CHAPTER 10

PROVISIONS FOR
FILING RETURN OF
INCOME AND
SELF ASSESSMENT
LEARNING OUTCOMES
After studying this chapter, you would be able to–
 comprehend as to what is a “return of income”;
 identify the persons who have to compulsorily file a return of income;
 identify and recall the due date for filing return of income for different
assessees;
 know the consequences of late filing of return;
 compute the interest payable for delayed filing of return of income;
 compute the fee payable for delayed filing of return of income;
 appreciate when a return of income can be revised and the time limit within
which a return has to be revised;
 know who are the persons required to apply for permanent account number;
 identify the transactions in respect of which quoting of PAN is mandatory;
 appreciate who are the specified classes of persons who can file return
through Tax Return Preparer;
 know who are the persons authorised to verify the return of income in the case
of different assessees in various circumstances;
 appreciate the requirement to pay self-assessment tax before filing return of
income;
 appreciate the order of adjustment of amount paid by the assessee against
self-assessment tax, fee and interest.

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 10.2 INCOME TAX LAW

Interest and
fee for default
Filing of Other
in furnishing
Return Provisions
return of
income
Permanent Account
Compulsory filing of
Return of Income Number [Section
[Section 139(1)] 139A]
Interest for default
in furnishing return Quoting of Aadhar
of income [Section Number [Section
Return of Loss 234A] 139AA]
[Section 139(3)]
Fee for non intimation
of Aadhar Number
[Section 234H]
Belated Return
[Section 139(4)] Submission of returns
through Tax Return
Preparers [Section
139B]
Revised Return
[Section 139(5)] Fee for default in Person authorised to
furnishing return of verify return of income
income [Section [Section 140]
234F]
Defective Return Self-Assessment
[Section 139(9)]
[Section 140A]

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 PROVISIONS FOR FILING RETURN OF INCOME AND SELF ASSESSMENT 10.3

1. RETURN OF INCOME
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 and the resultant tax by the assessee in
the prescribed format.

2. COMPULSORY FILING OF RETURN OF INCOME

[SECTION 139(1)]
(1) As per section 139(1), it is compulsory for companies and firms to file a
return of income or loss for every previous year on or before the due date in
the prescribed form.
(2) In case of a person other than a company or a firm, filing of return of
income on or before the due date is mandatory, if his total income or the
total income of any other person in respect of which he is assessable under
this Act during the previous year exceeds the basic exemption limit.
(3) Every person, being a resident other than not ordinarily resident in India within
the meaning of section 6(6), who is not required to furnish a return under
section 139(1), would be required to file a return of income or loss for the
previous year in the prescribed form and verified in the prescribed manner on
or before the due date, if such person, at any time during the previous year, -
(a) holds, as a beneficial owner or otherwise, any asset (including any
financial interest in any entity) located outside India or has a signing
authority in any account located outside India; or
(b) is a beneficiary of any asset (including any financial interest in any entity)
located outside India.
However, an individual being a beneficiary of any asset (including any
financial interest in any entity) located outside India would not be
required to file return of income under this clause, where, income, if
any, arising from such asset is includible in the income of the person

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 10.4 INCOME TAX LAW

referred to in (a) above in accordance with the provisions of the

Income-tax Act, 1961.

Meaning of “beneficial owner” and “beneficiary” in respect of an asset for

the purpose of section 139:

An individual who has provided, directly or indirectly,

Beneficial
consideration for the asset for the immediate or future benefit,
Owner
direct or indirect, of himself or any other person

An individual who derives benefit from the asset during the

Beneficiary previous year and the consideration for such asset has been
provided by any person, other than such beneficiary.

Requirement of filing of return of income as per the fourth and fifth

proviso to section 139(1)

A resident other than not ordinarily resident within the meaning of section 6(6)

who is not required to furnish a return of income u/s 139(1)

AND
who at any time during the P.Y.

A OR B

is a beneficiary of any asset

holds, as beneficial owner has a signing (including financial interest in
or otherwise, any asset OR authority in any any entity) located outside India
(including financial account located
interest in any entity) outside India
located outside India

However, where any income arising from such asset is includible in the hands of the person
specified in (A) in accordance with the provisions of the Act, an individual, being a beneficiary of
such asset, is not required to file return of income under the fourth proviso.

