Return Filing & 26 eae ed # | Sec 139(1) ‘of return of income (ROT) &. 54F, 546, 54GA, 54GB) > Basic exemption, then return filing is compulsory €__| Following persons compulsory required to file the return 1. | Resident Tndividiual —» Resident (other than R but NOR) I os) ® ~ Beneficial owner of any asset ~ Beneficiary of any Asset | Gincluding financial interest)located Gincluding financial interest) outside India located outside India = has signing authority in any Account outside India Note! Tf income already included in the income of person “A” then person “B* not required to file return. (i) He has deposited amount more than one crore in aggregate in one or more. : current account maintain with banks or co. op. bank, or (ii) He has incurred foreign travel expenditure of more than & 2,00,000 for himself or any other person, or (iii) He had incurred electricity expenditure of more than & 1,00,000, or (iv) Fulfils other conditions as may be prescribed. (Added by FA 2019) ‘Due dates of Return filing Assessee who is required to furnish Report of Transfer pricing u/s 926. 30th Nov. of AY. ‘A. Company B. Audit requirement under Income Tax Act or any law a partner of firm whose accounts are required, 30th Sept of AY. 0 be audited.# | Sec 139(1A): Bulk Return Solaried assessee can file their return to Employer & then Employer shall f ur ni sh such return in bulk to I.T. Dept. upte due date. # | Sec 139(1C): Central Govt may exempt class of person to file ROT CG has been empowered to notify the class or classes of persons who will be exempted from the requirement of filing of ROT. Notification issued under section 139(1C) shall, as soon as may be after its issue, be laid before each House of Parliament. NOTIFICATION NO. 55/2019, DATED 26-7-2019 the requirement of furnishing a return of income u/s 139(1) of the said Act from AY 2019-20 onwards, namely: “(anon-resident,not beingacompany:or Gil) foreign company, who have any income chargeable under the said Act during a PY from any investment in an investment fund set up in an International located in India. ee 7 _ investment fund at the tax-rate in force as persection 194L BB; and (i) there is no other income during the PY for which the said class of persons, is otherwise liable to file the tax-return, Note: The exemption from the requirement of furnishing a return of income shall not be available to the saidclass of persons where a notice u/s 142(1) or 148 or 153A or 153C has been issued for filing a return of income for the AY specified thereinSec 139(3): Loss return ‘As per Sec 80, PGBP loss or Capital Loss or loss fromowning & maintaining race horses cannot be C/F if return filed af ter due date us 139(1). Notes: Loss can be set off even if return filed after due date. House property losses & unabsorbed depreciation can be ¢/f even if return late filed. Loss of specified Business (35D) also cannot be c/f if return filed late. The condition stipulated/ enumerated in sec. 80 applies only for the year in which the loss was sustained/ incurred. Tt does not apply to the ROT of the year in which carry forward is claimed. { As per CBDT Circular, Loss can be c/f even if ROT filed after due date and delay in filing of loss return in case of genuine hardship can be condoned by: Authority Return Losses erty PcrT upto 10,00,000 cext/ PecrT >10,00,000 upto 50,00,000 cept >50,00,000 Sec 139(4): Belated Return Tf Assessee fails to File return within due date then he can file belated return within following time limit 0) Before the end of Relevant AY. b) Before completion of Assessment 5. | Revising the o Whichever is earlier. # | Sec 139(5): Revised Return ‘Any person Filed returns u/s 139(1) or 139(3) or 139(4), if discover any omission ‘or a wrong statement in such ROT Filed earlier, then such person can file revised return within Following time limit, 0) Before the end of the Relevant AY. ) Before completion of Assessment, whichever is earlier. Notes: Belated return filed u/s 139(4) an be revised u/s 139(5) w.e.f. AY.17-18 2. | Therevised return substitutes original return from the date the original return was filed. 3.__| Assessee can revise return any no. of times within time limit. 