Provisions for filing of updated return
Section 139 of the Act is related to the provisions for filing of Income Tax Return by taxpayers.
2. Sub-section (1) of section 139 of the Act casts responsibility on the taxpayer to furnish a return within a definite time period or up to a particular date, that is, the due date which as per this section means:
(a) for an assessee who is a company or a person (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force, it is 31st day of October of the assessment year;
(b) for an assessee who is required to furnish a report under section 92E, it is 30th day of November of the assessment year; and
(c) for any other assessee, it is 31st day of July of the assessment year.
Alternatively, sub-section (4) of section 139 of the Act facilitates filing of a belated return after the expiry of due date, if such return is furnished before 3 months prior to the end of the relevant assessment year or before the completion of assessment, whichever is earlier. Similarly, sub-section (5) of section 139 of the Act provides the taxpayer an opportunity to revise the return filed under sub-section (1) or sub-section (4) in case of any omission or wrong statement, after due date, which is to be filed 3 months before the end of the assessment year or before the completion of assessment, whichever is earlier. Hence, the object of section 139 of the Act is to give reasonable time to the taxpayer to file a correct statement of his income within the duration specified under the Act.
3. This provision provides an additional time of approximately 5 months to an individual assessee, 2 months to a company/auditable case and 1 month to an assessee who enters into an international transaction or specified domestic transaction respectively, in a financial year to file belated or revised return. This additional timeline for filing a revised/belated return may not be adequate when we factor in utilization of huge information and data available coupled with the “nudge approach” that motivates the taxpayer towards the desired objective of voluntary tax compliance, starting with filing of correct tax returns.
4. Hence, it is proposed to introduce a new provision in section 139 of the Act for filing an updated return of income by any person, whether he has filed a return previously for the relevant assessment year, or not. The proposal for updated return over a period longer than that is provided in the existing provisions of Income-tax Act would on the one hand bring use of huge data with the IT Department to a logical conclusion resulting in additional revenue realization and on the other hand, it will facilitate ease of compliance to the taxpayer in a litigation free environment.
5. Hence, it is proposed that the taxpayers may be given some more time under the Act to file particulars of their income for a previous year in an updated return. A payment of additional tax by persons opting to furnish their returns in the newly provided timelines is also required. It is proposed that an amount equal to twenty five percent or fifty percent as additional tax on the tax and interest due on the additional income furnished would be required to be paid. The following amendments to the Act are proposed for incorporating the above provisions: –
I) A new sub-section (8A) in section 139 is proposed to be introduced to provide for furnishing of updated return under the new provisions.
in section 139, ––
(a) It is proposed to insert sub-section (8A) in section 139 of the Act to provide that:
(i) Any person, whether or not he has furnished a return under sub-section (1), sub-section (4) or sub-section (5), for an assessment year (herein referred to as the relevant assessment year), may furnish an updated return of his income or the income of any other person in respect of which he is assessable under the Act, for the previous year relevant to such assessment year, within twenty four months from the end of the assessment year. Such return shall be furnished in the prescribed form and manner and shall contain prescribed particulars.
(ii) The proposed sub-section (8A) of section 139 shall not apply, if the updated return, is a return of a loss or has the effect of decreasing the total tax liability determined on the basis of return furnished under sub-section (1), subsection (4) or sub-section (5) or results in refund or increases the refund due on the basis of return furnished under sub-section (1), sub-section (4) or subsection (5), of such person under the Act for the relevant assessment year.
(iii) A person shall not be eligible to furnish an updated return under the proposed sub-section (8A) of section 139, if: ––
(a) search has been initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of such person, or
(b) a survey has been conducted under section 133A, other than subsection (2A) of that section, in the case such person, or
(c) 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 the case of any other person belongs to such person, or
(d) a notice has been issued to the effect that 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.
This provision is for the assessment year relevant to the previous year in which such search is initiated or survey is conducted or requisition is made and two assessment years preceding such assessment year.