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 PROVISIONS FOR FILING RETURN OF INCOME AND SELF ASSESSMENT 10.5

(4) Further, every person, being an individual or a HUF or an AOP/BOI, whether

incorporated or not, or an artificial juridical person -
− 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
− without giving effect to the provisions of Chapter VI-A or section
54/54B/54D/54EC/54F 1
− 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 ` 2,50,000 for individuals/HUF/AOPs/BOIs and
artificial juridical persons, ` 3,00,000 for resident individuals of the age of 60
years but less than 80 years and ` 5,00,000 for resident individuals of the
age of 80 years or more at any time during the previous year. These
amounts denote the level of total income, which is arrived at after claiming
the admissible deductions under Chapter VI-A and exemption under section
54/54B/54D/54EC or 54F in respect of capital gain. 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 under Chapter VI-A
and exemption under section 54/54B/54D/54EC or 54F.
(5) Any person other than a company or a firm, who is not required to furnish a
return under section 139(1), is required to file income-tax return in the
prescribed form and manner on or before the due date if, during the
previous year, such person –
(a) has deposited an amount or aggregate of the amounts exceeding
` 1 crore in one or more current accounts maintained with a banking
company or a co-operative bank; or
(b) has incurred expenditure of an amount or aggregate of the amounts
exceeding ` 2 lakh for himself or any other person for travel to a
foreign country; or
(c) has incurred expenditure of an amount or aggregate of the amounts
exceeding ` 1 lakh towards consumption of electricity; or
(d) fulfils such other prescribed conditions.

1
or 54G or 54GA or 54GB. (These sections will be dealt with in detail at the Final level)

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 10.6 INCOME TAX LAW

(6) All such persons mentioned in (1) to (5) above should, on or before the due
date, furnish a return of his income or the income of such other person
during the previous year in the prescribed form and verified in the
prescribed manner and setting forth such other particulars as may be
prescribed.
Meaning of due date:
‘Due date’ means -
(i) 31st October of the assessment year, where the assessee, other than an
assessee referred to in (ii) below, is -
(a) a company,
(b) a person (other than a company) whose accounts are required to
be audited under the Income-tax Act, 1961 or any other law for
the time being in force; or
(c) a partner of a firm whose accounts are required to be audited
under the Income-tax Act, 1961 or any other law for the time
being in force 2.
(ii) 30th November of the assessment year, in the case of an assessee
including the partners of the firm2 being such assessee who is
required to furnish a report referred to in section 92E.
(iii) 31st July of the assessment year, in the case of any other assessee.

Note – Section 92E is not covered within the scope of syllabus of Intermediate Paper
4A: Income-tax Law. Section 139(1) provides a different due date, i.e., 30th November
of the assessment year, for assessees who have to file a transfer pricing report under
section 92E (i.e. assessees who have undertaken international transactions).
Therefore, reference has been made to this section, i.e. section 92E, for explaining this
provision in section 139(1).

ILLUSTRATION 1
Paras aged 55 years is a resident of India. During the F.Y. 2021-22, interest of
` 2,88,000 was credited to his Non-resident (External) Account with SBI. ` 30,000,
being interest on fixed deposit with SBI, was credited to his saving bank account
during this period. He also earned ` 3,000 as interest on this saving account. Is
Paras required to file return of income?

2
or the spouse of such partner if the provisions of section 5A applies to such spouse

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 PROVISIONS FOR FILING RETURN OF INCOME AND SELF ASSESSMENT 10.7

What will be your answer, if he has incurred ` 3 lakhs as travel expenditure of self
and spouse to US to stay with his married daughter for some time?
SOLUTION
An individual is required to furnish a return of income under section 139(1) if his
total income, before giving effect to the deductions under Chapter VI-A or
exemption under section or section 54/54B/54D/54EC or 54F, exceeds the
maximum amount not chargeable to tax i.e. ` 2,50,000 (for A.Y. 2022-23).
Computation of total income of Mr. Paras for A.Y. 2022-23

Particulars `
Income from other sources
Interest earned from Non-resident (External) Account ` 2,88,000
[Exempt under section 10(4)(ii), assuming that Mr. Paras has been NIL
permitted by RBI to maintain the aforesaid account]
Interest on fixed deposit with SBI 30,000
Interest on savings bank account 3,000
Gross Total Income 33,000
Less: Deduction u/s 80TTA (Interest on saving bank account) 3,000
Total Income 30,000

Since the total income of Mr. Paras for A.Y.2022-23, before giving effect, inter
alia, to the deductions under Chapter VI-A, is less than the basic exemption limit
of ` 2,50,000, he is not required to file return of income for A.Y.2022-23.

Note: In the above solution, interest of ` 2,88,000 earned from Non-resident

(External) account has been taken as exempt on the assumption that Mr. Paras, a
resident, has been permitted by RBI to maintain the aforesaid account. However,
in case he has not been so permitted, the said interest would be taxable. In such a
case, his total income, before giving effect, inter alia, to the deductions under
Chapter VI-A, would be ` 3,21,000 (` 30,000 + ` 2,88,000 + ` 3,000), which is
higher than the basic exemption limit of ` 2,50,000. Consequently, he would be
required to file return of income for A.Y.2022-23.

If he has incurred expenditure of ` 3 lakhs on foreign travel of self and spouse, he

has to mandatorily file his return of income on or before the due date under
section 139(1), even if his income is less than the basic exemption limit.

