Updated Return under Section 139(8A)

Explore the provisions of updated return under Section 139(8A) of the Income Tax Act, including eligibility, conditions, and scenarios where it can be filed. Understand the implications for reducing total tax liability, increasing refunds, and carrying forward losses. Get insights into the circumstances in which an updated return cannot be furnished, ensuring compliance with income tax regulations.

1. Option to furnish updated return: Any person may furnish an updated return of his income for the previous year relevant to the assessment year at any time within 24 months from the end of the relevant assessment year.

This is irrespective of whether or not he has furnished original return under section 139(1) or belated return under section 139(4) or revised return under section 139(5) for that assessment year.

For example, an updated return for A.Y. 2023-24 can be filed till 31.3.2026.

2. Non applicability of the provisions of updated return: The provisions of updated return would not apply, if the updated return of such person for that assessment year –

(i) is a loss return; or

(ii) has the effect of decreasing the total tax liability determined on the basis of return furnished under section 139(1) or section 139(4) or section 139(5). For example if Mr. A has filed his ITR for AY 22-23 declaring his total income tax liability of Rs. 1,00,000 and if he wants to updated his ITR for AY 22-23 then he can’t decrease his income tax liability of Rs. 1,00,000 by filling an updated return. ; or

(iii) results in refund or increases the refund due on the basis of return furnished under section 139(1) or section 139(4) or section 139(5). For example if Mr. B has filed his ITR for AY 22-23 by claiming total income tax refund of Rs. 1,00,000 and if he wants to updated his ITR for AY 22-23 then he can’t increase his income tax refund of Rs. 1,00,000 by filling an updated return. And also ITR earlier filed with income tax liability can’t be converted into income tax refund later on by filling an updated return.

3. Updated return can be filed if original return is a loss return and updated return is a return of income: If any person has a loss in any previous year and has furnished a return of loss on or before the due date of filing return of income under section 139(1), he shall be allowed to furnish an updated return if such updated return is a return of income.

For example, if Mr. C has furnished his return of loss for A.Y. 2022-23 on 31.7.2022 consisting of Rs. 2,00,000 as business loss, he can furnish an updated return for A.Y. 2022-23 upto 31.3.2025, if such updated return is a return of income.

4. Cases when an updated return to be furnished for subsequent previous year also – If the loss is being carried forward or unabsorbed depreciation carried forward or MAT/AMT tax credit carried forward is to be reduced for any subsequent previous year as a result of furnishing of updated return of income for a previous year, an updated return is required to be furnished for each such subsequent previous year.

For example, if Mr.D has furnished his return of loss for A.Y. 2022-23 on 31.7.2022 consisting of Rs. 2,50,000 as business loss, he can furnish an updated return for A.Y. 2022-23 upto 31.3.2025. Later on he realised that during A.Y. 2022-23 he has claimed excess loss in his ITR and he files his updated return on 15.01.2025 to update ITR of A.Y. 2022-23 by reducing his losses then subsequent ITRs i.e. ITR of A.Y.2023-24 & ITR of A.Y. 2024-25 which he has already filed will be liable for updation because reduction in carry forward of losses in A.Y. 2022-23 will also affect A.Y. 2023-24 and A.Y. 2024-25.

a. Circumstances in which updated return cannot be furnished: No updated return shall be furnished for the Assessment Year relevant to the Previous Year in which the search is initiated or survey is conducted, or requisition is made and for any Assessment Year preceding such assessment year in the following scenarios –

In case of a person

• • Where a search has been initiated under section 132 or books of account or other documents or any assets are requisitioned under section 132A .
  • Where a survey has been conducted under section 133A (other than survey conducted in relation to TDS or TCS)
  • Where a notice has been issued to the effect that:

– any money, bullion, jewellery or valuable article or thing, seized or requisitioned under section 132 or section 132A in case of any other person belongs to such person; or

– any books of account or documents, seized or requisitioned under section 132 or section 132A in the case of any other person, pertain or pertains to, or any other information contained therein, relate to, such person.

b. Circumstances in which updated return cannot be furnished: No updated return shall be furnished for the Assessment Year relevant to the Previous Year in the following scenarios –

• • Where a person has already furnished an updated return under this sub-section for the relevant assessment year i.e an updated return for any assessment year can’t file twice.
  • Where any proceeding for assessment, reassessment, recomputation, or revision of income under this Act is pending or has been completed for the relevant assessment year.
  • Where the Assessing Officer has information in his possession for the relevant assessment year in respect of a person under the Smugglers, and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 or the Prohibition of Benami Property Transactions Act, 1988 or the Prevention of Money-laundering Act, 2002 or the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 and the same has been communicated to him, prior to the date of furnishing of updated return.
  • Where information for the relevant assessment year has been received under an agreement referred to in section 90 or section 90A in respect of such person and the same has been communicated to him, prior to the date of furnishing of updated return.
  • If any prosecution proceedings under the Chapter XXII have been initiated for the relevant assessment year in respect of a person prior to the date of furnishing of return under this sub-section.

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(The author is practicing chartered accountant and can be reached out at ca.atif95@gmail.com, Mobile- 9811270863)

DISCLAIMER:- This Blog is for the purposes of information / knowledge and shall not be treated as solicitation in any manner or of for any other purposes whatsoever.