from the end of the assessment year, as the case may be.

iii. The readers are also requested to go through the next paragraph relating to filing of revised return.

4. Filing of revised return – even belated return can be revised

Effective dateSection 139(4) amended with effect from Assessment Year 2017 – 18
Existing provisionOn account of omission or wrong statements, return filed u/s 139(1) or return filed pursuant to notice u/s 142(1) can be revised within one year from the end of the assessment year or before the completion of assessment, whichever is earlier. That is to say, belated return u/s 139(4) cannot be revised. The position is clarified by the Supreme Court in Kumar Jagdish Chandra Sinha Vs. CIT reported in (1996) 86 Taxman 122 (SC) .
Effect of the above amendmentThe above provision is now amended. As per the amended provision, any person, having furnished a return u/s 139(1) or 139(4), discovers any omission or wrong statement in the return, he can furnish revised return at any time before the expiry of one year from the end of the assessment year or before the completion of assessment, whichever is earlier.
Author’s note

i. Henceforth, even belated returns can be revised

ii. There is no reference in the amendment to a case falling u/s 142(1).

iii. For assessment years up to 2016 – 17, revised return can be filed only if original return is filed within the due date u/s 139(1)

iv. Though belated return has to be filed within the assessment year, time limit for filing revised return remains the same (i.e. one year from the end of the assessment year). This, read along with the fact that belated return can be revised, provides some respite to tax payers.

5. Defective return – non payment of self assessment tax

Effective dateSection 139(9) amended with effect from Assessment Year 2017 – 18
Existing provisionA return of income shall be treated as defective if self assessment tax due along with interest is not paid on or before the date of filing of the return.
Effect of the above amendmentA return of income, otherwise valid , would not be treated as defective merely because self assessment tax due along with interest is not paid on or before the date of filing of the return
Author’s noteThe old provision stands for periods till assessment year 2016-17

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