(iv) Also, no updated return shall be furnished by any person for the relevant assessment year, where,
(a) an updated return has been furnished by him under the proposed subsection (8A) of section 139 of the Act for the relevant assessment year, or
(b) any proceeding for assessment or reassessment or recomputation or revision of income under the Act is pending or has been completed for the relevant assessment year in his case, or
(c) the Assessing Officer has information in respect of such person for the relevant assessment year in his possession under the Prevention of Money Laundering Act, 2002 or the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 or the Prohibition of Benami Property Transactions Act, 1988 or The Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 and the same has been communicated to him, prior to the date of his filing of return under the proposed sub-section (8A) of section 139 of the Act, or
(d) information for the relevant assessment has been received under an agreement referred to in sections 90 or 90A of the Act in respect of such person and the same has been communicated to him, prior to the date of his filing of return under the proposed sub-section (8A) of section 139 of the Act, or
(e) any prosecution proceedings under Chapter XXII have been initiated for the relevant assessment year in respect of such person, prior to the date of his filing of return under the proposed sub-section(8A) of section 139 of the Act, or
(f) he is a person or belongs to a class of persons, as maybe notified by the Board in this regard.
b) It has also been proposed to amend sub-section (9) of section 139 to provide that a return filed under the proposed sub-section (8A) of the said section 139 shall be defective unless such return is accompanied by the proof of payment of tax as required under the proposed section 140B.
II) A new section 140B has been proposed to provide for the tax required to be paid for opting to file a return under the proposed provisions i.e. sub-section (8A) of section 139 of the Act.
I. Where no return furnished earlier: where no return of income under sub-section (1) or sub-section (4) of section 139 has been furnished by an assessee, he shall before furnishing the return under sub-section (8A) of section 139, be liable to pay the tax due together with interest and fee payable under any provision of the Act for any delay in furnishing the return or any default or delay in payment of advance tax, along with the payment of additional tax. The tax payable shall be computed after taking into account the following:-
(i) the amount of tax, if any, already paid as advance tax;
(ii) any tax deducted or collected at source;
(iii) any relief of tax claimed under section 89;
(iv) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India;
(v) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; and
(vi) any tax credit claimed to be set off in accordance with the provisions of section 115JAA or section 115JD.
Such updated return shall also be accompanied by proof of payment of such tax, additional tax, interest and fee.
II. In the case of an assessee, where, return of income under sub-section (1) or sub-section (4) or sub-section (5) of section 139 (referred to as earlier return) has been furnished by an assessee, he shall before furnishing the return under sub-section (8A) of section 139, be liable to pay the tax due together with interest and fee payable under any provision of this Act for any delay in furnishing the return or any default or delay in payment of advance tax, along with the payment of additional tax, as reduced by the amount of interest paid under the provisions o the Act in the earlier return,. The tax payable shall be computed after taking into account the following:-
(i) the amount of relief or tax, referred to in sub-section (1) of section 140A, the credit for which has been taken in the earlier return;
(ii) tax deducted or collected at source, in accordance with the provisions of Chapter XVII-B, on any income which is subject to such deduction or collection and which is taken into account in computing total income and which has not been claimed in the earlier return;
(iii) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India on such income which has not been claimed in the earlier return;
(iv) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section on such income which has not been claimed in the earlier return;
(v) any tax credit claimed, to be set off in accordance with the provisions of section 115JAA or section 115JD, which has not been claimed in the earlier return. The aforesaid tax shall be increased by the amount of refund, if any, issued in respect of such earlier return.
The updated return, furnished under sub-section (8A) of section 139, shall be accompanied by proof of payment of such tax, additional tax, interest and fee.
III) The additional tax, payable at the time of furnishing the return under sub-section (8A) of section 139, shall be equal to twenty-five per cent of aggregate of tax and interest payable, as determined in sub- paragraphs I or II above, if such return is furnished after expiry of the time available under sub-section (4) or sub-section (5) of section 139 and before completion of period of twelve months from the end of the relevant assessment year. However, if such return is furnished after the expiry of twelve months from the end of the relevant assessment year but before completion of the period of twenty-four months from the end of the relevant assessment year, the additional tax payable shall be fifty per cent of aggregate of tax and interest payable, as determined in sub- paragraphs I or II above.
It is also clarified that for the purposes of computation of “additional income-tax”, tax shall include surcharge and cess, by whatever name called, on such tax.
