Finance Act 2021 shrank the time restrict for submitting a revised/belated return making it analogous to three months earlier than the tip of the related evaluation yr. Finance Act 2022 inserted Part 139(8A) whereby an assessee could file a return both for the primary time or could revise an already filed regular/loss/belated/revised return inside 24 months from the tip of the related evaluation yr offered they pay a further tax of 25% (for returns filed inside 12 months from the tip of the evaluation yr) or 50% (for returns filed past 12 to 24 months from the tip of the evaluation yr) of the particular tax payable with curiosity in Type ITR – U.
Revising a return filed below sec. 139(8A) isn’t permitted, and the availability is accessible just for enhancement of earnings/discount of loss and never for discount of earnings/enhance of loss. Part 139(8A) thus is a one-way ticket to reinforce tax revenues with a departmental “nudge” for omissions/non-disclosure of incomes, if any. Claiming to hold ahead losses by submitting the primary return below Part 139(8A) isn’t attainable. Revising regular/loss/revised return through Part 139(8A) return is permitted the place the carry ahead of losses would usually be accessible topic to the adjustments made in Part 139(8A).
By aligning the due dates for revised and belated returns below Sections 139(4) and (5), the regulation has given an assessee a a lot narrower window for doing corrections. Within the case of Company/ Switch pricing assessees, it’s nearly not more than 30/60 days at finest. Thus the assessees are anticipated to be amazingly cautious whereas submitting their returns.
Henceforth, an assessee who recordsdata a return earlier than the due date will get two alternatives to right his return, one through a revised return, which may have upward/downward earnings vis-a-vis the unique return after which solely an upward revision of earnings through Part 139(8A).
The return revision route will probably be accessible just one as soon as to an individual who recordsdata a belated return through Part 139(8A), and it’s only an upward revision.
The belated return idea may thus change into out of date as a result of insertion of Part 139(8A). For AY 2023-24, the timeline for a revised/belated return is proscribed to Dec 31, 2023. Thus, the regulation gives solely the route of Part 139(8A) thereafter, the place an assessee has to inevitably pay 25% or 50% extra tax for his errors/time-lapse even when he has a real motive/error. The above actually requires an assessee to bootstrap his compliance timelines backwards.
Suo moto rectification is feasible just for “errors obvious on document”, the time restrict being inside 4 years from the tip of the related monetary yr. Nevertheless, the window of suo moto rectification below Part 154(2)(b) is accessible for an assessee with the caveat that he/she should write to the Assessing officer to justify/invoke the identical. The e-filing portal doesn’t enable it to be an choice for an assessee for adjustments in earnings, even whether it is for real causes. By shrinking the timelines on revised/belated returns, making an assessee go mandatorily through Part 139(8A) and plugging suo moto rectification route as a one-way site visitors, the factor of audi alteram partem (ie let the opposite facet be heard) misplaced for an assessee. Belated return and rectification by the assessee may quickly change into historical past accessible solely within the textbooks.
The above amendments, together with the division’s AIS (Annual Info Assertion) info and E-campaign, will definitely be testing occasions for all assessees. Just lately, the tax division despatched salvos for AY 2021-22/2022-23/2023-24, asking filers to confirm the return information with the information on AIS and proper the mismatches if required by submitting return u/s 139(8A) whereever required. Readers must do not forget that the 24-month window timeline for Part 139(8A) for AY 2021-22 will expire on March 31, 2024, and for the following years, it’ll come at a steeper price of 25%/50% additional tax plus curiosity.
The author is a Chartered Accountant