4, | Areturn can be revised even af ter receiving intimation or refund under sec. 143(1) as, sec. 143(1) is not completion of assessment. inal return can be done only by way of filing a revised returnunder‘Areturn canbe revised even of fer receiving intimation or refund under sec 143(1) as Sec. 143(1) is not completion of assessment letter for the same ec 139(5) and not by way of filing ap. | Sec 13908) Defective Return | Return shall be considered as defective, if = ©) Return not led in prescribed form ) Proofs of tax not attached with return ©) Report u/s 4448 not submitted Tf return treated as defective, AO. shall intimate the defect to asseasee & give him an opportunity te rectify the defect within 15 days or extended time if asseasee does not rectify the defect then return shall be treated.as invalidreturn (void-ab: snitiod ‘Sec 1394) Return of Trust Tf total income before giving exemption u/s 11 & 12 is more than basic exemption, then seustis to file returns — ‘Sec 139(4B): Return of political Party Tf total income before giving exemption u/s 13A more than basic exemption, then political party is required to File the return. s€iaoad ranens of Hospitals, institutions ete, 3f Tote Fzome before giving exemption u/e 10 wore than Basic exemption, then Hospitals, Medical Institutions, infrastructure debt fund, mutuel fund, securitisation ‘Trust, Venture capital Co. Venture capital funds, research association, news agency, ‘trade union, investor protection fund, fund for the welfare of employees and their dependents, core settlement guarantee fundare required to file return. ‘Sec 139(4D): College, University or Educational Institution. Approved u/s 35 - Return Filing is mandatory. ‘Sec 139(4E) : Business Trust (REET / Invit) Return filing is mandatory. Sec 139(4F): Investment fund referred to in Sec TESUBReturn filing is mandatory. # Sec 139(4F): Investment fund referred to in Sec ITSUB Return Filing is mandatory # | Sec 140: Verification of Return In case of Verified by 1. | @ Anindividual - Himself b. Individual not present in India or ~ Competent to verify on behalf f ‘Mentally incapacitated of individual 2. | HUF ~ Karta b._ Karta not present in India or = Any adult member HUF karta mentally incapacitated 2. A partnership firm = Managing Partner b. If there is no managing partner =~ Any adult Partner eee 4 | aup Designated Partner b. If there is no designated partner = Any Partner 5 a. Company -_MD b, No MD = Any other Director ¢. Go. under liguidation ~ Liquidator 4, Application for corporate ~ Insolvency professional insolvency resolution process has been ‘oppointed by such ‘admitted by the Adjudicating ‘Adjudicating Authority ‘Authority under the Insolvency and Bankruptcy Code, 2016ve ‘Any Party Every person who is eligible to obtain Aadhoor number shall, on or o = MD Ne MD ‘Any other Director fe. C0, under liquidation = Liquidator ‘d. Application for corporate ~_Insolvency professional Ingolvency resolution process has been ‘oppointed by such admitted by the Adjudicating Adjudicating Authority ‘Authority under the Ingolvency and Bankruptcy Code, 2016 Political Party = eto Local Authority = Principal of ficer > Sec 139AA : Aadhar Number 50 notified in such manner as may be prescribed, Every person who is eligible to obtain Aadhaar number shall, on or after the 1st. July, 2017, quote Aadhaar number - @ in the application form for allotment of permanent account number: Gi in the return of income Tf Aadhar No not available then that person should quote application-id of Aadhar. Every person already holding PAN on 1 July 2017, shall link Aadhar with PAN within time allow by Govt, otherwise PAN shall be made inoperative after the date (Amended by FA 2019 w.e.f. 01/09/2019) | As per latest Notification assesses have to link Aadhar and PAN till 31st Dec, 19 | Note : As per C6 Notification, provision of section 139A Not apply to an individual who does not possess the Aadhar number or Enrolment TD and is (residing in the states of J&K, Meghalaya and Assam | Gi) anon-resident as per income tax act, 1961 [oil of tha age of 80 years ov mora at ary tima during tha BV 1._| Every person, if hi total income or the total income of ony other person in respect of which he is assessable under the Act during any PY exceeds the Basic ‘exemption. [on or before Siat May of the 2. [Every person carrying on any business or profession whose total sales, turnover or gross receipts are or is 3 | Teust required u/s 139 Gay (before the end of the. “a, | Every person being a resident, other than an individual, ‘oggregating Fo. 250,000 ormore ina FY (on or before 31at May of the immediately following