Filing of returns is the self-reporting mechanism under S.139 by which every person discloses income, claims deductions, and computes tax liability. The return of income is the foundation of the assessment process; without it, the department must resort to best judgment assessment.
Legal Framework
| Provision | Content |
|---|---|
| S.139(1) | Mandatory filing: persons whose income exceeds basic exemption limit |
| S.139(3) | Return of loss: must file within due date to carry forward losses |
| S.139(4) | Belated return: filed after due date but before end of AY |
| S.139(5) | Revised return: correcting errors in original return |
| S.139(4A)-(4F) | Special entities: trusts, political parties, universities, institutions |
| S.140 | Verification of return (who signs) |
| S.234A | Interest for late filing |
| S.234F | Fee for late filing: Rs.5,000 (Rs.1,000 if income < Rs.5 lakh) |
Who Must File (S.139(1))
| Category | Condition |
|---|---|
| Individual/HUF/AOP/BOI | Total income exceeds basic exemption limit |
| Company | Every company, irrespective of profit or loss |
| Firm | Every firm, irrespective of income |
| Persons satisfying conditions | High-value transactions specified in 7th proviso to S.139(1) |
| Person holding foreign assets | Mandatory filing regardless of income |
Due Dates for Filing (S.139(1))
| Category | Due Date |
|---|---|
| Individual/HUF (not requiring audit) | 31 July of the AY |
| Companies and persons requiring audit (S.44AB) | 31 October of the AY |
| Persons required to file transfer pricing report (S.92E) | 30 November of the AY |
| Partner of a firm requiring audit | 31 October of the AY |
| Revised return (S.139(5)) | Before end of AY or before completion of assessment |
| Belated return (S.139(4)) | Before end of relevant AY (31 December of AY, post-2022 amendment) |
Types of Returns
| Type | Section | Feature |
|---|---|---|
| Original return | S.139(1) | Filed within due date |
| Belated return | S.139(4) | Filed after due date; losses cannot be carried forward |
| Revised return | S.139(5) | Corrects mistakes in original/belated return |
| Return of loss | S.139(3) | Filed within due date to claim carry forward |
| Updated return | S.139(8A) | Filed within 24 months from end of AY; additional tax 25%/50% |
| Defective return | S.139(9) | Return with errors/omissions; rectified within 15 days |
Why: The due date for loss returns (S.139(3)) is strictly enforced because allowing indefinite carry forward would prejudice revenue. The taxpayer who is diligent in filing on time gets the benefit; the one who delays loses the right.
Consequences of Late Filing
| Consequence | Provision | Detail |
|---|---|---|
| Late filing fee | S.234F | Rs.5,000 (Rs.1,000 if income ≤ Rs.5 lakh) |
| Interest on tax due | S.234A | 1% per month on unpaid tax from due date to filing date |
| Loss carry forward barred | S.80 | Losses (other than house property) cannot be carried forward |
| Certain deductions lost | S.80-IA, etc. | Some deductions available only if return filed on time |
| Best judgment assessment | S.144 | AO can make ex parte assessment |
ITR Forms
| Form | Applicable to |
|---|---|
| ITR-1 (Sahaj) | Resident individual: salary + one house property + other sources (total income ≤ Rs.50 lakh) |
| ITR-2 | Individuals/HUFs not having business/profession income |
| ITR-3 | Individuals/HUFs having business/profession income |
| ITR-4 (Sugam) | Presumptive income u/s 44AD/44ADA/44AE |
| ITR-5 | Firms, LLPs, AOPs, BOIs |
| ITR-6 | Companies (other than S.11 claiming exemption) |
| ITR-7 | Trusts, political parties, institutions (S.139(4A)-(4F)) |
Recall Check
- What is the due date for filing return for a salaried individual?
- What is the consequence of filing a belated return regarding loss carry forward?
- What is the updated return under S.139(8A)?
Key Cases
CIT v. Kulu Valley Transport (1970) CIT-v-Kulu-Valley-Transport-1970 Issue: Whether losses can be carried forward if the return was not filed within the prescribed due date. Rule: S.80 read with S.139(3): the right to carry forward losses is contingent upon filing the return of loss within the due date. Held: Filing of return within the prescribed time is a condition precedent for carry forward of losses. A belated return deprives the assessee of the right to carry forward losses (except house property loss and unabsorbed depreciation).
Goetze India v. CIT (2006) Goetze-India-v-CIT-2006 Issue: Whether a claim for deduction not made in the original return can be made before the AO during assessment proceedings. Rule: S.139(5) provides the mechanism for correcting returns; claims must be routed through a revised return. Held: A fresh claim for deduction cannot be made before the AO otherwise than by filing a revised return. However, the ITAT/appellate authorities are not bound by this restriction and can entertain new claims.
Distinctions
| Feature | Original Return (S.139(1)) | Belated Return (S.139(4)) | Revised Return (S.139(5)) |
|---|---|---|---|
| Time | Within due date | After due date, before end of AY | After original, before end of AY |
| Loss carry forward | Available | NOT available (except HP loss) | Available (if original was on time) |
| Fee/penalty | None | Rs.5,000 (S.234F) | None (correcting earlier) |
| Interest | None (if tax paid) | S.234A applicable | None additional |
| Can be revised? | Yes | Yes (from AY 2022-23) | Yes (further revision allowed) |
Flashcards
Q: What is the due date for filing return for an individual (non-audit case)? A: 31 July of the Assessment Year.
Q: What is the penalty for late filing under S.234F? A: Rs.5,000 (reduced to Rs.1,000 if total income does not exceed Rs.5 lakh).
Q: Can losses be carried forward if a belated return is filed? A: No (except loss from house property and unabsorbed depreciation). CIT v. Kulu Valley Transport.
Q: What is the updated return under S.139(8A)? A: A return filed within 24 months from end of AY to declare additional income; attracts additional tax at 25% (within 12 months) or 50% (12-24 months).
Q: What form should a salaried individual with income below Rs.50 lakh file? A: ITR-1 (Sahaj).
Q: Can a fresh deduction claim be made during assessment without filing revised return? A: No. Per Goetze India v. CIT, claims must be through revised return at AO level (appellate authorities can entertain fresh claims).
Exam Scenario
ABC Ltd (requiring audit) files its return for AY 2026-27 on 15 January 2027 (due date was 31 October 2026). The return shows a business loss of Rs.20 lakh and a loss from house property of Rs.3 lakh. Advise on the consequences.
Approach: The return is belated (S.139(4)) as it was filed after 31 October 2026. Consequences: (1) Fee u/s 234F: Rs.5,000. (2) Interest u/s 234A: 1% per month on tax due from 1 Nov to 15 Jan (2.5 months). (3) Business loss of Rs.20 lakh CANNOT be carried forward (S.80 requires filing within due date). (4) House property loss of Rs.3 lakh CAN be carried forward (S.71B permits carry forward regardless of due date). (5) Unabsorbed depreciation (if any) can still be carried forward (not governed by S.80).