No penalty on Income declared voluntarily in revised ROI filed sec. 143(2) notice

Prema Gopal Rao vs. DCIT (ITAT Mumbai), I.T.A. No.8653/Mum/2011, Date of Pronouncement : 07.01.2015

We notice that the assessing officer has determined the concealed income at Rs.15,84,783/-. However, the additions made in the assessment order was only Rs.1,40,373/- and further the difference in Long term Capital gains between the revised return and the original return was only Rs. 1 1,27,484/-.…

Issue -Whether Ld.CIT(A) is  correct in denying additional claims on the ground that claims were not made by way of filing the revised return under Section 139(5) of the Income-tax Act, 1961, where the assessee did neither claim those additional claims in…

New Post has been published on http://www.indiantaxupdates.com/2013/08/01/missed-income-tax-return-filing-due-date-now-what/

Missed Income Tax Return Filing Due Date, Now What??

Filing Income Tax Return after the Due Date

People tends to miss due date of filing tax return due to lack of time or no planning.

Due dates of Filing Tax Return is provided under section 139(1)

Where the assessee is a Company 30th September of the Assessment Year Where the assessee is a person other than a company:-

where accounts of the assessee are to be Audited or

a working partner of a firm whose accounts are required to be audited under the Income Tax Act or any other law

30th September of the Assessment Year Any other assessee 31st July of the Assessment Year

But an assessee can also file belated tax return under section 139(4) upto 2 years from the end of financial year in which income earned. For example Tax Return for Financial year 2011-12 can be filed upto 31st March, 2014.

Read: Penalties of Filing Late Tax Return

Filing of belated return also attracts penalty which could be categorized as:

Case 1: No Tax Liability Pending

Where tax on income of assessee has already paid in form of TDS, Advance Tax, etc then the tax return can be filed till the end of assessment year without any penalty but if filed after the end of assessment year then penalty of Rs.5,000 u/s 271F, will be levied.

For example tax return of assessment year 2013-14 must be filed upto 31st July, 2013 (considering individual) but if no tax liability is pending then ITR can be filed upto the end the assessment year i.e. 31st March, 2014. In case assessee also failed to file ITR upto this date then by paying penalty of Rs.5,000, assessee can file ITR upto one year from the end of assessment year i.e. 31st March, 2015. Penalty in this case is on discretion of Assessing Officer.

Case 2: Tax Liability Exists

Sometimes assessee forgets to consider few incomes such as if he had worked under two employers but forgets to show salary received from first employer, thus owes taxes to the Government. The return filing date without penalty of Rs.5,000 remains same i.e. till the end of assessment year but interest of 1% shall be levied on the amount of unpaid tax u/s 234.

For Example: Mr. Sanyam’s Net Tax Liability for A.Y. 2013-14: Rs.50,000

TDS deducted by employer: Rs.35,000

Self-Assessment or Advance tax paid: Rs.5,000

Balance Tax payable by Mr. Sanyam: Rs.10,000 (50,000 – 35,000 – 5,000)

Suppose Mr.Sanyam files the tax return on 15th, November 2013 (before the end of the assessment year but after the due date)

In this case if Mr. X would be liable to pay simple interest on tax unpaid for 4 months (from August to November) but no penalty.

Tax Payable would be 10,400 [10,000 + 4%(10,000)]

Suppose Mr. Sanyam files the tax return after the end of the assessment year on 10th July, 2014 (i.e. after 31st March, 2014).

In this case, he will liable to a penalty of Rs. 5,000 u/s 271F along with the penalty of 1% on balance tax payable for 12 months (August, 2012 to July, 2013).

Tax Payable is 16,200 [10,000+5,000+(12%(10,000)]

Case 3: Carry Forward Losses

One need to take utmost care in this situation because as per section 80 if assessee fails to file tax return within prescribed time u/s 139(1) then he will not be able to carry forward the loss of that year and thus looses the benefit of set off of these losses against the income of next year. However, there is an exception to this rule i.e. this rule is not applicable on the losses from house property, which means House Property losses can be carried forward even if the income tax return is filed after the deadline.

Case 4: Tax Refund instead of Tax Liability

In case Government owes money to you i.e. you have any Tax refund then you can file the return even after 31st July of the assessment year without any issue. The only disadvantage will be that your refund will be processed late and you will get your money late.

Important points

No revision is possible of belated return (Return filed after the due date).

New Post has been published on http://www.indiantaxupdates.com/2013/07/19/how-to-revise-incorrect-uploaded-income-tax-return/

How to Revise Incorrect Uploaded Income Tax Return?

Income Tax Return e-filed can be revised upto the one year from the end of relevant assessment year or before the completion of assessment, whichever is earlier under section 139(5). For example, revised return for assessment year 2012-13 can be file upto 31st March, 2014.

How to revise e-filed tax Return?

Revising tax return is almost similar to filing original matter. The only and major difference is you have to select Revised’ return option in the Excel utility (Return Preparing Software). The same ITR form would be used unless there is a change in your sources of income.

You are required to mention the e-Filing Acknowledgement number and Date of filing the Original return. Further, you have to select the section 139(5) for filing revised return filing.

If you have already saved all the data previously while filing original return then just make the necessary changes before submission. Next step would be same as of original return, take printout of ITR-V and send it to CPC in Bangalore within 120 days of filing/submission/uploading revised return.

Also note that in case you have filed paper return then revised return must be paper return only and if you have file tax return electronically then the revised return should be filed electronically i.e. e-file.

How many times a return can be revised?

There is no restriction on the number of revise return but it can be filed only upto the expiry of one year from the end of relevant assessment year or before the completion of assessment, whichever is earlier.

Can belated return be revised?

A belated return u/s 139(4) i.e. tax return filed after the due date u/s 139(1) cannot be revised. Tax return filed within the prescribed time frame can only be revised number of times.