Return of Income (Section 139 to 140A)

Contents :

Income Tax Returns (For Individuals) (Section 139).
Compulsory Filing of Return of Income [Section 139(1)].
Time for Filing Return of Income.
Forms of Return.
Obligations of Filing Tax Returns.
Documents for Filing Tax Returns.
Permanent Account Number (PAN) (Section 139A).
Scheme for Submission of Return through Tax Return Preparers (Section 139B).
E-Filing of Income Tax Returns (Section 139D).
Return of Loss [Section 139(3)].
Belated Return [Section 139(4)].
Revised Return (Section 139(5)).
Defective or Incomplete Return of Income [Section 139(9)].
Return by whom to be Signed (Section 140).
Self-Assessment (Section 140A).

RELATED QUESTIONS :

Q. What are income tax returns? Discuss the various forms of returns.

Q. Discuss the time for filling return of income. What documents are required for filing tax returns?

Q. What is e-filing of income tax returns? Describe the procedure for e-filing of income tax return in detail.

Q. Describe the scheme for submission of return through tax return preparers under section 139B.

Q. Write a short notes on :

i) PAN

i) Belated return

ii) Revised return

iv) Defective return

Q. Explain the section 140 and 140A under the return of income.

Income Tax Returns (For Individuals) : (Section 139) :

The income Tax Act, 1961 contains provisions for filing of return of income. Return of income is the format in which the assessee furnishes information as to his total income and tax payable. The format for filing of returns by different assessees is notified by the CBDT. The particulars of income earned under different heads, gross total income, deductions from gross total income, total income and tax payable by the assessee are generally required to be furnished in a return of income. In short, a return of income is the declaration of income by the assessee in the prescribed format.

Following persons are required to file the return of income, duly filled up in completely and correctly -

Individuals, Hindu Undivided Family, Association of persons (AOP), Body of persons (BOP), and artificial persons having income exceeding the limit under Income tax Act.
Nonresident Indian except those covered u/s 115AC and 115G, having taxable income exceeding Rs. 1,50,000/-.
Societies and trusts deriving income from property held for charitable or religious purposes having taxable income exceeding Rs. 1,50,000/-.
A scientific research institution, news agency, association, fund or trust or educational institutes, Hospitals or medical institutions or trade union, whose total income exceeding Rs. 1,50,000/-.
A university, college, or other institution referred to u/s 35, not otherwise required to furnish return of income.
All partnership firms irrespective of income.
Co-operative society, company and local authority irrespective of income.

Compulsory Filing of Return of Income [Section 139(1)] :

Every person, being an individual or a HUF or an AOP or BOI or an artificial juridical person -

1) Whose total income or the total income of any other person in respect of which he is assessable under this Act during the previous year.
2) Without giving effect to the provisions.
3) Exceeded the basic exemption limit.

Is required to file a return of his income or income of such other person on or before the due date in the prescribed form and manner and setting forth the prescribed particulars.

The basic exemption limit is Rs.2,50,000 for individuals/HUFs/AOPs/BOls and artificial juridical persons Rs.3,00,000 for resident individuals of the age of 60 years but less than 80 years and Rs.5,00,000 for resident individuals of the age of 80 years or more at any tine during the previous year. These amounts denote the level of total income, which is arrived at after claiming the admissible deductions. However, the level of total income to be considered for the purpose of filing return of income is the income before claiming the admissible deductions. If any person having furnished a return under Section 139(1) or in pursuance of a notice issued under Section 142(1), discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before completion of assessment, whichever is earlier.

Persons whose income is exempt u/s 10(38) shall be liable to file return of income within the due date if income of such person without giving effect to this. Section exceeds maximum amount not chargeable to tax. These amendments effective from 1st day of April, 2017 and accordingly apply in relation to assessment year 2017-2018 and subsequent years.

Time for Filing Return of Income :

The due dates for filing the returns of income are as given below :

Different Situations

Due Date of Submission of Return

1) Where the assessee is required to furnish a report in Form No. 3CEB under Section 92E pertaining to international/specified domestic transaction(s).