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 10.8 INCOME TAX LAW

3. INTEREST FOR DEFAULT IN FURNISHING

RETURN OF INCOME [SECTION 234A]
(1) Interest under section 234A is attracted for failure to file a return of income
on or before the due date under section 139(1) i.e., interest is payable where
an assessee furnishes the return of income after the due date or does not
furnish the return of income.
(2) Simple interest @1% per month or part of the month is payable for the period
commencing from the date immediately following the due date and ending on
the following dates -
Circumstances Ending on the following dates
Where the return is furnished after the date of furnishing of the
due date return
Where no return is furnished the date of completion of
assessment
(3) The interest has to be calculated on the amount of tax on total income as
determined under section 143(1) or on regular assessment as reduced by
the advance tax paid and any tax deducted or collected at source, any relief
of tax allowed under section 89 and any tax credit allowed to be set-off in
accordance with section 115JD.
(4) No interest under section 234A shall be charged on self-assessment tax paid
by the assessee on or before the due date of filing of return.
(5) The interest payable under section 234A shall be reduced by the interest, if
any, paid on self-assessment under section 140A towards interest
chargeable under section 234A.

Note –Section 143(1) provides that if any sum is found due on the basis of a return of
income after adjustment of advance tax, relief of tax allowed under section 89, tax
deducted at source, tax collection at source and self-assessment tax, an intimation
would be sent to the assessee and such intimation is deemed to be a notice of demand
issued under section 156. If any refund is due on the basis of the return, it shall be
granted to the assessee and an intimation to this effect would be sent to the assessee.
Where no tax or refund is due, the acknowledgement of the return is deemed to be an
intimation under section 156.

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 PROVISIONS FOR FILING RETURN OF INCOME AND SELF ASSESSMENT 10.9

4. FEE FOR DEFAULT IN FURNISHING RETURN

OF INCOME [SECTION 234F]
Where a person, who is required to furnish a return of income under section 139,
fails to do so within the prescribed time limit under section 139(1), he shall pay, by
way of fee, a sum of ` 5,000.
However, if the total income of the person does not exceed ` 5 lakhs, the fees
payable shall not exceed ` 1,000.

5. SPECIFIED CLASS OR CLASSES OF PERSONS

TO BE EXEMPTED FROM FILING RETURN OF
INCOME [SECTION 139(1C)]
(1) Every person who falls within the ambit of the conditions mentioned under
section 139 has to furnish a return of his income on or before the due date
specified under section 139(1).
(2) For reducing the compliance burden of small taxpayers, the Central
Government has been empowered to notify the class or classes of persons
who will be exempted from the requirement of filing of return of income,
subject to satisfying the prescribed conditions.
(3) Every notification issued under section 139(1C) shall, as soon as may be
after its issue, be laid before each House of Parliament while it is in session,
for a total period of thirty days. If both Houses agree in making any
modification in the notification, the notification will thereafter have effect
only in such modified form. If both Houses agree that the notification
should not be issued, the notification shall thereafter have no effect.

6. RETURN OF LOSS [SECTION 139(3)]

(1) This section requires the assessee to file a return of loss in the same manner
as in the case of return of income within the time allowed u/s 139(1).
(2) Section 80 requires mandatory filing of return of loss u/s 139(3) on or before
the due date specified u/s 139(1) for carry forward of the following losses -
(a) Business loss u/s 72(1)
(b) Speculation business loss u/s 73(2)

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 10.10 INCOME TAX LAW

(c) Loss from specified business u/s 73A(2)

(d) Loss under the head “Capital Gains” u/s 74(1)
(e) Loss from the activity of owning and maintaining race horses u/s 74A(3)
(3) Consequently, section 139(3) requires filing of return of loss mandatorily within the
time allowed u/s 139(1) for claiming carry forward of losses mentioned in (2) above.
(4) However, loss under the head “Income from house property” u/s 71B and
unabsorbed depreciation u/s 32 can be carried forward for set-off even
though return of loss has not been filed before the due date.
(5) A return of loss has to be filed by the assessee in his own interest and the non-
receipt of a notice from the Assessing Officer requiring him to file the return
cannot be a valid excuse under any circumstances for the non-filing of such return.

7. BELATED RETURN [SECTION 139(4)]

Any person who has not furnished a return within the time allowed to him under
section 139(1) may furnish the return for any previous year at any time -
(i) before three months prior to the end of the relevant assessment year
(i.e., 31.12.2022 for P.Y. 2021-22); or
(ii) before the completion of the assessment,
whichever is earlier.

8. REVISED RETURN [SECTION 139(5)]

If any person having furnished a return under section 139(1) or a belated return
under section 139(4), discovers any omission or any wrong statement therein, he
may furnish a revised return at any time –
(i) before three months prior to the end of the relevant assessment year
(i.e., 31.12.2022 for P.Y. 2021-22); or
(ii) before completion of assessment,
whichever is earlier.