IV) It is further provided that notwithstanding anything contained in the Explanation 1 to section 234B, in the cases where an earlier return has been furnished, interest payable under section 234B shall be computed on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid falls short of the assessed tax, where, “assessed tax” means the tax on the total income as declared in the return to be furnished under sub-section (8A) of section 139, after taking into account the following:
(i) the amount of relief or tax, referred to in sub-section (1) of section 140A, the credit for which has been taken in the earlier return;
(ii) tax deducted or collected at source, in accordance with the provisions of Chapter XVII-B, on any income which is subject to such deduction or collection and which is taken into account in computing such total income and which has not been claimed in the earlier return;
(iii) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India on such income which has not been claimed in the earlier return;
(iv) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section on such income which has not been claimed in the earlier return;
(v) any tax credit claimed, to be set off in accordance with the provisions of section 115JAA or section 115JD, which has not been claimed in the earlier return. The aforesaid tax shall be increased by the amount of refund, if any, issued in respect of such earlier return.
V. where no earlier return has been furnished, the interest payable under section 234A shall be computed on the amount of the tax on the total income as declared in the return under sub-section (8A) of section 139. Further, interest payable under section 234C, where an earlier return has not been furnished, shall be computed after taking into account the income furnished in the return under sub-section (8A) of section 139 as the returned income. At the same time, for the computation of additional tax above, the interest payable shall be interest chargeable under any provision of the Income-tax Act, on the income as per return furnished under sub-section (8A) of section 139, as reduced by interest paid in the earlier return, if any. However, the interest paid in the earlier return shall be considered to be nil if no earlier return has been furnished.
VI. In view of the proposed sub-section (8A) of section 139 and new section 140B, consequential amendments in section 144, section 153, section 234A and section 234B and 276CC have also been made.
These amendments will take effect from 1st April, 2022.
Note Clause 38, 39,41, 48, 64, 65 and 81 of Finance Bill 2022
Clause 38 seeks to amend section 139 of the Income-tax Act relating to return of income.
It is proposed to insert a new sub-section (8A) in the said section to provide that any person, whether or not he has furnished a return under sub-section (1), sub-section (4) or sub-section (5), for an assessment year (herein referred to as the relevant assessment year), may furnish an updated return of his income or the income of any other person in respect of which he is assessable under the Income-tax Act, for the previous year relevant to such assessment year, in the prescribed form, verified in the manner and setting forth such particulars as may be provided by rules, at any time within twenty-four months from the end of the relevant assessment year.
Clause 39 seeks to insert a new section 140B in the Income-tax Act relating to tax on updated return.
It is proposed to provide for filing of updated return by a person under the new subsection (8A) of section 139. It is, therefore, proposed to provide that the total tax shall be payable by such person furnishing a return under the said sub-section (8A) as a consequential amendment.
The proposed new section provides that in the case of an assessee, where no return of income under sub-section (1) or sub-section (4) of section 139 has been furnished by such assessee and tax is payable, on the basis of return to be furnished by such assessee under sub-section (8A) of section 139, the assessee shall be liable to pay such tax together with interest and fee payable under any provision of this Act for any delay in furnishing the return or any default or delay in payment of advance tax, along with the payment of additional income-tax, before furnishing such return. The tax payable shall be computed after taking into account the following:––
(i) the amount of tax, if any, already paid as advance tax;
(ii) any tax deducted or collected at source;
(iii) any relief of tax claimed under section 89;
(iv) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India;
(v) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; and
(vi) any tax credit claimed to be set off in accordance with the provisions of section 115JAA or section 115JD.
Such updated return shall be accompanied by proof of payment of such tax, additional income-tax, interest and fee.
It is further proposed that, in the case of an assessee, where, return of income under sub-section (1) or sub-section (4) or sub-section (5) of section 139 (referred to as the earlier return) has been furnished by such assessee and tax is payable on the basis of return to be furnished by such assessee under sub-section (8A) of section 139, the assessee shall be liable to pay such tax together with interest payable under any provision of this Act for any default or delay in payment of advance tax, along with the payment of additional income-tax, as reduced by the amount of interest paid under the provisions of this Act in the earlier return, before furnishing the return and the tax payable shall be computed after taking into account the following:––
(i) the amount of relief or tax referred to in sub-section (1) of section 140A, the credit for which has been claimed in the earlier return ;
(ii) tax deducted or collected at source, in accordance with the provisions of Chapter XVII-B, on any income which is subject to such deduction or collection and which is taken into account in computing total income and which has not been included in the earlier return;
(iii) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India on such income which has not been included in the earlier return;
(iv) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section on such income which has not been included in the earlier return;
(v) any tax credit claimed, to be set off in accordance with the provisions of section 115JAA or section 115JD, which has not been claimed in the earlier return, and
as increased by the amount of refund, if any, issued in respect of such earlier return.