November 30

2) Where the assessee is a company [not having international or specified domestic transaction).

September 30

3) Where the assessee is a person other than a company [not having international or specified domestic transaction(s)]

i) Where accounts of the assessee are required to be audited under any law

ii) Where the assessee is a "working partner" in a firm whose accounts are required to be audited under any law

iii) In any other case

September 30

July 31

Forms of Return :

These forms of return are given below :

New ITR Forms	Subject
ITR-1 (i.e..SAHAJ)	For individuals having income from salary/one house property (not being brought forward loss from previous years/income from other sources (not being loss and not. being winning from lottery/income from race horses).
ITR-2	For individuals and HUFs not having business/professional income.
ITR-3	For individuals/HUFs being partners in firm and not carrying-out business or profession under any proprietorship.
ITR-4	For individuals and HUFs having income from a proprietary business or profession .
ITR-4S (i.e., Sugam)	For individuals/HUPs deriving business income and such income is computed in accordance with special provisions referred to in Sections 44AD and 44AE.
ITR-5	For firms, AOPs and BOls or any other person (not being individual or HUF or company or to whom ITR-7 is applicable).
ITR-6	For companies other than companies claiming exemption under Section 11.
ITR-7	For persons including companies required to furnish return under Section 139(4A)/(4B)/(4C)/(4D).
ITR-V	Where the data of the retum of income in Forms ITR-1, ITR-2, ITR-3, ITR-4, ITR-5 and ITR-6 transmitted electronically without digital signature.

Amendments in Sub-Section of 139 (A.Y. 2015-16) :

The existing provisions contained in sub-section (4C) of section 139, inter alia, provide for filing return of income by certain entities whose income is exempt under section 10 of the Act.

It is proposed to amend sub-section (4C) of section 139 so as to provide that Mutual Fund referred to in clause (23D) of section 10 and securitisation trust referred to in clause (23DA) of section 10 and Venture Capital Company or Venture Capital Fund referred to in clause (23FB) of section 10 shall, if the total income in respect of which such fund, trust or company is assessable, without giving effect to the provisions of section 10, exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and all the provisions of the Act, so far as may be, apply as if it were a return required to be furnished under sub-section (1) of the said section 139.

It is also proposed to insert a new sub-section (4E) in section 139 so as to provide for filing of return of income by business trust which is not required to furnish return of income or loss under any other provision of the section.

(w.e.f. 1-04-2016) It, is proposed to provide that a university, hospital or other institution shall be required to furnish a return of income if he total income of such university, hospital or other institution exceeds the maximum amount which is not chargeable to income-tax.

(w.e.f. 01-04-2016) Section 139(4F) for Compliance requirement of furnishing return of income has been proposed in respect of investment funds by amending

Section 139(4C).

The proposed investment fund under section 115UB will also have to file return of income under section 139 though such investment funds are given a pass through status.

Obligations of Filing Tax Returns :

It is a legal obligation for every individual to file a return of income, whose taxable income during the year has exceeded the exemption limit.

Documents for Filing Tax Returns :

It is fruitless to go to the war front without proper arms and ammunition. Hence, it is always advisable to keep all the documents required for preparation of the income tax return ready and handy before calculating the tax liability and preparing the tax return. Some common documents required by an individual for preparing the return are as follows :

1) Form No. 16 (Received from the Employer) :

This will help to know the income from salary and tax deducted by your employer from your salary income.

2) Form No. 16A (Received from All the Payers who have Deducted Tax) :

You will first have to get this form collected from the parties who have deducted tax while making payment during the year. This includes banks and companies (with whom you have kept fixed deposits), parties to whom you have given loan, tenant to whom you have rented the property, etc.

3) Summary of All Bank Accounts Operated during the Year :

This summary will give an idea about all the income earned during the year and investments and expenditure incurred. This assures that no part of income is left out and misses out any eligible deductions.

4) Details of Property Owned during the Year :

If you have bought some property during the year, you will need details of rent received and receipts of municipal tax paid during the year. In addition to this, if you have taken this property through a loan, do carry the loan details and a copy of certificate of interest paid during the year.

