In this article, I am going to discuss the scenarios where an assessee is required to file Income Tax Return for F.Y. 2019-20 (A.Y. 2020-21).

Section 139(1) of Income Tax Act 1961 (Act) talks about when a person is required to file a Return of Income (ROI). For the sake of convenience, I extract the sections:-

Section 139. (1) Every person,—

(a)  being a company or a firm; or

(b)  being a person other than a company or a firm, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax,

shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed:

Section 2(31)

person” includes—

(i) an individual,

(ii) a Hindu undivided family,

(iii) a company,

(iv) a firm,

(v) an association of persons or a body of individuals, whether incorporated or not,

(vi) a local authority, and

(vii) every artificial juridical person, not falling within any of the preceding sub-clauses.

Explanation.—For the purposes of this clause, an association of persons or a body of individuals or a local authority or an artificial juridical person shall be deemed to be a person, whether or not such person or body or authority or juridical person was formed or established or incorporated with the object of deriving income, profits or gains;

From the plain reading of above sections, we found that a company and a firm are required to file a return of income compulsorily for every year whereas any person other than company and firm as defined in section 2(31) of the Act are required to file ROI when their taxable income exceeds the maximum amount which is not chargeable to income-tax. The latter one can file ROI voluntarily even though their taxable income does not exceed the maximum amount which is not chargeable to income-tax.

Following seventh proviso has been Inserted after the sixth proviso to sub-section (1) of the section 139 by the Act No. 23 of 2019, w.e.f. 1-4-2020:

Provided also that a person referred to in clause (b), who is not required to furnish a return under this sub-section, and who during the previous year—

 (i)  has deposited an amount or aggregate of the amounts exceeding one crore rupees in one or more current accounts maintained with a banking company or a co-operative bank; or

(ii)  has incurred expenditure of an amount or aggregate of the amounts exceeding two lakh rupees for himself or any other person for travel to a foreign country; or

(iii)  has incurred expenditure of an amount or aggregate of the amounts exceeding one lakh rupees towards consumption of electricity; or

(iv)  fulfils such other conditions as may be prescribed,

shall furnish a return of his income on or before the due date in such form and verified in such manner and setting forth such other particulars, as may be prescribed.

The fundamental purpose of introducing above proviso was to counter suppression in the area of filing of return of income, and this proviso was introduced in the light of the widespread belief that assessees are often not filing the return of income because of section 139(1) of the Act (i.e. income below taxable limit) even though there are certain transactions with huge amounts during the year.

With the insertion of the above proviso, assessee will have to file a return of income compulsorily whenever any of the above conditions trigger despite the fact that their taxable income does not exceed the maximum amount which is not chargeable to income-tax.

Considering the above, the Income Tax Department has made the following necessary changes in the General Information section of the return of income for the A.Y. 2020-21.

ITR Filing

Note: The above image has been extracted from the ITR-1 provided at the income tax website.

Fees for default in furnishing the Return of Income

Section 234(F) of the Income Tax Act, 1961 deals with the Fees for default in furnishing the Return of Income. Where a person fails to furnish ROI for the A.Y. commencing on or after the 1/4/2018 i.e. 2018-19, within the time prescribed in section 139(1), this section gets triggered and he shall pay, by way of fee, a sum of,—

(a) five thousand rupees, if the return is furnished on or before the 31st day of December of the assessment year;

(b) ten thousand rupees in any other case: 

Provided that if the total income of the person does not exceed five lakh rupees, the fee payable under this section shall not exceed one thousand rupees.

The above fee is not leviable in respect of each and every case of late filing of return.  The same is leviable only if the following 2 conditions satisfied. 

Condition A: There must be a mandatory requirement u/s 139 of the Act to file ROI;

and

Condition B: there must be a failure to file ROI within the due date prescribed u/s 139(1) i.e., 31st July / 30th September / 30th November as the case may be.

Scenarios where Late Fee leviable or not:-

Scenario Late fee leviable Amount Rationale
Voluntary filing of Return (i.e. income below threshold limit) No Nil Condition A does not satisfied
Filing of return after the due date with a total income of less than 5 Lakhs Yes Rs. 1,000/- Both Condition A and B satisfied plus proviso to section 234(f) will apply.
Filing of return after the due date but before 31/12/20XX of A.Y. with a total income of more than 5 Lakhs Yes Rs. 5,000/- Both Condition A and B satisfied.

Section 234(f)(a) will apply.

Filing of return after the due date but before 31/03/20XX of A.Y. with a total income of more than 5 Lakhs Yes Rs. 10,000/- Both Condition A and B satisfied.

Section 234(f)(b) will apply.

Filing of Revised Return / Defective Returns / Rectifications No Nil The due date for filing of revised return is not mentioned in section 139(1). As a result, Condition B does not satisfied.
Filing of return in respect of Notice u/s 148, 142(1) and 153A No Nil The due date for filing of these returns are not mentioned in section 139(1). As a result, Condition B does not satisfied.
Filing of return of Company / firm after the due date but before 31/12/20XX of A.Y. Yes Rs. 5,000/- The late fee for companies does not depend on income. Even in case of Loss, Nil / Positive Income, late fee leviable.
Filing of return of Company / firm after the due date but before 31/03/20XX of A.Y. Yes Rs. 10,000/-

In view of the above, it is hereby stated that the late fee is leviable only if the above two conditions mentioned in section 234F are satisfied.

Disclaimer: The information contained in the above article are solely for informational purpose after exercising due care and is on based on the author’s interpretation of the relevant provisions. The same should not be considered as professional advice. The author accepts no responsibility whatsoever and will not be liable for any losses, claims, or damages which may arise because of the contents of this write-up.

You may contact the author for further information at 9836405353 or carajiv@outlook.com.

Author Bio

Qualification: CA in Job / Business
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Location: Howrah, West Bengal, IN
Member Since: 04 Jun 2020 | Total Posts: 3
I am a Chartered Accountant by Profession and my core competencies are Accounting, Auditing and Assurance as well as Taxation. View Full Profile

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16 Comments

  1. Jayaraman says:

    Thank you for your detailed explanation.
    1) If an assessee is not coming under the purview of proviso 7 of 139(1) but filing the return then he should tick the colum ‘NO’ in the general information.. Am I correct in my understanding?
    2) If the investments are made after 31/03/20 for seeking deduction in taxable income for the A. Y 2021-22, falling in the lockdown period from 01/04/20 to 30/06/20 then is it necessary to show this in the new Column introduced calling for details of investments from 01/04/20to 30/06/20. Can you please guide me.
    Thanks and regards
    JAYARAMAN K. N

  2. Ananthanarayanan says:

    Dear Sir,
    What is the due date for payment of self assessment tax by a senior citizen for the AY 2020-2021? Can it be paid just before 30/11/2020, the due date for submission of I /Tax return?

    1. rajiv5353 says:

      There is no specific due date prescribed in the Act for the payment of Self Assessment Tax. You can pay the same at any time before the filing of ROI.

  3. ASHVIN says:

    Dear Sir,
    Kindly offer your advice on Long term gain
    particularly in special case of CORONA 19
    due to which I have to liquidate my investment in shares. Can I save tax by
    investing in any government bonds or any
    Other instruments. Kindly guide me. I will
    be very obliged. Ashvin H.Shah

    1. rajiv5353 says:

      It was there in the ROI on 8th June 2020. You might have seen this portion:-

      investment/ deposit/ payments between 01.04.2020 to 30.06.2020 for the purpose of claiming any deduction under Part B of Chapter VIA

      Please recheck once.

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