FYwhich enters into a financial transaction of an amount |immediately following FY ‘aggregating to ® 2 50,000 ormore ina FY 5. | Every person who is a managing director, | on or before 31st May of the director, partner, trustee, author. founder. | immediately following FY in karta, chief executive officer, principal officer | which the person referred in or office bearer of any person referred in (4) | (4) enters into financial ‘above or any person competent to act on behalf | transaction specified therein. ‘of such person referredin(4) above l a! Cases where PAN to be quoted in Transactions [SL.No. Nature of transaction. Value of transaction 1. | Sale or purchase of a motor vehicle, other ‘All such transactions. ‘than two-wheeler 2. | Opening an account [other than a time-deposit | _ All such transactions. referred to at Serial No.12 and a Basic Savings Bank Deposit Account] with a banking company ‘or aco-operative bank. 3.__| Making an opplication to any banking company or | _ All such transactions. @.co-operative bank or to any other company or institution, for issue of a credit or debit card. 4,_| Opening of ab-Mat account. ‘All such transactions. 5, _| Payment toahotel or restaurant againstabillor | Payment in cash of ‘at any one time. > © 50,000. 6. | Payment in connection with travel to any Payment in cash% | Payment in connection with travel to any foreign country or payment for purchase of ‘any foreign currency at any one time Payment in cash of > © 50,000. 7__| Payment to a Mutual Fund for purchase of its units. - | Payment to a company or an institution for ‘acquiring debentures or bonds issued by it Payment to the RBI, for acquiring bonds issued byit Deposit with a banking company or a Co- operative bank or post office. TF Deposits in cash > © 50,000 Nature of transaction Purchase of bank drafts or pay orders or banker's cheques from a banking company or a Co-operative bank. ‘A time deposit with, — @abenking company or a co-operative bank (io Post Of fice: (Wii) a Nidhi_ (iv) a NBFC. | Value of transaction Payment in cash » © 50,000 Amount > © 50,000 or. aggregating to more than.13, Payment for one or more pre-paid payment insteuments, as defined in the policy guidelines for issuance and operation of pre-paid payment instruments issued by RBI or a banking company or a Co-operative bank or to ny other company of institution Payment in cash or by way of a bank draft or pay order or banker's cheque of aamount aggregating to » © 50,000 in aFy 14, Payment as life insurance premium to an insurer ‘Amount aggregating to > © 50,000 ina FY. 15, 16, A contract for sale or purchase of securities | (other thon shares), Sale or purchase, by any person, of shares of a company not listed in a recognised stock Amount > © 1,00,000 per ns Amount > © 100.000 per transaction ‘Sale or purchase, by any person. of shares of a company not listed in a recognised stock ‘exchange. “Amount > € 1,00,000 per [transaction ‘Sale or purchase of any immovable property. [Amount > ® 10,00,000 or SDV > © 10,00,000 ‘Sale or purchase, by any person, of goods or services of any nature other than those specified at S.No. 1 to 17 of this Table. if any. [Amount > € 2,00,000 per [transaction al Exceptions: ‘A Minor Child need not to apply for PAN. He can enter into financial transaction, by way of quoting PAN of any of his parents or his legal guardian, unless minor ‘child has his own income, which is not clubbable in the hands of his parents, but is ‘taxable in his own hands, A Non-resident 10 need not apply for PAN. A non-resident can enter inte suchEvery person whois required to furnish or intimate or quote his PAN, ond who, # | PAN Aadhar Interchangeable @ | has not been allotted a PAN but possesses the Aadhar number, may furnish or intimate or quote his Aadhar number in Hew of the PAN, and such person shall be allotted aPAN insuch manner as may be prescribed: (©) | has been allotted a PAN. and who has linked his Aadhar number in accordance with Provisions of 139AA, may furnish or intimate or quote hisAadhaar number in lieu of the permanent account number (Added by FA 2019 w.e.f.01/09/2019) CBD T Notification Rule 114 Amendment Any person, who has not been allotted a PAN but possesses the ‘Aachaor number and has furnished or intimated or quoted his Aadhaar number in lieu of ‘the PAN, shell be deemed to have opplied for allotment of PAN and he shall not be required to.apply or