Explanation on Section 139(8A) of Income Tax Act 1961

Section 139(8A) was introduced by Finance Act 2022 and was applicable from 1.4.2022. If we remember in past a belated return u/s Section 139(4) could be filed within one year from the end of assessment year or completion of assessment whichever is earlier. This position was there till Assessment Year 2016-17.  From Assessment year 2017-18 to 2020-21  a belated return could be filed before the end of assessment year or completion of assessment whichever is earlier. From assessment year 2021-22 this position was again changed and now a belated return can be filed  till 31^st December of the relevant assessment year or completion of assessment whichever is earlier.

Section 139(5) provides for filing of revised return. Till Assessment year 2016-17 if a person after filing return u/s 139(1) discovers any wrong statement or omission in the Income Tax return he could revise the return u/s 139(5) and time to revise the return was same as for filing belated return i.e one year from the end of assessment year or completion of assessment whichever is earlier. From assessment year 2017-18 even those persons who have filed return u/s 139(4) were allowed to file revised return and time limit was within one year from end of assessment year or completion of assessment whichever is earlier.  This period was reduced to end of assessment year or completion of assessment whichever is earlier from assessment year 2018-19 to 2020-21.  Now from Assessment Year 2021-22 the time to file revised return is further reduced to nine months i.e. 31^st December of assessment year or completion of assessment whichever is earlier.

Since the Government has reduced the time to file belated and revised returns till 31^st December of relevant year, the Government provided a window in the form of Section 139(8A)  to allow an opportunity to those person who could not file their returns or  after filing return discovers any wrong statement or omission and time to file belated/revised return is over, they can come forward and file their returns u/s 139(8A). This section is very important and can be considered as an Amnesty Scheme in Income Tax Act and an opportunity to those persons who have missed to file return or have omitted some income, may be due to any reason to come clean. The section provides that an updated return can be filed within 24 months from end of assessment year. At present a person can file updated returns for three years i.e. for assessment year 2020-21, 2021-22 and 2022-23.

What can’t be done and who can’t file updated return u/s 139(8A)

1. The income can’t be reduced by filing updated return.

2. A return reducing the loss can’t be filed. However return of loss if converted into return of income can be filed.

3. Refund can’t be claimed even if excess tax is paid.

4. This section can’t be used by those persons in whose case search and seizure proceedings are already conducted or survey has taken place. If a search is conducted on 25.11.2022 then updated return cannot be filed for Assessment Year 2023-24 or any earlier year.

5. Updated return cannot be filed after filing updated return.

6. If any proceeding related to assessment/reassessment or revision is pending or completed, then updated return can’t be filed for that year.

7. If any notice is issued under Prevention of Money Laundering Act 2002, Black Money (Undisclosed Foreign Income and Assets) and Imposition Act 2015, Prohibition of Benami Property Transactions Act 1988 or Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act 1976 to such person before filing of updated return, then updated return can’t be filed.

8. Information for relevant assessment year is received under an agreement referred to in Section 90 or 90A and is communicated to him before the filing of updated return.

9. Any prosecution proceedings have been initiated for the relevant assessment year prior to filing of updated return.

10. He is a person or class of persons, as may be notified by CBDT.

Payment of tax under updated return.

Section 140B provides the calculation of tax on updated return explained as under :

1. The additional income tax payable as per updated return must of paid u/s 140B before filing updated return, otherwise the return shall be considered as defective.

2. The tax liability is on additional income only in case income tax return was filed and on total income in case updated return is filed and no return was filed earlier.

3. Credit of prepaid taxes is allowed like advance tax, TDS, TCS AMT credit/MAT Credit and relief of tax claimed u/s 89/90/90A/91. Credit of Self Assessment tax paid u/s 140A is not allowed. However the same must be treated as paid u/s 140B.

4. If no return was filed earlier then interest u/s 234A, 234B & 234C shall be calculated on the basis of total income as declared in updated return.

5. Those persons who have already filed return earlier shall not be liable to pay interest u/s 234A on additional tax.

Additional Tax under Updated Return

1. If updated return is furnished before completion of 12 months from end of relevant assessment year then 25% of net aggregate of tax plus surcharge plus cess and interest and late fee u/s 234F.

2. If updated return is furnished after the expiry of 12 months but before completion of 24 months from the end of relevant assessment year then 50% of net aggregate of tax plus surcharge plus cess and interest and late fee u/s 234F.

In my personal opinion anyone who has a doubt regarding any income missed in ITR due to any reason must come forward and pay balance tax by using this mode. Now a day’s information about income is available in Annual Information Statement. Updated return for AY 2020-21 shall also become time barred after 31^st March 2023. We all must follow PAY TAX KARO RELAX.