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 PROVISIONS FOR FILING RETURN OF INCOME AND SELF ASSESSMENT 10.11

QUICK RECAP
Mandatory filing of return of income [Section 139(1)]
Person being Individual, HUF,
Resident other AOPs or BOIs and Person who during the P.Y. -
than RNOR, artificial juridical - has deposited > ` 1 crore in one
having any asset persons having total or more current accounts with bank
located outside income exceeding or a co-operative bank; or
Company India or signing basic exemption
- has incurred exp. of > ` 2 lakh for
and authority in any limit before giving
himself or any other person for
Firm account located effect to the
travel to a foreign country; or
outside India or provisions of
is beneficiary of Chapter VI-A or - has incurred exp of > ` 1 lakh
any asset exemption u/s towards electricity consumption; or
located outside 54/54B/54D/54EC - fulfils other prescribed conditions.
India or 54F

Due date of filing of return

31st October of A.Y 31st July of A.Y.
• Company • Any other
• Person other than company, whose accounts are required to be audited assessee
• A working partner of a firm, whose accounts are required to be audited
Loss Return under section 139(3)
To be filed on or before the due date under section 139(1) for carry forward of
Loss from Loss from Loss from the activity
Business Loss under the
speculation specified of owning and
loss u/s head "Capital
business u/s business u/s maintaning race
72(1) Gains" u/s 74(1)
73(2) 73A(2) horses u/s 74A(3)
Belated Return under section 139(4)
If return not filed within the time specified u/s 139(1), the assessee can file belated
return u/s 139(4), at any time before
Three months prior to the end of the
OR Completion of the Assessment
Relevant Assessment Year

Whichever is earlier
Revised Return under Section 139(5)
Return filed u/s 139(1) or u/s 139(4) can be revised u/s 139(5), if any omission or any
wrong statement is discovered by the assessee, at any time before
Three months prior to the end of the
OR Completion of the Assessment
Relevant Assessment Year

Whichever is earlier

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 10.12 INCOME TAX LAW

ILLUSTRATION 2
Explain with brief reasons whether the return of income can be revised under
section 139(5) of the Income-tax Act, 1961 in the following cases:
(i) Belated return filed under section 139(4).
(ii) Return already revised once under section 139(5).
(iii) Return of loss filed under section 139(3).
SOLUTION
Any person who has furnished a return under section 139(1) or 139(4) can file a revised
return at any time before three months prior to the end of the relevant assessment
year or before the completion of assessment, whichever is earlier, if he discovers any
omission or any wrong statement in the return filed earlier. Accordingly,
(i) A belated return filed under section 139(4) can be revised.
(ii) A return revised earlier can be revised again as the first revised return
replaces the original return. Therefore, if the assessee discovers any
omission or wrong statement in such a revised return, he can furnish a
second revised return within the prescribed time i.e. at any time before
three months prior to the end of the relevant assessment year or before the
completion of assessment, whichever is earlier. It implies that a return of
income can be revised more than once within the prescribed time.
(iii) A return of loss filed under section 139(3) is deemed to be return filed
under section 139(1), and therefore, can be revised under section 139(5).

9. PARTICULARS TO BE FURNISHED WITH THE

RETURN [SECTION 139(6)]
The prescribed form of the return shall, in certain specified cases, require the
assessee to furnish the particulars of -
(i) income exempt from tax;
(ii) assets of the prescribed nature and value, held by him as a beneficial owner
or otherwise or in which he is a beneficiary;
(iii) his bank account and credit card held by him;
(iv) expenditure exceeding the prescribed limits incurred by him under
prescribed heads; and
(v) such other outgoings as may be prescribed.

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 PROVISIONS FOR FILING RETURN OF INCOME AND SELF ASSESSMENT 10.13

10. PARTICULARS TO BE FURNISHED WITH

RETURN OF INCOME IN THE CASE OF AN
ASSESSEE ENGAGED IN BUSINESS OR
PROFESSION [SECTION 139(6A)]
The prescribed form of the return shall, in the case of an assessee engaged in any
business or profession, also require him to furnish -
(i) the report of any audit referred to in section 44AB.
(ii) the particulars of the location and style of the principal place where he
carries on the business or profession and all the branches thereof.
(iii) the names and addresses of his partners, if any, in such business or
profession.
(iv) if he is a member of an association or body of individuals,
(a) the names of the other members of the association or the body of
individuals; and
(b) the extent of the share of the assessee and the shares of all such
partners or members, as the case may be, in the profits of the business
or profession and any branches thereof.

11. DEFECTIVE RETURN [SECTION 139(9)]

(1) Under this section, the Assessing Officer has the power to call upon the
assessee to rectify a defective return.
(2) Where the Assessing Officer considers that the return of income furnished
by the assessee is defective, he may intimate the defect to the assessee and
give him an opportunity to rectify the defect within a period of 15 days from
the date of such intimation. The Assessing Officer has the discretion to
extend the time period beyond 15 days, on an application made by the
assessee.
(3) If the defect is not rectified within the period of 15 days or such further
extended period, then the return would be treated as an invalid return. The
consequential effect would be the same as if the assessee had failed to
furnish the return.