5) Sale and Purchase Bill / Documents / Contract Note in Respect of Investments / Assets Sold during the Year :

You will also need purchase documents corresponding to the sales made during the year. In case of a large number of transactions, it is advisable that you prepare a statement of sale and corresponding purchase of these investments and arrive at the amount of profit or loss, before actually calculating your taxable income.

6) Details of Tax Payments Made during the Year :

This is required only if you have made advance tax payment during the year.

Permanent Account Number (PAN) (Section 139A) :

Every person whose taxable income exceeds the basic exemption limit during an accounting year, is required to obtain Permanent account number (PAN) once forever by making an application in Form 49A, before 31st May of the Assessment year.

Income tax department issues Permanent Account Number called PAN to all those persons who apply for it. The application is made in form no. 49A along with a prescribed. fee and documents. Computer allots the PAN randomly. Income tax department can get all information about the assessee.

It is a 10 digit alphanumeric number which is printed on a laminated card, known as PAN card along with other details like PAN number, name of applicant, father's name, date of birth and passport size photo. PAN is a 10 digit alphanumeric code the first 5 digits are the alphabets, next 4 digits are the numbers and the last one digit is also an alphabet, e.g. ADMPM7588C is an example of PAN. It is mandatory to mention the PAN on income tax return. (PAN number is taking place of General Index Registrar (GIR) Number. GIR number is given by an assessing officer to assessec who also contains details of assessing officer.)

Under Section 139A of Income Tax Act, 1961, PAN number is required for following persons :

1) Whose total annual income is more than the amount which is not chargeable under Income Tax Act.
2) Whose income through business or other profession is more than Rs. 5 lacs.
3) Who is filing income tax return.

PAN is necessary in case of following transactions :

1) Filing income tax return.
2) Any correspondence with income tax department.
3) Submitting challans for payment of any tax to the department.
4) At the time of verification of identity of assessee in income tax department.

Therefore, it is unique for every person. Wrong quoting of PAN is an offence, which is punishable with a fine of Rs.10,000. PAN is actually used by income tax department as our account number on which all the details relating to persons income are stored. It helps income tax department in keeping track of incomes of a person.

The Central Government has. specified he following persons who shall apply to the Assessing Officer, for allotment of permanent account number :

Persons	Time Limit for Application
1) Exporters and importers who are required to obtain an importer- exporter code under Section 7 of Foreign Trade (Development Regulations) Act, 1992.	Before making any export or import.
2) Person who will register under the aforesaid Act(s) after December 11, 2001.	Before making any application under the Central Sales Tax Act or general sales tax law of State/Union territory.
3) Persons who issue invoice under rule 57E requiring registration under the Central Excise Rules.	As given above.
4) Persons who are registered under the Central Sales Tax Act or general sales tax law of the appropriate State or Union territory on or before December 11, 2001.	By January 10, 2002.

The PAN is required to be obtained by the followings :

1. In the case of sales, turnover or gross receipt of the business exceeds Rs5,00,000/- during an accounting year.

2. In case of trust in receipt of income from property held for charitable purpose.

3. In case of employer who is required to furnish a return of fringe benefits u/s 115WD.

4. Exporters and importers.

5. Assesses under Central Excise Act.

6. Persons issuing Cenvatable invoice.

7. Service tax Assesses.

8. Persons registered under the Central Sales Tax Act or under the general sales tax Act of the appropriate State.

9. The Government may require any class or classes of persons to apply for PAN within specified time.

The application for PAN to be along with following documents :

1. Proof of identity

2. Proof of address

3. In case of company copy of registration

4. In case of firm, copy of partnership

5. In case of trust, copy of trust deed

6. In case of AOP/BOP. copy of agreement

The UTI Investor Services Ltd, office shall issue the PAN and a multi purpose laminated PAN card within 15 days of application.

