Type of income tax returns, Due date of filing of income tax returns, Verification and Consequences of not filing income tax returns

Type of income tax returns, Due date of filing of income tax returns, Verification and Consequences of not filing income tax returns

 Who is required to file income tax return?

Section 139 (1):  every person,

1. being a company or firm; or
2. being a person other than a company or a firm,

1. if his total income or
2. the total income of any other person (representative assessee or legal representatives) in respect of which he is assessable under Income Tax Act, during the previous year, exceeded the maximum amount which is not chargeable to Income Tax.

shall, furnish a return of his income or the income of such other person.

139 (1) fourth proviso

A person, being a resident other than not ordinary resident in India within the meaning of clause 6 of Section 6, who is not required to furnish a return under section 139(1) and who at any time during the previous year; 

1. holds, as a beneficial owner or otherwise, any asset (including any financial interest in any entity) located outside India or has signing authority in any account located outside India: or

2. is a beneficiary of any asset (including any financial interest in any entity) located outside India,

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

139 (1) fifth proviso

Every person, being –

1. an individual, or
2. a HUF, or
3. an Association of persons or a body of individuals, whether incorporated or not, or
4. an artificial judicial person,

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 without giving effect to the provisions of section 10(38), 10(A), 10B, 10BA, or provisions of chapter VIA (deduction under section 80C to 80U) exceeded the maximum amount which is not chargeable to income tax shall, on or before the due date to furnish a return of his income or income of any other person during the previous year, in the prescribed form and in the prescribed manner.

Note: Point c above cover every company, domestic or foreign company (having some business connection in india or some operating income in india) either the certificate of commencement of business is received or not, defunct company and also a private limited company which has not yet started the business.

139 (1) Explanation 2

Due date of furnishing the return of income:

1. where the assessee (other than an assessee referred to in clause (aa) is –

1. a company, or
2. a person (other than a company) whose accounts are required to be audited under this act or under other law for the time being in force; or
3. a working partner of a firm whose accounts are required to be audited under this act or under other law for the time being in force

• due date of furnishing of return of income is 30^th September of assessment year

1. in the case of an assessee who is required to furnish a report referred to in section 92E (i.e. international transaction or specified domestic transaction)

• due date of furnishing of return of income is 30^th November of assessment year

2. in case of a person other than company, referred to in the first proviso to section 139(1) (specially notified by central govt. who fulfill any of the certain specified conditions)

• due date of furnishing of return of income is 31^st October of assessment year

3. in case of any other assessee

• due date of furnishing of return of income is 31^st July of assessment year

Section 139 (3)  - Return of loss:

If a person who has sustained a loss in any previous year under the head “profit and gain of business or profession” or under the head “capital gains” and claims that such loss or any part thereof  should be carried forward under section 72(1) / 73(2) / 73A(2) / 74(1) and (3) or 74A(3) then he may furnish a return of loss within the time prescribed under section 139(1) and all the provisions of this Act shall apply as if it were a return under section 139(1).

Important to note:

1. Loss on account of house property can be carried forward even if the return is submitted late.
2. Unabsorbed depreciation can also be carried forward even if the return is submitted late.
3. Loss of current previous year cannot be carried forward unless the return of loss is submitted before the due date but loss of other years for which return of loss was filed within due date can be carried forward.

Section 139 (4)  - Belated Return:

Any person who has not furnished a return within the time allowed u/s 139 (1), may furnish the return for any previous year at any time :

1. before the end of the relevant assessment year; or
2. before the completion of assessment (assessment here means assessment u/s 144 i.e. best judgement assessment)

whichever is earlier.

Section 139 (4A) – Return of income of charitable trust and institutions

Every person who is in receipt of following income is required to furnish a return of income of the previous year if, total income exceeds (before allowing exemption u/s 111 and 12) the maximum amount which in not chargeable to tax:

1. income derived from property held under trust or other legal obligation wholly or in part for charitable purpose or religious purpose; or
2. income by way of voluntary contribution on behalf of such trust or institution

 and all the provisions of this Act shall apply as if it were a return required to be furnish u/s 139(1)

Section 139 (4B) – Return of income of political party

Chief executive officer of the Political Party is required to furnish a return of income of the previous year if, total income of political party exceeds (before allowing exemption u/s 13A) the maximum amount which in not chargeable to tax and all the provisions of this Act shall apply as if it were a return required to be furnish u/s 139(1).