The updated return, furnished under sub-section (8A) of section 139, shall be accompanied by proof of payment of such tax, additional income-tax, interest and fee.
It is also proposed that the additional income-tax, payable at the time of furnishing the return under sub-section (8A) of section 139, shall be equal to twenty-five per cent. of aggregate of tax and interest payable, as determined above, if such return is furnished after expiry of the time available under sub-section (4) or sub-section (5) of section 139 and before completion of period of twelve months from the end of the relevant assessment year. However, if such return is furnished after the expiry of twelve months from the last date of the relevant assessment year but before completion of the period of twenty-four months from the last date of the relevant assessment year, the additional income-tax payable shall be fifty per cent. of aggregate of tax and interest payable, as determined above.
It is proposed to insert Explanation in sub-section (3) to provide that for the purpose of computing additional income-tax, “tax” shall include surcharge and cess, by whatever name called, on such tax.
It is also proposed that notwithstanding anything contained in Explanation 1 to section 234B, in the cases where an earlier return has been furnished, interest payable under section 234B shall be computed on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid falls short of the “assessed tax” which means the tax on the total income as declared in the return to be furnished under subsection (8A) of section 139, after taking into account the following:––
(i) the amount of relief or tax, referred to in sub-section (1) of section 140A, the credit for which has been claimed in the earlier return;
(ii) tax deducted or collected at source, in accordance with the provisions of Chapter XVII-B, on any income which is subject to such deduction or collection and which is taken into account in computing such total income, which has not been included in the earlier return;
(iii) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India on such income which has not been included in the earlier return;
(iv) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section on such income which has not been included in the earlier return;
(v) any tax credit claimed, to be set off in accordance with the provisions of section 115JAA or section 115JD, which has not been claimed in the earlier return, and
as increased by the amount of refund, if any, issued in respect of such earlier return.
It is also proposed that if any difficulty arises in giving effect to the provisions of the proposed section, the Board may, with the approval of the Central Government, issue guidelines, by notification in the Official Gazette, for the purpose of removing the difficulty and every such guideline shall be laid before each House of Parliament.
It is also proposed to provide that interest payable under section 234A, where no earlier return has been furnished, shall be computed on the amount of tax on the total income as declared in the return under sub-section (8A) of section 139. Further, interest payable under section 234C, where an earlier return has been furnished, shall be computed after taking into account the total income furnished in the return under sub-section (8A) of section 139 as the returned income. At the same time, for the computation of additional income-tax above, the interest payable shall be interest chargeable under any provision of the Income-tax Act, on the income as per return furnished under sub-section (8A) of section 139, as reduced by interest paid in the earlier return, if any. However, the interest paid in the earlier return shall be considered to be nil if no earlier return has been furnished.
This amendment will take effect from 1st April, 2022.
Clause 41 seeks to amend section 144 of the Income-tax relating to best judgement assessment.
It is proposed to amend clause (a) of sub-section (1) of the said section to provide that the Assessing Officer shall make best judgement assessment if any person fails to furnish updated return under sub-section (8A) of section 139 along with failure to make return under sub-section (1) or sub-section (4) or sub-section (5) of section 139.
This amendment will take effect from 1st April, 2022.
Clause 48 seeks to amend section 153 of the Income-tax Act relating to time limit for completion of assessment, reassessment and recomputation.
It is proposed to insert a new sub-section (1A) in the said section to provide that where an updated return is furnished under sub-section (8A) of section 139, an order of assessment under section 143 or section 144 may be made at any time before the expiry of nine months from the end of the financial year in which such return was furnished.
It is further proposed to amend sub-section (3) of the said section to provide that fresh order under section 92CA, in pursuance of an order, setting aside or cancelling an order under section 92CA shall also come within the provision of the said sub-section.