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(4) Where, however, the assessee rectifies the defect after the expiry of the
period of 15 days or the further extended period, but before assessment is
made, the Assessing Officer can condone the delay and treat the return as a
valid return.
(5) A return of income shall be regarded as defective unless all the following
conditions are fulfilled, namely:
(a) The annexures, statements and columns in the return of income
relating to computation of income chargeable under each head of
income, computations of gross total income and total income have
been duly filled in.
(b) The return of income is accompanied by the following, namely:
(i) a statement showing the computation of the tax payable on the
basis of the return.
(ii) the report of the audit obtained under section 44AB (If such
report has been furnished prior to furnishing the return of
income, a copy of such report and the proof of furnishing the
report should be attached).
(iii) the proof regarding the tax, if any, claimed to have been
deducted or collected at source and the advance tax and tax on
self-assessment, if any, claimed to have been paid. (However, the
return will not be regarded as defective if (a) a certificate for tax
deducted or collected was not furnished under section 203 or
section 206C to the person furnishing his return of income, (b)
such certificate is produced within a period of 2 years).
(iv) the proof of the amount of compulsory deposit, if any, claimed
to have been paid under the Compulsory Deposit Scheme
(Income-tax Payers) Act, 1974;
(c) Where regular books of account are maintained by an assessee, the
return of income is accompanied by the following -
(i) copies of manufacturing account, trading account, profit and
loss account or income and expenditure account, or any other
similar account and balance sheet;

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 PROVISIONS FOR FILING RETURN OF INCOME AND SELF ASSESSMENT 10.15

(ii) the personal accounts as detailed below -

(1) Proprietary business or The personal account of the

profession proprietor
(2) Firm, association of personal accounts of partners
persons or body of or members
individuals
(3) Partner or member of a partner’s personal account in
firm, association of firm member’s personal
persons or body of account in the association of
individuals persons or body of individuals
(d) Where the accounts of the assessee have been audited, the return
should be accompanied by copies of the audited profit and loss
account and balance sheet and the auditor’s report.
(e) Where the cost accounts of an assessee have been audited under
section 148 of Companies Act, 2013, the return should be
accompanied by such report.
(f) Where regular books of account are not maintained by the assessee,
the return should be accompanied by -
(i) a statement indicating -
(1) the amount of turnover or gross receipts,
(2) gross profit,
(3) expenses; and
(4) net profit
of the business or profession;
(ii) the basis on which such amounts mentioned in (i) above have
been computed,
(iii) the amounts of total sundry debtors, sundry creditors, stock-in-
trade and cash balance as at the end of the previous year.
However, the CBDT may, by notification, specify that any of the conditions
specified in (a) to (f) above would not apply to such class of assessees or apply
with such modifications as may be specified.

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 10.16 INCOME TAX LAW

Note – Many of these particulars are now required to be incorporated as part of

the relevant return form, for example, details of tax deducted at source, advance
tax paid, self-assessment tax paid, amount of turnover/gross receipts etc.

12. PERMANENT ACCOUNT NUMBER (PAN)

[SECTION 139A]
(1) Sub-section (1) requires the following persons mentioned in column (2),
who have not been allotted a permanent account number (PAN), to apply to
the Assessing Officer within the time specified in column (3) for the
allotment of a PAN –

(1) (2) (3)

Persons required to apply for PAN Time limit for making such
application (Rule 114)

(i) Every person, if his total income or the On or before 31st May of the
total income of any other person in assessment year for which
respect of which he is assessable under such income is assessable
the Act during any previous year
exceeds the maximum amount which is
not chargeable to income-tax

(ii) Every person carrying on any business Before the end of that
or profession whose total sales, financial year.
turnover or gross receipts are or is likely
to exceed ` 5 lakhs in any previous year

(iii) Every person being a resident, other On or before 31st May of the
than an individual, which enters into a immediately following
financial transaction of an amount financial year
aggregating to ` 2,50,000 or more in a
financial year

(iv) Every person who is a managing On or before 31st May of the

director, director, partner, trustee, immediately following
author, founder, karta, chief executive financial year in which the
officer, principal officer or office bearer person referred in (iii) enters