submit any documents under this rule ‘Any person, whe has not been allotted a PAN but possesses the Aadhaar number may apply for allotment of the PAN u/s 1394 to the authorities by intimating his Aadhaar umber and he shall not be required to applv or submit anv documents under this rule cea ‘Sec 1398: Tax Return Preparer (TRP) (2) | €BDT to frame a scheme whereby a specified class of persons can file their ROT through TRPs (2) |_A TRP means en individual who is authorised to act as TRP by CBDT, other than following persons: (@)__AChartered Accountant: (b) _ ALegal Practitioner: (©) _ AnOfficer of Scheduled Bank with which assessee maintains an account; (@)__ Employee of specified class of person (3) _|_ Specified class of persons means any persons who is required to file ROT, other than the following persons (@) _ACompany (b) Any other person whose, Books of Accounts are required to be audited under ‘sec, 4448 or under any other law. |_ Sec 139¢: Annexure-Less ROT |_CBDT to make rules providing for a class or classes of persons who shall not be. required to furnish any Certificate, Audit Report, any Document or o Receipt etc.©) ) © Sec 139C: Annexure-Less ROI CBDT to make rules providing for a class or classes of persons who shall not be required to furnish any Certificate, Audit Report, any Document or @ Receipt etc, along with their ROT, Empowers CBDT to make rules for the followings: A class of person or classes of personwho shall be required to furnish their ROT mandetorily ona computer readable media (\e.,e-filing of ROI) ‘The terms and the manner and the form inwhich such ROIs canbe filed electronically CBT may require the persons who are not required to attach any documents along with ROL, to furnish such documents whenever required by an AO.[Sec.139D] Sec 140 A : Self-Assessment Tox Assessee is required to pay taxes before Filing of return (after considering ‘advance tax, TDS, TCS, MAT, AMT credit, relief (include relief u/s 89) along with interest & Fees. Tf there is short payment then the amount so paid is first adjusted towards Fees, there after towards interest & balance towards taxes, 2020 Part-11 Sec 142(1): Enquiry before Assessment (Return, Info. & Accounts Notice) Return : Sec 142(1)(i): if assessee has not filed retum within time limit u/s 139(1), ‘then A.0. may issue anetice requiring him to furnish the return, Info/ A/c’s : Sec 142(1)(i): for the purpose of making an assessment, A.O, can issue notice - 0.) To produce Books of A/c’s & documents (Max 3 years prior to relevant P.Y.). b.) To furnish information including details of asset & liabilities (prior approval of J.C. required if information demanded is related to Assets & liabi included in Books of A/c’s ) Sec 142(2A): Special Audit (Audit by department) AO. may, at any stage of proceeding, require assessee to get his Books of A/c’s _specially audited under this section. ‘AO can direct special audit, having regards to complexities in A/<'s, volume of |- wo # | Sec 142(2A): Special Audit (Audit by department) 1._| A.©. may, at any stage of proceeding, require assessee to get his Books of A/c's specially audited under this section. 2. | AO can direct special audit, having regards te complexities in A/c’s, volume of A/e's, doubt about correctness of A/c’s, multiplicity of transactions in the A/¢'s & If iis in the interest of revenue (Dept). 3._|_ Direction can be issued with prior approval of CET/CCIT 4. | Books of Ales audited by CA. nominated by CET/CCIT & remuneration of Auditor shall be paid by CG. 5._|_ Direction can be given even if A/c's already audited u/s 448 or any other law. 6. _|_Anopportunity of being heard must be given before directing. 7. | Audit report has to be submitted within time allowed by A.O which can be extended but maximum time must not exceed 180 days. &._|_ Special audit can be directed for particular segment of A/c's lc. sales, purchase ete. 9. | Failure to get the Books of Accounts audited under this section or failure to furnish the Audit Report within the time allowed will lead to Best Judgement ‘Assessment under section 144 and it also attract a penalty of 10,000 under ‘section 272A(1) # __ Section142A : Reference to Valuation Officer (V.O). 1,_| The A.O. may for the purpose of Assessment, make a reference to V.O. to estimate ‘the value (including FMV) of any a) Asset or _b)Property or ©) Investments 2._| V.O. shall estimate the value of asset after considering evidences the assessee may produce or gathered by V.O. 3.