It is also proposed to amend sub-section (5) of the said section to provide that an order passed by the Transfer Pricing Officer under section 92CA of the Act, in consequence to an order under section 263 of the Act shall also come within the purview of the said Act.
It is also proposed to insert a new sub-section (5A) to provide that where the Transfer Pricing Officer gives effect to an order or direction under section 263 by means of an order under section 92CA and forwards such order to the Assessing Officer, the Assessing Officer shall proceed to modify the order of assessment or reassessment or recomputation, in conformity with such order of the Transfer pricing Officer, within two months from the end of the month in which such order of the Transfer Pricing Officer is received by him.
It is also proposed to amend sub-section (6) to make a reference of the newly inserted sub-section (5A) therein.
These amendments are proposed consequent to the amendments made in section 263.
Explanation 1 to the said section provides the time limit in certain cases which are required to be excluded while computing the period of limitation under the said section.
It is also proposed to amend clause (iii) of the said Explanation so as to omit the reference of “sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10”.
These amendments will take effect from lst April, 2022.
It is also proposed to insert a new clause (xii) to provide for exclusion of the period commencing from the date on which a search is initiated under section 132 or a requisition is made under section 132A and ending on the date on which the books of account or other documents, or any money, bullion , jewellery or other valuable article or thing seized under section 132 or requisitioned under section 132A, as the case may be, are handed over to the Assessing Officer having jurisdiction over the assessee,––
(a) in whose case such search is initiated under section 132 or such requisition is made under section 132A; or
(b)to whom any money, bullion, jewellery or other valuable article or thing seized or requisitioned belongs to; or
(c) to whom any books of account or documents seized or requisitioned, pertains or pertain to, or any information contained therein, relates to,
or one hundred and eighty days, whichever is less, in computing the period of limitation for the purpose of assessment, reassessment or recomputation.
This amendment will take retrospectively effect from lst April, 2021.
It is also proposed to insert a new clause (xiii) in the said Explanation to provide that the period commencing from the date, on which the Assessing Officer makes a reference to the Principal Commissioner or Commissioner under third second proviso to sub-section (3) of section 143 or is deemed to have been made under Explanation 3 of the fifteenth proviso to clause (23C) of section 10, and ending with the date on which the copy of the order under clause (ii) or clause (iii) of fifteenth proviso to clause (23C) of section 10 or clause (ii) or clause (iii) of sub-section (4) of section 12AB, as the case may be, is received by the Assessing Officer, shall be excluded while computing the period of limitation under the said section.
This amendment will take effect from 1st April, 2022.
Clause 64 seeks to amend section 234A of the Income-tax Act relating to interest for defaults in furnishing return of income.
It is proposed to amend sub-section (1) of the said section to provide that an assessee shall be liable to pay simple interest for furnishing after due date or not furnishing a return under sub-section (8A) in addition to return under sub-section (1) or sub-section (4) of section 139.
It is further proposed to amend Explanation 2 of the sub-section to provide that,––
(i) “tax on total income as determined under sub-section (1) of section 143” shall not include the additional income-tax, if any, payable under section 140B or section 143 and
(ii) “tax on total income determined under such regular assessment” shall not include the additional income-tax payable under section 140B.
These amendments will take effect from 1st April, 2022.
Clause 65 seeks to amend section 234B of the Income-tax Act relating to interest for defaults in payment of advance tax.
It is proposed to amend Explanation 3 to sub-section (1) of the said section to provide that,––
(i) “tax on total income as determined under sub-section (1) of section 143” shall not include the additional income-tax, if any, payable under section 140B or section 143 and
(ii) “tax on total income determined under such regular assessment” shall not include the additional income-tax payable under section 140B.
This amendment will take effect from 1st April, 2022.
Clause 81 seeks to amend the section 276CC of the Income-tax Act relating to failure to furnish returns of income.
The proviso to the said section, inter alia, provides that a person shall not be proceeded against under the said section, for failure to furnish the return of income in due time, if a return is furnished by such person before the expiry of the assessment year or the tax payable by such person, not being a company, on the total income determined on regular assessment does not exceed rupees ten thousand.