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 PROVISIONS FOR FILING RETURN OF INCOME AND SELF ASSESSMENT 10.17

of any person referred in (iii) above or into financial transaction

any person competent to act on behalf specified therein.
of such person referred in (iii) above
Further, every person who has not been allotted a PAN and intends to enter
into such transaction as prescribed by the CBDT is also required to apply for
PAN to the Assessing Officer.
(2) The Central Government is empowered to specify, by notification in the
Official Gazette, any class or classes of persons by whom tax is payable
under the Act or any tax or duty is payable under any other law for the time
being is force. Such persons are required to apply within such time as may
be mentioned in that notification to the Assessing Officer for the allotment
of a PAN [Sub-section (1A)].
(3) For the purpose of collecting any information which may be useful for or
relevant to the purposes of the Act, the Central Government may notify any
class or classes of persons, and such persons shall within the prescribed
time, apply to the Assessing Officer for allotment of a PAN
[Sub-section (1B)].
(4) The Assessing Officer, having regard to the nature of transactions as may be
prescribed, may also allot a PAN to any other person (whether any tax is
payable by him or not) in the manner and in accordance with the procedure
as may be prescribed [Sub-section (2)].
(5) Any person, other than the persons mentioned in (1) or (4) above, may
apply to the Assessing Officer for the allotment of a PAN and the Assessing
Officer shall allot a PAN to such person immediately.
(6) Such PAN comprises of 10 alphanumeric characters.
(7) Quoting of PAN is mandatory in all documents pertaining to the following
prescribed transactions:
(a) in all returns to, or correspondence with, any income-tax authority;
(b) in all challans for the payment of any sum due under the Act;
(c) in all documents pertaining to such transactions entered into by him,
as may be prescribed by the CBDT in the interests of revenue. In this
connection, CBDT has notified the following transactions vide Rule
114B, namely:

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 10.18 INCOME TAX LAW

S. Nature of transaction Value of transaction

No.
1. Sale or purchase of a motor vehicle or All such transactions
vehicle, as defined in the Motor
Vehicles Act, 1988 which requires
registration by a registering authority
under that Act, other than two wheeled
vehicles.
2. Opening an account [other than a time- All such transactions
deposit referred to at Sl. No.12 and a
Basic Savings Bank Deposit Account]
with a banking company or a co-
operative bank to which the Banking
Regulation Act, 1949 applies (including
any bank or banking institution referred
to in section 51 of that Act).
3. Making an application to any banking All such transactions
company or a co-operative bank to which
the Banking Regulation Act, 1949, applies
(including any bank or banking institution
referred to in section 51 of that Act) or to
any other company or institution, for issue
of a credit or debit card.
4. Opening of a demat account with a All such transactions
depository, participant, custodian of
securities or any other person
registered under section 12(1A) of the
SEBI Act, 1992.
5. Payment to a hotel or restaurant Payment in cash of an
against a bill or bills at any one time. amount exceeding
` 50,000.
6. Payment in connection with travel to Payment in cash of an
any foreign country or payment for amount exceeding
purchase of any foreign currency at any ` 50,000.
one time.

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 PROVISIONS FOR FILING RETURN OF INCOME AND SELF ASSESSMENT 10.19

7. Payment to a Mutual Fund for purchase Amount exceeding

of its units ` 50,000.
8. Payment to a company or an institution Amount exceeding
for acquiring debentures or bonds ` 50,000.
issued by it.
9. Payment to the Reserve Bank of India Amount exceeding
for acquiring bonds issued by it. ` 50,000.
10. Deposit with a banking company or a Cash deposits exceeding
co-operative bank to which the Banking ` 50,000 during any one
Regulation Act, 1949, applies (including day.
any bank or banking institution referred
to in section 51 of that Act); or
post office
11. Purchase of bank drafts or pay orders Payment in cash of an
or banker’s cheques from a banking amount exceeding
company or a co-operative bank to ` 50,000 during any one
which the Banking Regulation Act, 1949 day.
applies (including any bank or banking
institution referred to in section 51 of
that Act).
12. A time deposit with, - Amount exceeding
(i) a banking company or a co- ` 50,000 or aggregating to
operative bank to which the more than ` 5 lakh during
Banking Regulation Act, 1949 a financial year.
applies (including any bank or
banking institution referred to in
section 51 of that Act);
(ii) a Post Office;
(iii) a Nidhi referred to in section 406 of
the Companies Act, 2013; or
(iv) a non-banking financial company
which holds a certificate of
registration under section 45-IA of
the Reserve Bank of India Act, 1934,
to hold or accept deposit from public.

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 10.20 INCOME TAX LAW

13. Payment for one or more pre-paid Payment in cash or by way

payment instruments, as defined in the of a bank draft or pay
policy guidelines for issuance and order or banker’s cheque
operation of pre-paid payment of an amount aggregating
instruments issued by Reserve Bank of to more than ` 50,000 in a
India under the Payment and financial year.
Settlement Systems Act, 2007, to a
banking company or a co-operative
bank to which the Banking Regulation
Act, 1949, applies (including any bank
or banking institution referred to in
section 51 of that Act) or to any other
company or institution.
14. Payment as life insurance premium to Amount aggregating to
an insurer as defined in the Insurance more than ` 50,000 in a
Act, 1938. financial year.
15. A contract for sale or purchase of Amount exceeding ` 1 lakh
securities (other than shares) as defined per transaction
in section 2(h) of the Securities
Contracts (Regulation) Act, 1956.
16. Sale or purchase, by any person, of Amount exceeding ` 1 lakh
shares of a company not listed in a per transaction.
recognised stock exchange.
17. Sale or purchase of any immovable Amount exceeding ` 10 lakh
property. or valued by stamp valuation
authority referred to in
section 50C at an amount
exceeding ` 10 lakh
18. Sale or purchase, by any person, of Amount exceeding ` 2 lakh
goods or services of any nature other per transaction:
than those specified at Sl. No. 1 to 17 of
this Table, if any.