__| V.O. shall send copy of the report to the A.O & Assessee within 6 months from the “end of the month in which a reference was made by A.0 to V.O. 4._| AO. may consider such report after giving a reasonable opportunity of being heard. # | Sec 143(1): Processing of Return (Intimation) ~_| Allreturns (100%) shall be processed u/s 143(1) & following adjustments to be made in ‘the returned income. @) Arithmetical errors in the return can be rectified. ») incorrect claim of assessee in ROI [egi- TDS claim not matching with from 26AS or deduction u/s 80C claimed more ‘than €1,50,000] a# | Sec 143(1): Processing of Return (Entimation) ~ | Allretuens (100%) shall be processed u/s 143(1) & following adjustments to be made in the returned income ‘2) Arithmetical errors in the return can be rectified. ) incorrect claim of assessee in ROT. [eg'- TDS claim not matching with from 26A5 or deduction u/s 80C claimed more than ® 1,50,000} €) Disallowance of loss if return filed after due date. ‘d) Disallowance of expenses indicated in the audit report but not taken into account in computing total income in the return, ©) Disallowance of deduction u/s 10AA, 801A/IAB/IB/ IC/ ID/TE, if return Filed after due date. 1)_ Addition of income appearing in Form 26AS or form 16A/16 which has not been included in computing the total Income in the return. Provided that no adjustment shall be made in point (f)in relation to areturn furnished for the AY 18-19 onwards (Added by FA 2018) Pye =| Before making any such edjustiment. an intimation hos fo be given fo aasessee requiring him fo respond te such edjustment. The response received, f any. has To be duly considered before effecting any adjustment. However, if No Response is received, within30 days of issue of suchintimation, the processing shallbe carried out incorporating the adjustments After processing, intimation shall be sent if there is refund/ demand /adjustment in losses {in practical life, intimation shall be sent inall cases), Thtimation shall be issued within 1 year from the end of financial year inwhich return wos filed # | Sec143(1D): Notwithstanding anything contained in sub-section (1), the processing of @ return shall not be necessary, where a notice has been issued to the assessee w/s143(2) Provided that the previsions of this sub-section shall not apply toany return furnished for the A. 17-18 onwardsELT reset “Sec 143(1D); Notwithstanding anything contained in sub-section (1) the processing of a return shall not be necessary. where a notice has been lasued to the assessee u/s 143(2) Provided that the provisions of this sub-section shallot oppy to any return furnished for the AY. 17-18 onwards ‘Sec 143(2): Notice of Scrutiny For making assessment us 193(3) A.O is required to serve notice u/s 143(2). The notice has to ‘served’ within 6 months from the end of the financial year in which return was filed . Notice us 143(2) can be issued after issuing Intimation u/s 143(1), ‘Sec 143(3): Order of Scrutiny Assessment Based on material & evidences furnished by assessee in response to notice u/s 143(2) or gathered by A.O, A.O. shall determine the income or loss of Assessee, by way of passing an order along with determination of tax poyable or refundable to assessee u/s 143(3). # | | Sec 143(3A)/(38)/(30)| Scheme to be notified by the CG for greater efficiency. (asevenvedy: ci wrability © ww wi ‘The CG is empowered to notify a Scheme for assessing total income or loss of the assessee u/s 143(3) ‘The Scheme would ensure greater efficiency. transparency & accountability by ~ (@)__ eliminating the interface between the AO and the assessee in the course of proceedings to the extent technologically feasible: (b) optimising utilisation of the resources through economies of scale and functional specialisation: (© _ introducing a team-based assessment with dynamic jurisdiction. The Scheme 0 notified has to be laid before each House of Parliament In order to give effect to this scheme, the CG, may direct on or before 31.03.2020 by way of notification, that the other provisions of this Act relating to lassesement of total income or loss would not apply or would apply with certain exceptions, modifications and adaptations specified in the notification. Such notification would be laid before each House of Parliament Note :- Notification of E- Assessment given as Annexure at end of this book1 2. 