It is proposed to amend sub-clause (a) of clause (ii) of the said proviso to provide that a person shall not be proceeded against under the said section for failure to furnish in due time the return of income under sub-section (1) of section 139, if such a person has furnished return under sub-section (8A) of section 139 for the relevant assessment year.
This amendment will take effect from 1st April, 2022.
*****
Extract of Clause 38,39,41, 48, 64,65 and 81 of Finance Bill 2022
38. In section 139 of the Income-tax Act,––
(i) after sub-section (8), the following sub-section shall be inserted, namely:––
“(8A) Any person, whether or not he has furnished a return under sub-section (1) or sub-section (4) or subsection (5), for an assessment year (herein referred to as the relevant assessment year), may furnish an updated return of his income or the income of any other person in respect of which he is assessable under this Act, for the previous year relevant to such assessment year, in the prescribed form, verified in such manner and setting forth such particulars as may be prescribed, at any time within twenty-four months from the end of the relevant assessment year:
Provided that the provision of this sub-section shall not apply, if the updated return,––
(a) is a return of a loss; or
(b) has the effect of decreasing the total tax liability determined on the basis of return furnished under subsection (1) or sub-section (4) or sub-section (5); or
(c) results in refund or increases the refund due on the basis of return furnished under under sub-section (1) or sub-section (4) or sub-section (5), of such person under this Act for the relevant assessment year:
Provided further that a person shall not be eligible to furnish an updated return under this sub-section, where––
(a) a search has been initiated under section 132 or books of account or other documents or any assets are requisitioned under section 132A in the case of such person; or
(b) a survey has been conducted under section 133A, other than sub-section (2A) of that section, in the case such person; or
(c) 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 the case of any other person belongs to such person; or
(d) a notice has been issued to the effect that 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, for the assessment year relevant to the previous year in which such search is initiated or survey is conducted or requisition is made and two assessment years preceding such assessment year:
Provided also that no updated return shall be furnished by any person for the relevant assessment year, where––
(a) an updated return has been furnished by him under this sub-section for the relevant assessment year; or
(b) any proceeding for assessment or reassessment or recomputation or revision of income under this Act is pending or has been completed for the relevant assessment year in his case; or
(c) the Assessing Officer has information in respect of such person for the relevant assessment year in his possession 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 return under this sub-section; or
(d) 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 return under this sub-section; or
(e) any prosecution proceedings under the Chapter XXII have been initiated for the relevant assessment year in respect of such person, prior to the date of furnishing of return under this sub-section; or
(f) he is such person or belongs to such class of persons, as may be notified by the Board in this regard.”;
(ii) in sub-section (9), in the Explanation, after clause (c), the following clause shall be inserted, namely:––
“(ca) the return is accompanied by the proof of payment of tax as required under section 140B, if the return of income is a return furnished under sub-section (8A);”.
39. Insertion of new section 140B.
After section 140A of the Income-tax Act, the following section shall be inserted, namely:––
‘140B. Tax on updated return.
(1) Where no return of income under sub-section (1) or sub-section (4) of section 139 has been furnished by an assessee and tax is payable, on the basis of return to be furnished by such assessee under sub-section (8A) of section 139, after taking into account,—
(i) the amount of tax, if any, already paid as advance tax;
(ii) any tax deducted or collected at source;
(iii) any relief of tax claimed under section 89;
(iv) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India;
(v) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; and
(vi) any tax credit claimed to be set off in accordance with the provisions of section 115JAA or section 115JD, the assessee shall be liable to pay such tax together with interest and fee payable under any of the provisions of this Act for any delay in furnishing the return or any default or delay in payment of advance tax, along with the payment of additional income-tax computed in accordance with subsection (3), before furnishing the return and the return shall be accompanied by proof of payment of such tax, additional income-tax, interest and fee.