Scheme for Submission of Return through Tax Return Preparers (Section 139B) :

1) This section provides that, for the purpose of enabling any specified class or classes of persons to prepare and furnish their returns of income, the CBDT may notify a scheme to provide that such persons may furnish their returns of income through a Tax Return Preparer authorised to act as such under the scheme.

2) The Tax Return Preparer shall assist the persons furnishing the return in a manner that will be specified in the' scheme, and shall also affix his signature on such return.

3) A Tax Return Preparer can be an individual, other than :

i) Any officer of a scheduled bank with which the assessee maintains a current account or has other regular dealings.
ii) Any legal practitioner who is entitled to practice in any civil court in India.
iii) A chartered accountant.
iv) An employee of the specified class or classes of persons.

4) The "specified class or classes of persons" for this purpose means any person other than a company or a person whose accounts are required to be audited under Section 44AB (tax audit) or under any other existing law, who is required to furnish a return or income under the Act.

5) The scheme notified under the said section may provide for the following :

i) The manner in which and the period for which the Tax Return Preparers shall be authorised.
ii) The educational and other qualifications to be possessed, and the training and other conditions required to be fulfilled, by a person to act as a Tax Return Preparer.
iii) The code of conduct for the Tax Return Preparers.
iv) The duties and obligations of the Tax Return Preparers.
v) The circumstances under which the authorisation given to a Tax Return Preparer may be withdrawn.
vi) Any other relevant matter as may be specified by the scheme.

6) Every scheme framed by the CBDT under this section shall be laid before each House of Parliament while it is in session to make the same effective.

7) If both the houses decide in making any modification of scheme, then the scheme will have effect only in such modified form.

8) Similarly, if both the Houses decide that any scheme should not be framed, then such scheme will thereafter be of no effect.

9) However, such modification or annulment should be without prejudice to the validity of anything previously done under that scheme.

10) Accordingly, the CBDT has, in exercise of the powers conferred by this section, framed the Tax Return Preparer Scheme, 2006, which came into force from 1.12.2006.

As per this scheme, Tax Return Preparer means any individual who has been issued a Tax Return Preparer Certificate and a Unique Identification Number by the Partner Organisation to carry on the profession of preparing the returns of income in accordance with the provisions of this scheme.

However, persons referred to in clause (ii) or clause (iii) or clause (iv) of sub-section (2) of Section 288, namely, any officer of a Scheduled Bank with which the assessee maintains a current account or has other regular dealings, any legal practitioner who is entitled to practice in any civil court in India and an accountant are not eligible to act as Tax Return Preparers.

It may be noted that as per Section 139B(3), an employee of the "specified class or classes of persons" is not authorised to act as a Tax Return Preparer. Therefore, it follows that employees of companies and persons whose accounts are required to be audited under Section 44AB or any other law for the time being in force, are eligible to act as Tax Return Preparers.

E-Filing of Income Tax Returns (Section 139D) :

The E-Filing- External website that opens in a new window facility was introduced by the Income Tax Department for the first time during assessment year 2006-07. At present, it is mandatory for companies and firms requiring statutory audit under Section 44AB to e-file their Income Tax Returns. Also, the e-filing benefit has been extended to all assesses.

The registered users can avail online services such as :

submit Returns/Forms, view Form 26AS (Tax Credit), Outstanding Tax Demand, ITR-V Receipt Status, CPC Refund Status, Rectification Status, Jurisdiction of Accessment Officers, etc.

The Board may make rules providing for -

The class or classes of the persons who shall be required to furnish the return in electronic form.
The form and the manner in which the return in the electronic form may be furnished.
The documents, statements, receipts, certificates or audited reports which may not be furnished along with the return in electronic form but shall be produced before the Assessing Officer on demand.
The computer resource or the electronic record to which the return in electronic form may be transmitted.

Types of E-Filing -

There are three ways to file returns electronically.

Option 1: Use digital signature, in which case no further action is required.
Option 2: File without digital signature, in which case the duly signed ITR-V form is to be submitted to CPC Bengaluru using Ordinary Post or Speed Post within 120 days of transmitting the data electronically. This completes the Return filing process for non-digitally signed returns.
Option 3: File through an e-return intermediary who would do eFiling and also assist the Assessee file the ITR -V Form.