3 4. In case of any one of the following 4 defaults, A.O. shall make an assessment to the best of his judgment & knowledge. Failure to furnish ROT u/s 139(1) or u/s 139(4) or u/s 139(5) Failure to comply with notice u/s 142(1) (RIA Notice) Failure to comply with directions issued u/s 142(2A) (Special audit } Failure to comply with notice u/s 143(2) (scrutiny notice) A ——*—— K Kx: EZ = I a eee aa ea comply ithnetice re 420 « - woo — SA ca be tan pony aftr ising a SCN, ging an opporniy af ing heard fe the aaasseeu/t 144 [No apertuity of being heard given, if acesree falls fo const withratice/= 420 Nevefund can be sued by A. w/s 44 Assesemant u/s 43(3) & 144 shoud ba complied (order passed) within T2 onthe From he ed of RAY. (For AY 2019-20 enmarde) Were best judament esesement ie done, A, determines the income to The tect ef his omens, Sudgment ef the AO. anne be erraryand hee be Sesbdor Gos OTISIEL AG caper aT aaT TG ‘Sec 144A : Power of J.C. to issue Direction ‘A Joint commissioner (J.C.) may on his own motion, or on the application of Assessee or on reference made by A.O. call to examine the record of any proceeding in which ‘anassessment is pending, Trisnecessary then J.C, may issue directions for the guidance of A.O. [AC/DC/ETO} toenable him to complete the assessment. Directions shall be Binding on the A.O. Direction prejudicial to Assessee can be issued only after giving opportunity of ‘being heard.. woe v Sec 144A : Power of J.C. t0 issue Direction ‘A Joint commissioner (J.C.) may on his own motion, or on the application of Asessee or on reference made by A.O. call to examine the record of any proceeding in which ‘anassessment is pending, Trisnecessary then J.C, may issue directions for the guidance of AO. [AC/DC/ETO} ‘toenable him to complete the assessment. Directions shall be Binding on the A.O. Direction prejudicial to Assessee can be issued only after giving opportunity of being heard. ‘No appeal can be filed against direction. Appeal can be filed against assessment order. ‘Sec 144€: Reference to Dispute Resolution Panel (ORP) ‘The A.O. while making azsezsment is bound to follow procedure of forwarding draft ‘order in the following case: 1) Foreign Co. inwhose case A.O. wants to increase the income or decrease the loss of foreign co. b) Other Assessee inwhose case variation in total income arises on account of order of ‘TPO passed under Sec 926A vero ¥ The A.O. while making assessment is bound to follow procedure of forwarding draft ‘order in the following cases: # | _ Sec 144: Reference 1 Dispute Resolution Panel (ORP) af c) Foreign Co. in whose case A.O, wants te ncrease the income or decrease the loss of 'b) Other Assessee inwhose case variation in total income arises on account of order of ‘TPO passed under Sec 92CA. | foreign Co. | 2.| A. shall forward. copy of draft order to the Assessee aii EE eee ao.———— wv Within 30 days from the date of receipt of draft order, the assessee shall 0) File his acceptance to AO. bb) File his objections to A.O. & DRP. Tf ossessee files his acceptance then A.O shall pass the final order within one month. from the end of the month inwhich acceptance is received by AO. Tf the assessee files objection then DRP shall iesue direction with 9 months from the lend of the month inwhich draft order is forwarded te Assessee, RP shall issue Direction on the basis of Draft order, objection of assessee, material gathered by DRP, evidence produced by Assessee, After receiving direction, the A.O shall paes the final order within one month fromend lof the month inwhich directions are received by A.O. | ppp directions are received by A.O are binding on A.O. [RP may confirm, reduce or enhance the variation purposed in the dreft order. Lf Assessee is not satisfied with Final order passed by A.O. in pursuance of direction lof DAP. they can file an oppeal to ETAT (Appellate Tribunal). (Dept can't challenge [Catrectionof on») ea a # | Sec 145(0): Method of Accounting @ | Sec 145(2} Encome computation & disclosure Standards (ICDS) €6 has been empowered to notify TCDS. CG has recently notified 10 TCDS (except individual / HUF not reqd to get Ase ouditedu/a 44 AB) Part -11 ‘Construction Contracts Revenue recognition Tongible Fixed asset Cro VE ‘The effect of change in Foreign Exchange vir Govt. Grants VIII Securities xr Borrowing cost x Provisions, Contingent liabilities & Contingent ass