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May 30, 2000

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Ganesh Jagadeesh & Co

April is over. So is May. And the last date for filing of returns is June 30 for salaried individuals. Incidentally, the latter also applies to individuals having income from house property, capital gains and other sources (but not income from business or profession) and not subject to audit.

What if you fail to file your returns by this date?
The assessing officer can, for the purpose of making assessment, serve on you a notice u/s 142(1) requiring you to submit your returns in the prescribed form on or before a date specified in the notice. Failure to comply will attract penalty u/s 271(1)(b).

What are the various penalties?

  • Section 234A
Requires simple interest @ 1.5 per cent per month or part of month (even a day's delay is taken to be a full month) to be paid by the assessee if a return of income is furnished after the due date or is not furnished.
The interest is to be calculated on the following amount: Excess of (tax on assessed total income) over (advance tax paid and tax deducted at source excluding self-assessment tax paid u/s 140A).
The period for which interest is payable is measured from the date immediately following the due date for filing of return (July 1) to the date of submitting the return (if filed after the due date) or on date of completion of assessment u/s 144 (if no return has been filed).

Let's figure it out with an example
You should have filed your return on or before June 30, 2000 for assessment year 2000-01.
However, if you filed your return on say December 5, 2000, then you pay interest for a period of six months (July to December) @ 1.5 per cent per month. So it totals to 9 per cent.
Assume you did not file your returns at all and assessment u/s 144 got completed on February 4, 2002. That means you will be charged interest for 20 months (July 2000 to Feb 2002) which totals to 30 per cent.

  • Section 271F
Rs 1,000 for failure to voluntarily furnish return of income as required by section 139(1) before the end of the relevant assessment year (eg: if return is not filed before March 31, 2001 for assessment year 2000-01)

Rs 500 for failure to furnish return of income under one-by-six scheme (obligatory filing of return as required by proviso to section 139(1) on or before due date (eg: if return is not filed before February 29, 2000 for assessment year 2000-01)

  • Section 271(1)(b)
A minimum penalty of Rs 1,000 for each failure and a maximum penalty of Rs 25,000 for each failure to comply with a notice u/s 142(1)

Did you know carry forward of loss may be denied?
The last date assumes greatest importance for a return of loss because missing the date will mean that the following losses can't be carried forward

  • Business loss (speculative or otherwise)
  • Capital loss
  • Loss from the activity of owning and maintaining race horses

Can the last date be extended?
The assessing officer does not have any statutory power to extend the date of filing of returns. But, if the last day for filing your return happens to be a holiday for the Income Tax office, you can file your return on the next day on which the office is kept open. That day will be taken to be the last date for filing of returns.

Is there any provision for belated returns?
If you have not submitted your returns by June 30 or within the time allowed under a notice issued u/s 142(1), you can do so at any time before the end of one year from the end of the relevant assessment year but before the assessment is made. Simply stated:

  • You have to file returns for the previous year 1999-2000 before June 30, 2000 which is the last date.
  • The relevant assessment year is 2000-01 which ends on March 31, 2001.
  • If you fail to file your return before the last date, you can still file a belated return before March 31, 2002, which is the end of one year from the end of the relevant assessment year.
  • If your assessment is completed before March 31, 2002, then your return should be submitted before the completion of assessment. You can't stretch your borrowed time any further.
  • Thus, earlier of completion of assessment or March 31, 2002 is the time available upto which your belated return can be filed.

Can you revise your return?
You have a statutory right (no permissions needed) to file a revised return if subsequent to your filing of the original return you discover that the return is significantly affected by an omission or wrong statement made therein. But, very importantly, remember that omissions or wrong statements will be allowed to be revised ONLY if they have been inadvertently made.

If at the time the original return was filed, you had concealed information or made false statements therein or were aware that you were filing a false return, you will be denied the benefit of a revised return. Also, your original return must have been filed u/s 139(1) or in pursuance of a notice u/s 142 to be eligible for revision. Belated returns certainly do not qualify for revision.

Note that you can revise your original return ONLY by filing a revised return and not merely by submitting an application seeking to revise your returns. Also, a revised return supercedes the original return. The Act permits you to file a second revised return supplanting the first revised return. But be sure to get it absolutely correct the second time around.

What's the time limit for a revised return?
The time limit for filing of a revised return (including the first and second revised returns) is the same as for a belated return. Thus, for the assessment year 2000-01, a return originally filed on or before June 30, 2000 can be revised and filed before March 31, 2002 i.e. end of one year from the end of the assessment year - March 31, 2001, but ONLY if assessment has not been completed earlier.

Can the return be invalid?
If your return is perceived by the assessing officer to be defective or incomplete, then he can offer you an opportunity to rectify the defect within 15 days from the date he intimates you or within such further extended time as he may allow.
If you fail to rectify the defect within the allowed time limit, the officer can treat the return as being invalid. When a return is held to be invalid, it would tantamount to your not having filed a return at all. In such a case, the Act empowers him to condone the delay should you rectify the defect beyond the allowed time limit but before the completion of assessment. In the event of the officer condoning the delay, the return will be treated as a valid return.
While on the subject of the assessing officer and his powers, it may be noted that he can ask you to remove even such defects from the return as may not be responsible for making the return invalid.

What's a defective or incomplete return?
A return in which you have not filled in the annexures, statements and columns in the return relating to computation of income chargeable under each head of income, computation of gross total income and total income. Or, it could be that you have not enclosed a statement showing the computation of tax payable on the basis of the return, proof of tax, if any, claimed to have been deducted at source and the advance tax and tax on self-assessment, if any, claimed to have been paid

Who should sign the return?
You, of course. An unsigned return (or one without a thumb impression at least) is not considered a valid return. If you are not going to be in the country, then you can authorise another person through a valid power of attorney to sign your return on your behalf. If under any circumstance (including being inhibited owing to mental disabilities), an individual can't sign his own return, any other person holding a valid power of attorney (or guardian in the case of a mentally disadvantaged individual) can sign on behalf of the individual.

Also see: Do you need to file a return?

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