Minor to quote PAN of parent or guardian

Where a person, entering into any transaction referred to in this rule, is a
minor and who does not have any income chargeable to income-tax, he

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 PROVISIONS FOR FILING RETURN OF INCOME AND SELF ASSESSMENT 10.21

shall quote the PAN of his father or mother or guardian, as the case may be,
in the document pertaining to the said transaction.
Declaration by a person not having PAN
Further, any person who does not have a PAN and who enters into any
transaction specified in this rule, shall make a declaration in Form No.60
giving therein the particulars of such transaction either in paper form or
electronically under the electronic verification code in accordance with the
procedures, data structures, and standards specified by the Principal Director
General of Income-tax (Systems) or Director General of Income-tax (Systems).
Non-applicability of Rule 114B
The provisions of this rule shall not apply to the following class or classes of
persons, namely:-
(i) the Central Government, the State Governments and the Consular
Offices;
(ii) the non-residents referred to in section 2(30) in respect of the
transactions other than a transaction referred to at Sl. No. 1 or 2 or 4
or 7 or 8 or 10 or 12 or 14 or 15 or 16 or 17 of the Table.
Meaning of certain phrases:

Phrase Inclusion
(1) Payment in Payment towards fare, or to a travel agent or a tour
connection operator, or to an authorized person as defined in
with travel section 2(c) of the Foreign Exchange Management
Act, 1999
(2) Travel agent or A person who makes arrangements for air, surface
tour operator or maritime travel or provides services relating to
accommodation, tours, entertainment, passport,
visa, foreign exchange, travel related insurance or
other travel related services either severally or in
package
(3) Time deposit Any deposit which is repayable on the expiry of a
fixed period.

(8) If there is a change in the address or in the name and nature of the business
of a person, on the basis of which PAN was allotted to him, he should
intimate such change to the Assessing Officer.

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 10.22 INCOME TAX LAW

(9) Every person who receives any document relating to any transaction cited
above shall ensure that the PAN or the Aadhar number is duly quoted in the
document.
(10) Intimation of PAN to person deducting or collecting tax at source
Every person who receives any amount from which tax has been deducted
at source shall intimate his PAN to the person responsible for deducting
such tax [Sub-section (5A)].
Similarly, every buyer or licensee or lessee referred to in section 206C shall
intimate his PAN to the person responsible for collecting such tax [Sub-
section (5C)]
(11) Quoting of PAN in certain documents
Where any amount has been paid after deducting tax at source, the person
deducting tax shall quote the PAN of the person to whom the amount was
paid in the following documents:
(i) in the statement furnished under section 192(2C) giving particulars of
perquisites or profits in lieu of salary provided to any employee;
(ii) in all certificates for tax deducted issued to the person to whom
payment is made;
(iii) in all returns prepared and delivered or caused to be delivered to any
income-tax authority in accordance with the provisions of section 206;
(iv) in all statements prepared and delivered or caused to be delivered in
accordance with the provisions of section 200(3) [Sub-section (5B)].
Also, every person collecting tax in accordance with the provisions
of section 206C shall quote PAN of every buyer or licensee or lessee in the
following documents:
(i) in all certificates issued for tax collected in accordance with the
provisions of section 206C(5);
(ii) in all returns prepared and delivered or caused to be delivered to any
income-tax authority in accordance with the provisions of section
206C(5A)/(5B);
(iv) in all statements prepared and delivered or caused to be delivered in
accordance with the provisions of section 206C(3) [Sub-section (5D)].