Procedure for E-Filing of Income Tax Returns :

Before one start the process, keep the bank statements, Form 16 issued by their employer and a copy of last year's return at hand. Next, log on to www.incometaxindiaefiling .gov.in. Follow these steps :

Step 1: Register yourself on the website. Your Permanent Account Number (PAN) will be your user ID.

Step 2: View your tax credit statement Form 26AS for the financial year 2013-14. The statement will reflect the taxes deducted by your employer actually deposited with the I-T department. The TDS as per your Form 16 must tally with the figures in Form 26AS. If you file the return despite discrepancies, if any, you could get a notice from the I-T department later.

Step 3: Under the 'Download' menu, click on Income Tax Return Forms and choose A.Y. 2016-17 (for financial year 2015-16). Download the Income Tax Return (ITR) form applicable to you. If your exempt income exceeds Rs.5,000, the appropriate form will be ITR-2. If the applicable form is ITR-1 or ITR 4S, you can complete the process on the portal itself, by using the 'Quick e-file ITR' link.

Step 4: Open the downloaded Return Preparation Software (excel utility) and complete the form by entering all the details, using your Form 16.

Step 5: Ascertain the tax payable by clicking the 'Calculate Tax' tab. Pay tax (if applicable) and enter the challan details in the tax return.

Step 6: Confirm all the information in the worksheet by clicking the 'Validate' tab.

Step 7: Proceed to generate an XML file and save it on your computer.

Step 8: Go to “Upload Return' on the portal's left panel and upload the saved XML file after selecting 'A.Y. 2016-17' and the relevant form. You will be asked whether you wish to digitally sign the file. If you have obtained a DS (digital signature), select Yes. Or, choose 'No'.

Step 9: Once the website flashes the message about successful e-fling on your screen, you can consider the process to be complete. The acknowledgment form ITR-Verification (ITR.V) will be generated and you can download it.

Step 10: Take a printout of the form TTR-V, sign it preferably in blue ink, and send it only by ordinary or Speed post to the Income Tax Department-CPC, Post Bag No-1. Electronic City Post Office, Bangalore 560 100, Karnataka, within 120 days of filing your return online.

Return of Loss [Section 139(3)] :

A return filed by an assessee indicating the amount of loss incurred is called Loss return. It is covered us 139(3) of the income Tax Act. Thus, if an assessee submits his return of income in which assessee declares the loss incurred by him during the previous year, and then the return of income is called Loss return. It's important to note here, that if the loss return is submitted before the due date of filing of return of income, then only the loss can be carried forward.

The following losses cannot be carried forward if the return of loss is not submitted in time :

1) Business loss (speculative or otherwise);
2) Capital loss; and
3) Loss from the activity of owing and maintaining race horses.

If loss return is not filed on or before due date then the losses incurred cannot be carried forward for set-off in coming year. However, loss from House Property (Sec.

32(2)). unabsorbed capital expenses on scientific research (Sec. 35) and unabsorbed capital expenses on family planning [Sec. 36(1)(ix)] can be carried forward and set-off even the return has not been filed.

Belated Return [Section 139(4)] :

Belated return is the return filed by the assessee after the due date; it is covered u/s 139(4) of the Income Tax Act. Thus, if an assessee submits his return of income after the due date of filing of return of income, then the rerun of income is called Belated return.

Presently, any person who has not furnished a return within the time allowed us 139(1) or u/s 142(1) may furnish the return at any time before the expiry of 1 year from the end of the relevant Assessment Year or before the completion of the assessment, whichever is earlier.

The Section 139(4) of the Act has been amended to provide that any person who has not furnished a return within the time allowed us 139(1) may furnish the return at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.

These amendments effective from 1st day of April. 2017 and accordingly apply in relation to assessment year 2017-2018 and subsequent years.

Revised Return (Section 139(5)) :

If any person furnished a return under section 139(1) or in pursuance of a notice issued under section 142(1), discovers any omission or any wrong statement therein. He may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before completion of assessment, whichever is earlier.

