Formerly while notice under section 148 is received from the department to assess the income that has escaped the assessment, by the Assesses, who have already filed the returns of income, it has been the accepted practice that they would send a letter stating that they had already filed the return of income on a particular date with the acknowledgement number and the return filed already may be taken as the one filed in response to the notice issued.

But now after filing of the return of income has become digital it has become mandatory to file the e-return once again in the portal and while such returns are uploaded the Assessees are in trouble since the software calculates interest under section 234A till the date of the return being filed now in response to notice under section 148, whereas the section 234A (3) is very clear in this respect that the interest under section 234A for such the returns is to be paid if there is delay of more than 30 days from the receipt of the notice under sections 148.

For example, if the notice is received after two years the software demands interest for the entire two years. In such situations, returns, prepared in xml format are to be uploaded directly by correcting the interest calculated by the software. Once the option of filing the return in response to notice under section 148 is selected the software should not calculate interest under section 234A till the date of filing the return for the cases where the return had already been filed. This is to be corrected in the software of the Income Tax Department so that the software is in alignment with the statute.

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May 2021