JUNE 18, 2018

By Lukose Joseph, CA & Anil P Nair, CA

THE sudden change in law with respect to the last date of filing the income tax return(ITR) relating to Section 139(4) in comparison to previous history upset the cart of many otherwise law obedient taxpaying citizens. Due to the above and other reasonable causes there are many who couldn't file the ITR within the dead line now mandated and some of the mare asking earnestly how they could rectify the lapse or atone for the omission.

Before suggesting a solution, let us have an overall look on the provisions of filing of income tax return and the consequences of such failure.

By virtue of section 139(1) due date of filing of return is July 31 of the assessment year in cases other than in which audit under any law is required. In audit cases, due date of filing of return is September 30. However if the assessee is required to furnish report under section 92E pertaining to international/specified transaction(s), that date will be November 30.

In case of loss return if it is not furnished within the specified due date, loss will not be allowed to be carried forward. Such stipulation is not there for carry forward of depreciation.

If the return is not furnished within the time allowed u/s 139(1) or within the time allowed in notice issued u/s 142(1) the return may be filed before the end of the relevant assessment year or the completion of the assessment whichever is earlier. Assessment means assessment under section 143(3) or 144. Intimation under section 143(1) is not an assessment order.

In refund cases, refund will not be allowed if return is not filed before the end of the relevant assessment year.

The assessee shall be liable for penalty under section 234F (depending upon the date of filing) if the return is filed late with effect from AY 2018-19.Penalty prescribed under 271F is withdrawn with effect from 1 st April 2018 being section 234F is activated.

CBDT has the power to condone delay in filing refund claim and claim of carry forward of losses under Section I I9 (2) (b) of the Income-tax Act subject to conditions which is detailed in Circular No 9/2015 dated 9/6/2015 .

The Board reserves the power to examine any grievance arising out of an order passed or not passed by the authorities prescribed under the circular depending upon the amount of refund/ carry forward of loss/losses and issue suitable directions to them for proper implementation of this Circular. However, no review of or appeal against the orders of such authorities would be entertained by the Board.

The conclusion is, the decision of the Board will be final relating to carry forward of loss/losses or refund.

Now the question before us: if the assessees want to file a belated return (but online facility being blocked as time barred)or to pay tax that he earlier omitted,so as to avoid/minimize penalties including under section 221 (1), what is the recourse available to such an assessee?

++ The assessee may give a request to the Assessing Officer (AO) to issue a notice under section 148/142(1) so as to enable assessee to file return online.

What if the officer does not oblige?

++ File a 'paper return' [and if applicable, with an audit report online]also with the proof of tax payment in full along with a covering letter that usually will be acknowledged at Income Tax Office which may be used as a defense for any future legal action including penalty and other proceedings.

Note: Alternative expert opinions, if any, are solicited.

(The views expressed are strictly personal.)