Section 139(5) of the Act has been amended to provide that a return furnished u/s 139(4) can also be revised. Thus, now belated return can be revised. These

amendments effective from 1st day of April, 2017 and accordingly apply in relation to assessment year 2017-2018 and subsequent years.

For example, if a return of income is filed by the assessee for the assessment year 2015-16 on 15.9.2015 and he afterwards discovers some mistake, he can file a

revised return at any time up to 31.3.2017 (one year from the end of the assessment year or before the completion of the assessment, whichever is earlier.

Defective or Incomplete Return of Income [Section 139(9)] :

If the return of income furnished by the assessee is defective according to Assessing Officer, it is intimated to the assessee and given an opportunity to rectify the defect within 15 days from the date of such intimation or within such further period as may be allowed by the

assessing officer on the request of the assessee. If this is not rectified by the assessee within the aforesaid period then the return shall be deemed invalid and further it shall be deemed that the assessee had failed to furnish the return. However, where the assessee rectifies the

defect after the expiry of the aforesaid period but before the assessment is made, the Assessing Officer may condone the delay and treat the return as valid return.

A return of income is regarded as defective unless the self assessment tax together with interest, if any, payable in accordance with section 140A has been paid on or before the date of furnishing of return. Section 139(9) of the Act has been amended to provide that a rerun which is otherwise valid would not be treated defective merely because self-assessment tax and interest payable in accordance with the provisions of section 140A, has not been paid on or before the date of furnishing of the return.

These amendments effective from 1st day of April, 2017 and accordingly apply in relation to assessment year 2017-2018 and subsequent years.

Return by whom to be Signed (Section 140) :

Assessees	Who Should Sign
1) Individual	Individual himself or any person authorized by him to sign holding power of attorney.
2) Hindu Undivided Family	Karta or any adult member of the family if Karta cannot sign.
3) Company	Managing Director or Director in case if Managing Director cannot sign.
4) Firm	Managing partner or any other partner in the absence of managing partner.
5) Local authority	Principal officer
6) Political party	Chief executive officer
7) Any other association	Principal Officer or member of the association .
8) Any other person	Particular person or any other person competent enough.

In section 140 of the Income-tax Act, w.e.f the 1st October, 2014 :

1) In the marginal heading, for the word "signed", the word "verified" shall be substituted.

2) For the words "signed and verified", wherever they occur, the word "verified" shall be substituted.

3) For the words "sign and verify", wherever they occur, the word "verify" shall be substituted.

4) In clause (i),

i) In sub-clause (4), for the word "sign", the word "verify" shall be substituted.
ii) In the proviso, for the word "signing”, the word "verifying" shall be substituted.

Section 140 of the Act relates to return by whom to be signed and verified. It is proposed to amend section 140 of the Act. so as to dispense with the condition of signing the income tax return and accordingly to omit the statutory requirement of signing such return. With this amendment, only the condition of verifying of the income-tax return will apply.

Self-Assessment (Section 140A) :

Self-assessment is the first step in the process of assessments. Self-assessment is simply a process where a person himself assesses his tax liability on the income earned during the particular previous year and submits Income Tax Return to the department. Every person, before furnishing return under Sections 139 (return of income), 142(1), 148 (issue of notice where income has escaped assessment) and 153A (Assessment in case of search or requisition) shall make self-assessment of his income and pay the tax, if due on the basis of such assessment.

The total tax payable is calculated on the total income of the assessee after considering the following amount :

1) The amount of tax already paid under any provision of this act.

2) Any tax deducted or collected at source.

3) Any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India.

4) Any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section.

5) Any tax credit claimed to be set off in accordance with the provisions of section 115JAA or section 115JD.

Such determined value of tax along with the interest payable under any provision of this Act for any delay in furnishing the return or any default or delay in payment of advance tax is paid before furnishing the return and the proof of payment of such tax is attached with the return. The work of income tax department became easy due to the system of Self Assessment.

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