In practice in spite of reminders, many of our clients do not file Return of Income within the time specified u/s 139 (1) or before the end of relevant assessment year.
Provisions of section 139(4) allow to file Return of Income, before the expiry of the relevant assessment year.
Considering the provisions of section 139(1)/139(4), we can rule out the following possibilities of filing of Return of Income.
|1||139(1)||Within due date of filing
|It is always better to file Return of Income in time to avoid litigations.||Prosecution u/s 276CC cannot be initiated|
|2||139(1)||Within the time extended by CBDT
(For AY 2020-21 time extended by CBDT till 30th November, 2020)
|Filing of return within the extended time is a return filed as good as within the time frame u/s 139 (1) i.e. all the advantages are available such as revision u/s 139 (5). C/f of losses etc.||Prosecution u/s 276CC cannot be initiated|
|3||139(4)||After the due date u/s 139 (1) but before the end of the relevant assessment year||Advantages not available i.e. C/f of losses not allowed (except depreciation loss). Revision not allowed. However this return is not barred by time and allowed as such.||Prosecution u/s 276CC cannot be initiated|
|4||–||No filing of return allowed after the time specified in 3 above.||Return of Income not allowed to be filed after the expiry of one year from the end assessment year i.e. it is barred by time. (For example For AY. 2019-20, Return of Income cannot be filed after 31st March 2021. After 31st March 2021 the return will be time barred)
In such case Return can be only upon notice issued u/s 142 (1).Further assessments in such cases are done u/s. 144. (Best Judgment Assessment)
|Prosecution can be initiated U/s 276CC|
The major cause of concern is prosecution for late filers covered in situation 4 above. As per the provisions of section 276CC, a person can be placed behind the bars for a term ranging from three months to seven years.
One may ask a question that, we have been filing late returns since a long. Why this time we should be more concerned about this?
The answer to above is that, now CBDT has decided to initiate prosecution (Chapter XXII provisions) against the big assessee to create deterrent effect amongst them so as to increase voluntary compliance.
(Compiled by CA Ramesh Nanasaheb Thete – B.Com., LLB, ACA.)