The Finance Bill,2022 proposes to insert Sub section 8A to section 139 of the Income Tax Act, 1961 giving an opportunity to file an updated return within 24 months from the end of the assessment year. This is irrespective of the fact whether an assessee has filed return under sub-section (1), sub-section (4) or sub-section (5), for an assessment year.
Updation of returns not allowed in certain cases:
There are certain exceptions where section 139 (8A) shall not apply and in such cases updating of returns will not be allowed. These cases are given as under :-
- Where the updated return is a loss return
- Where such return has the effect of decreasing taxable income determined on the basis of return filed earlier under sub section (1),(4), or (5) of section 139 of the Act and thereby increasing the refund.
- 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,
- a survey has been conducted under section 133A, other than subsection (2A) of that section, in the case such person,
- 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,
- 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.
- 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 18
(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.
Updated Return can be defective:
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.
Payment of tax upon updation of return:
Such updated return shall be filed and accompanied by the proof of payment of tax, interest u/s 234A,234B and 234C and fees for delay in filing of return. Such interest 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 where no earlier return has been furnished., as adjusted for the TDS, advance tax paid, any relief claimed u/s 90,91, 90A, any tax credit claimed u /s 115 JAA and 115 JD. Where return has been filed u /s 139(1),(4) or (5), tax payable on the basis of updated return shall be further adjusted for any self assessment tax, and be increased by the refund granted earlier on the basis of earlier return.,. The assessee shall also be liable to pay additional tax of 25 % or 50% of the aggregate of tax and interest ( as computed above) depending upon whether the assessee has filed the updated return within 12 months or 24 months from the end of relevant assessment year. Assessed tax shall be determined on the basis of updated return filed.
Conclusion:
Thus, it can be seen that barring a few exceptions the assessee can file updated return to correct the errors, omissions including relating to non filing of return. This new sub section does not debar filing of updated return even if no tax becomes payable by the reason of entire tax having been paid by way of advance tax, TDS, etc. In such cases,, he becomes liable to pay fees for delay in filing of return.
This proposed sub section is an excellent opportunity to encourage compliances and to escape the rigors of more stringent sections like 147,148 etc.
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CA. Sanjay Saxena is having more than 30 years core experience in the field of Direct Taxes and is providing Direct Tax Consultancy to big Corporates.He can be reached at sanakhil59@gmail.com