(2) Where, return of income under sub-section (1) or subsection (4) or sub-section (5) of section 139 (referred to as earlier return) has been furnished by an assessee and tax is payable on the basis of return to be furnished by such assessee under sub-section (8A) of section 139,—
(a) after taking into account,—
(i) the amount of relief or tax referred to in subsection (1) of section 140A, the credit for which has been taken in the earlier return;
(xiii) tax deducted or collected at source, in accordance with the provisions of Chapter XVII-B, on any income which is subject to such deduction or collection and which is taken into account in computing total income and which has not been included in the earlier return;
(iii) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India on such income which has not been included in the earlier return;
(iv) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section on such income which has not been included in the earlier return;
(v) any tax credit claimed, to be set off in accordance with the provisions of section 115JAA or section 115JD, which has not been claimed in the earlier return; and
(b) as increased by the amount of refund, if any, issued in respect of such earlier return, the assessee shall be liable to pay such tax together with interest payable under any provision of this Act for any default or delay in payment of advance tax along with the payment of additional income-tax, as computed in accordance with sub-section (3), as reduced by the amount of interest paid under the provisions of this Act in the earlier return, before furnishing the return and the return shall be accompanied by proof of payment of such tax, additional income-tax, interest and fee.
(3) For the purposes of sub-sections (1) and (2), the additional income-tax payable at the time of furnishing the return under sub-section (8A) of section 139 shall be equal to,––
(i) twenty-five per cent. of aggregate of tax and interest payable, as determined in sub-section (1) or subsection (2), as the case may be, if such return is furnished after expiry of the time available under sub-section (4) or sub-section (5) of section 139 and before completion of the period of twelve months from the end of the relevant assessment year; or
(ii) fifty per cent. of aggregate of tax and interest payable, as determined in sub-section (1) or sub-section (2), as the case may be, if such return is furnished after the expiry of twelve months from the end of the relevant assessment year but before completion of the period of twenty-four months from the end of the relevant assessment year.
Explanation.––For the purposes of computation of “additional income-tax”, tax shall include surcharge and cess, by whatever name called, on such tax.
(4) Notwithstanding anything contained in Explanation 1 to section 234B, for the purposes of sub-section (2), interest payable under section 234B shall be computed on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid falls short of the assessed tax, where, “assessed tax” means the tax on the total income as declared in the return to be furnished under sub-section (8A) of section 139,––
(a) after taking into account,—
(i) the amount of relief or tax referred to in subsection (1) of section 140A, the credit for which has been claimed in the earlier return;
(vi) tax deducted or collected at source, in accordance with the provisions of Chapter XVII-B, on any income which is subject to such deduction or collection and which is taken into account in computing such total income, which has not been included in the earlier return;
(vii) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India on such income which has not been included in the earlier return;
(viii) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section on such income which has not been included in the earlier return;
(ix) any tax credit claimed, to be set off in accordance with the provisions of section 115JAA or section 115JD, which has not been claimed in the earlier return; and
(b) as increased by the amount of refund, if any, issued in respect of such earlier return.
(5) If any difficulty arises in giving effect to the provisions of this section, the Board may, with the approval of the Central Government, by notification in the Official Gazette, issue guidelines for the purpose of removing the difficulty.
(6) Every guideline issued under sub-section (5) shall be laid before each House of Parliament.
Explanation.—For the purposes of this section,—
(i) interest payable under section 234A, for the purposes of sub-section (1), shall be computed on the amount of tax on the total income as declared in the return, under sub-section (8A) of section 139, in accordance with the provisions of sub-section (1A) of section 140A;
(ii) interest payable under section 234C, for the purposes of sub-section (2), shall be computed after taking into account the total income furnished in the return under sub-section (8A) of section 139 as the returned income;
(xiv) interest payable, for the purposes of subsection (3), shall be the interest chargeable under any provision of this Act, on the income as per return furnished under sub-section (8A) of section 139, as reduced by interest paid, in accordance with the earlier return, if any:
Provided that for the purposes of this clause, the interest paid in the earlier return shall be nil if such return is an updated return referred to in sub-section (1).’.
41. Amendment of section 144.
In section 144 of the Income-tax Act, in sub-section (1), in clause (a), after the words, brackets and figure “or sub-section (5)”, the words, brackets, figure and letter “or an updated return under sub-section (8A)” shall be inserted.
