Introduction

It is proposed to introduce a new provision in section 139 of the Act for filing an updated return of income by any person, whether he has filed a return previously for the relevant assessment year or not, and Section 140B for payment of tax.

Proposed Subsection (8A) of Section 139

A new subsection (8A) in section 139 is proposed to be introduced. The details are as follows:

Any person, whether he has furnished a return u/s.139 or not may furnish an updated return of his income or the income of any other person in respect of which he is assessable under the Act, for the previous year relevant to such assessment year, within twenty-four months from the end of the assessment year.

Not applicable if the updated return

• Is a loss return
• has the effect of decreasing the total tax liability determined on the basis of return furnished earlier
• results in refund or increases the refund

Not Eligible in following cases

• search has been initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of such person, or
• a survey has been conducted under section 133A, other than subsection (2A) of that section, in the case such person, or
• a notice has been issued to the effect that any money, bullion, jewellery or valuable article or thing, seized or requisitioned under section 132 or section 132A in the case of any other person belongs to such person, or
• a notice has been issued to the effect that any books of account or documents, seized or requisitioned under section 132 or section 132A in the case of any other person, pertain or pertains to, or any other information contained therein, relate to, such person.

This provision is for the assessment year relevant to the previous year in which such search is initiated, or survey is conducted, or requisition is made and two assessment years preceding such assessment year.

Other scenarios where updated return cannot be filed

• Already filed updated return for the assessment year; i.e., updated return can be filed only once for an Assessment Year
• any proceeding for assessment or reassessment or recomputation or revision of income under the Act is pending or has been completed for the relevant assessment year in his case, or
• the Assessing Officer has information in respect of such person for the relevant assessment year in his possession under the Prevention of Money Laundering Act, 2002 or the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 or the Prohibition of Benami Property Transactions Act, 1988 or The Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 and the same has been communicated to him, prior to the date of his filing of return under the proposed sub-section (8A) of section 139 of the Act, or
• information for the relevant assessment has been received under an agreement referred to in sections 90 or 90A of the Act in respect of such person and the same has been communicated to him, prior to the date of his filing of return under the proposed sub-section (8A) of section 139 of the Act, or
• any prosecution proceedings under Chapter XXII have been initiated for the relevant assessment year in respect of such person, prior to the date of his filing of return under the proposed sub-section(8A) of section 139 of the Act, or
• he is a person or belongs to a class of persons, as maybe notified by the Board in this regard.

A return filed under the proposed sub-section (8A) of the said section 139 shall be defective unless such return is accompanied by the proof of payment of tax as required under the proposed section 140B.

Section 140B: Payment of Tax, Additional Tax

1. When return under section 139 is not filed: Assessee will be liable to pay the tax due together with interest and fee payable under any provision of the Act for any delay in furnishing the return or any default or delay in payment of advance tax, along with the payment of additional tax. Tax payable shall be computed after taking into consideration amount of tax paid including advance tax, TDS, relief under section 89,90,90A,91 and any tax credit claimed to be set off in accordance with the provisions of section 115JAA or section 115JD
2. When return of income under Section 139 is filed: Assessee will be liable to pay the tax due together with interest and fee payable under any provision of the Act for any delay in furnishing the return or any default or delay in payment of advance tax, along with the payment of additional tax. Tax payable shall be computed after taking into consideration amount of tax paid including advance tax, TDS, the amount of relief or tax, referred to in sub-section (1) of section 140A, relief under section 89,90,90A,91 and any tax credit claimed to be set off in accordance with the provisions of section 115JAA or section 115JD. The aforesaid tax shall be increased by the amount of refund, if any, issued in respect of such earlier return.

In addition to the above, additional tax needs to be paid which needs to be calculated as follows:

1. 25% of aggregate tax and interest payable as determined in points 1 & 2 above if such return is furnished after expiry of the time available under sub-section (4) or sub-section (5) of section 139 and before completion of period of twelve months from the end of the relevant assessment year.
2. In other cases, the additional tax will be 50% of the aggregate tax and interest payable.

Interest u/s. 234A and 234C needs to be calculated till the date of filing return. Interest under section 234B needs to calculate on the assessed tax as per return under section 139(8A) as reduced by the interest paid in the return already filed. In case, no return under section 139 as per existing provisions is filed, interest paid will be taken as ‘nil’.