Section 139 (4C) – Return of income of certain specified associations and institutions

Certain specified associations and institutions are required to furnish a return of income of the previous year if, their respective income exceeds (before allowing exemption u/s 10) the maximum amount which in not chargeable to tax and all the provisions of this Act shall apply as if it were a return required to be furnish u/s 139(1).

Section 139 (4D) – Return of income of certain institutions carrying on scientific/social/statistical research

Every University, College or other Institution referred to in section 35(1)(ii) & (iii), which is not required to furnish return of income loss under any other provisions of section 139, shall furnish the return of its income or loss in every previous year and all the provisions of this Act shall apply as if it were a return required to be furnish u/s 139(1).

Section 139 (4E) – Return of income of Business Trust

Every Business Trust which is not required to furnish return of income loss under any other provisions of section 139, shall furnish the return of its income or loss in every previous year and all the provisions of this Act shall apply as if it were a return required to be furnish u/s 139(1).

Section 139 (4f) – Return of income of Investment Fund referred to in section 115UB

Every Investment Fund referred to in section 115UB, which is not required to furnish return of income loss under any other provisions of section 139, shall furnish the return of its income or loss in every previous year and all the provisions of this Act shall apply as if it were a return required to be furnish u/s 139(1).

Section 139 (5) - Revised return:

If any person, having furnished a return under section 139(1) or section 139(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.

However as per amendment made by Finance Act, 2017, revised return can now be submitted before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.

Assessment in above section means assessment under section 143(3) and section 144 and do not covers intimation under section 143(1) as the return can be revised even after sending notice under section 143(1).

Important Note:

1. Return filed in response notice u/s 142(1) can be revised, if the same is filed within time allowed in notice u/s 142(1).
2. A revised return can be revised multiple times within the time allowed.
3. Revised return substitutes the original return.
4.  An application or letter to Assessing Officer cannot constitute the revised return.

Section 140  - Verification of Return:

1. Individual –

1. By individual himself
2. he is absent from India, then by himself or by authorised person
3. If he is mentally incapacitated – by his guardian or any other competent person to do so
4. In case of his inability – by any person duly authorised by him

2. HUF (Hindu undivided family) – by karta himself and where karta is absent / mentally incapacitated then by any other adult member of the family
3. Company –

1. by managing director or in case of his inability / absence by any director
2. in case of the company being wound up – by liquidator
3. in case of a company whose management is taken over by Central / State Government – by principal officer thereof
4.  in case of company which has admitted application for corporate insolvency resolution – by appointed insolvency professional

4. Firm – by managing partner or in case of his inability / absence by any partner
5. LLP (Limited liability partnership) – by designated partner or in case of his inability / absence by any partner
6. Local Authority – by principal officer
7. Political party – by chief executive officer
8. Any other association – by any member of the association or principal officer
1. Any other person – i) by that person or ii) any other competent person on his behalf

Consequences of not filing the return:

1. Interest for default in filing the return u/s 139(1) or 139(4) or in response to notice u/s 142(1) – section 234A(1)

Interest is payable @1% p.m. for every month or part of month

1. Where the return of income is furnished after the due date specified u/s 139(1) – from date immediately following the due date till the date of furnishing the return.
2. Where the return of income is not  furnished– from date immediately following the due date till the date of completion of best judgement assessment u/s 144

   ii) Late fees – u/s 234(F) w.e.f. AY 2018-19

Where return u/s 139 is not furnished within in time prescribed u/s 139(1), he shall pay, by way of fee, a sum of –

1. Rs. 5000/- if the return is furnished on or before 31^st December of the assessment year
2. Rs. 10000/- in any other case

However this penalty shall not exceed Rs. 1000/- where total income of person does not exceed Rs. 5,00,000/-.

3. Prosecution

Willful failure to file return may attract prosecution u/s 276CC.

4. In case of charitable trust and institutions / other association and institutions there is a penalty of Rs. 100 per day u/s 272A(2) for delay in filing the return.

5. In case of Political party exemption u/s section 13A shall not be allowed unless it furnishes the return of income.

6. In case of charitable trust and institutions exemption u/s section 11 and 12 shall not be allowed unless it furnishes the return of income.