48. Amendment of section 153.
In section 153 of the Income-tax Act,––
(a) after sub-section (1), the following sub-section shall be inserted, namely:––
“(1A) Notwithstanding anything contained in subsection (1), where a return under sub-section (8A) of section 139 is furnished, an order of assessment under section 143 or section 144 may be made at any time before the expiry of nine months from the end of the financial year in which such return was furnished.”;
(b) in sub-section (3),––
(i) after the words “fresh assessment”, the words, figures and letters “or fresh order under section 92CA, as the case may be,” shall be inserted;
(ii) after the words “cancelling an assessment,”, the words, letters and figures “or an order under section 92CA, as the case may be” shall be inserted;
(c) in sub-section (5),––
(i) after the words “Assessing Officer” wherever they occur, the words “or the Transfer Pricing Officer, as the case may be,” shall be inserted;
(ii) after the words “fresh assessment or reassessment”, the words, figures and letters “or fresh order under section 92CA, as the case may be,” shall be inserted;
(d) after sub-section (5), the following sub-section shall be inserted, namely:––
“(5A) Where the Transfer Pricing Officer gives effect to an order or direction under section 263 by an order under section 92CA and forwards such order to the Assessing Officer, the Assessing Officer shall proceed to modify the order of assessment or reassessment or recomputation, in conformity with such order of the Transfer Pricing Officer, within two months from the end of the month in which such order of the Transfer Pricing Officer is received by him.”;
(e) in sub-section (6), for the words, brackets and figures “sub-sections (3) and (5)”, the words, brackets, figures and letter “sub-sections (3), (5) and (5A)” shall be substituted;
(f) in Explanation 1,––
(I) in clause (iii), for the words, brackets, figures and letters “or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, under clause (i) of the proviso”, the words, brackets and figure “, under clause (i) of the first proviso” shall be substituted;
(II) in clause (xi), for the words “Assessing Officer,”, the following shall be substituted and shall be deemed to have been substituted with effect from the 1st day of April, 2021, namely:––
“Assessing Officer; or
(xii) the period (not exceeding one hundred and eighty days) commencing from the date on which a search is initiated under section 132 or a requisition is made under section 132A and ending on the date on which the books of account or other documents, or any money, bullion, jewellery or other valuable article or thing seized under section 132 or requisitioned under section 132A, as the case may be, are handed over to the Assessing Officer having jurisdiction over the assessee,––
(a) in whose case such search is initiated under section 132 or such requisition is made under section 132A; or
(b) to whom any money, bullion, jewellery or other valuable article or thing seized or requisitioned belongs to; or
(c) to whom any books of account or documents seized or requisitioned pertains or pertains to, or any information contained therein, relates to; or”;
(III) after clause (xii), before the longline, the following clause shall be inserted, namely:––
“(xiii) the period commencing from the date on which the Assessing Officer makes a reference to the Principal Commissioner or Commissioner under the second proviso to sub-section (3) of section 143 and ending with the date on which the copy of the order under clause (ii) or clause (iii) of the fifteenth proviso to clause (23C) of section 10 or clause (ii) or clause (iii) of sub-section (4) of section 12AB, as the case may be, is received by the Assessing Officer,”.
64. Amendment of section 234A.
In section 234A of the Income-tax Act, in sub-section (1),––
(i) after the words, brackets and figure “or sub-section (4)”, the words, brackets, figure and letter “or sub-section (8A)” shall be inserted;
(ii) for Explanation 2, the following Explanation shall be substituted, namely:–
‘Explanation 2.––In this sub-section,––
(i) “tax on total income as determined under subsection (1) of section 143” shall not include the additional income-tax, if any, payable under section 140B or section 143; and
(ii) tax on the total income determined under regular assessment shall not include the additional income-tax payable under section 140B.’.
65. Amendment of section 234B.
In section 234B of the Income-tax Act, in sub-section (1), for Explanation 3, the following Explanation shall be substituted, namely:––
‘Explanation 3.––In Explanation 1 and in sub-section (3),––
(i) “tax on total income as determined under subsection (1) of section 143” shall not include the additional income-tax, if any, payable under section 140B or section 143; and
(ii) tax on the total income determined under such regular assessment shall not include the additional income-tax payable under section 140B.’.
81. Amendment of section 276CC.
In section 276CC of the Income-tax Act, in the proviso, in clause (ii), in sub-clause (a), after the words “expiry of the assessment year”, the words, brackets, figures and letter “or a return is furnished by him under sub-section (8A) of section 139 within the time provided in that sub-section” shall be inserted.
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