Section 139(4) and 139(5) – Time limit for filing belated return reduced

Section 139(4) and 139(5) – Time limit for filing belated return reduced – Reference to return in response to section 142(1) may be included in Sections 139(4) and 139(5)

Issue/Justification

Prior to amendment made by the Finance Act, 2016:Section 139(4) provided that a person who has not furnished a return within the time allowed to him under sub-section (1), or within the time allowed under a notice issued under sub-section (1) of section 142, may furnish the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.

Similarly, Prior to amendment made by the Finance Act, 2016, Section 139(5) provided that if any person, having furnished the return under sub-section (1), or in pursuance of a notice issued under sub-section (1) of section 142 discovers any omission or any wrong statement therein, he may furnish a revised return at any time before one year from the end of the relevant assessment year or completion of assessment, whichever is earlier.

The Finance Act, 2016 has substituted section 139(4) & 139(5) as follows:

“(4) Any person who has not furnished a return within the time allowed to him under sub-section (1), may furnish the return for any previous year at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.”;

“(5) If any person, having furnished a return under sub-section (1) or subsection (4), discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.”;

Reference to return filed in response to section 142(1) is missing in new sub-section (4) and sub-section (5) of section 139.

As per the Explanatory Memorandum to the Finance Bill, 2016, the return which can be revised under section 139(5) also includes a return furnished in response to notice issued under subsection (1) of section 142. However, reference to notice under section 142(1) does not find place in the new sub-section (5) in the Finance Act, 2016.

Suggestion

It is suggested that

(i) Reference to sub-section (1) of section 142 may be reinstated in new section 139(4) i.e., enabling provision to be made for filing of belated return in response to notice under section 142(1).

(ii) Section 139(5) may be amended to provide for revision of return filed in response to notice under section 142(1), in line with the intent expressed in the Explanatory Memorandum.

Source-  ICAI Pre-Budget Memorandum–2018 (Direct Taxes and International Tax)