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 PROVISIONS FOR FILING RETURN OF INCOME AND SELF ASSESSMENT 10.23

(12) Requirement to intimate PAN and quote PAN not to apply to certain
persons
The above sub-sections (5A) and (5B) shall not apply to a person who –
(i) does not have taxable income or
(ii) who is not required to obtain PAN
if such person furnishes a declaration under section 197A in the prescribed
form and manner that the tax on his estimated total income for that
previous year will be nil.
(13) Inter-changeability of PAN with the Aadhaar number
Every person who is required to furnish or intimate or quote his PAN may
furnish or intimate or quote his Aadhar Number in lieu of the PAN, if he
- has not been allotted a PAN but possesses the Aadhar number
- has been allotted a PAN and has intimated his Aadhar number to
prescribed authority in accordance with the requirement contained in
section 139AA(2).
PAN would be allotted in prescribed manner to a person who has not been
allotted a PAN but possesses Aadhar number.
Accordingly, the CBDT has, vide Notification No. 59/2019, dated 30.8.2019,
provide that any person, who has not been allotted a PAN but possesses the
Aadhaar number and has furnished or intimated or quoted his Aadhaar
number in lieu of the PAN, shall be deemed to have applied for allotment of
PAN and he shall not be required to apply or submit any documents.
Further, any person, who has not been allotted a PAN but possesses the
Aadhaar number may apply for allotment of the PAN under section
139A(1)/(1A)/(3) by intimating his Aadhaar number and he shall not be
required to apply or submit any documents.
(14) Quoting and authentication of PAN or Aadhar number
(a) Every person entering into such prescribed transactions is required to
quote his PAN or Aadhar number, as the case may be, in the
documents pertaining to such transactions and also authenticate such
PAN or Aadhar number in the prescribed manner.
(b) Every person receiving such document relating to transactions
referred to in (a)has to ensure that PAN or Aadhar number has been

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 10.24 INCOME TAX LAW

duly quoted in such document and also ensure that such PAN or
Aadhar number is so authenticated.
(15) Power to make rules
The CBDT is empowered to make rules with regard to the following:
(a) the form and manner in which an application for PAN may be made
and the particulars to be given therein;
(b) the categories of transactions in relation to which PAN or the Aadhar
number, as the case may be, is required to be quoted on the related
documents;
(c) the categories of documents pertaining to business or profession in
which PAN or the Aadhar number, as the case may be, shall be quoted
by every person;
(d) the class or classes of persons to whom the provisions of this section
shall not apply;
(e) the form and manner in which a person who has not been allotted a
PAN shall make a declaration;
(f) the manner in which PAN or the Aadhar number, as the case may be,
shall be quoted for transactions cited in (b) above;
(g) the time and manner in which such transactions cited in (b) above
shall be intimated to the prescribed authority.
(16) Meaning of certain terms

Term Meaning
(i) Aadhar An identification number issued to an individual
number by the Authority on receipt of the demographic
information and biometric information after
verifying the information by the authority. It
includes any alternative virtual identity
generated by the Authority in the prescribed
manner.
(ii) Authentication The process by which the PAN or Aadhar
number along with demographic information or
biometric information of an individual is
submitted to the income-tax authority or such

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 PROVISIONS FOR FILING RETURN OF INCOME AND SELF ASSESSMENT 10.25

other prescribed authority or agency for its

verification and such authority or agency verifies
the correctness, or the lack thereof, on the basis
of information available with it.

13. QUOTING OF AADHAR NUMBER

[SECTION 139AA]
(1) Mandatory quoting of Aadhar Number
Every person who is eligible to obtain Aadhar Number is required to
mandatorily quote Aadhar Number:
(a) in the application form for allotment of Permanent Account Number
(PAN)
(b) in the return of income
Quoting of Aadhaar Number mandatory in returns filed on or after
1.4.2019 [Circular No. 6/2019 dated 31.03.2019]
As per section 139AA(1)(ii), with effect from 01.07.2017, every person who is
eligible to obtain Aadhaar number has to quote Aadhaar number in the
return of income.
The Apex Court in a series of judgments has upheld the validity of section
139AA. Consequently, with effect from 01.04.2019, the CBDT has clarified
that it is mandatory to quote Aadhaar number while filing the return of
income unless specifically exempted as per any notification issued under
section 139AA(3) [detailed in point no. (5) in the next page]. Thus, returns
being filed either electronically or manually on or after 1.4.2019 cannot be
filed without quoting the Aadhaar number.
(2) Mandatory quoting of Enrolment Id, where person does not have
Aadhar Number
If a person does not have Aadhar Number, he is required to quote
Enrolment ID of Aadhar application form issued to him at the time of
enrolment in the application form for allotment of Permanent Account
Number (PAN) or in the return of income furnished by him.
Enrolment ID means a 28 digit Enrolment Identification Number issued to a
resident at the time of enrolment

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 10.26 INCOME TAX LAW

(3) Intimation of Aadhar Number to prescribed Authority

Every person who has been allotted Permanent Account Number (PAN) as
on 1st July, 2017, and who is eligible to obtain Aadhar Number, shall
intimate his Aadhar Number to prescribed authority on or before 30th June,
2021.
Notwithstanding the last date of intimating/linking of Aadhaar Number with
PAN being 30.6.2021, it is clarified that w.e.f. 01.04.2019, it is mandatory to
quote and link Aadhaar number while filing the return of income, either
manually or electronically, unless specifically exempted in cases detailed in
point (5) below.
(4) Consequences of failure to intimate Aadhar Number
If a person fails to intimate the Aadhar Number, the permanent account
Number (PAN) allotted to such person shall be made inoperative after the
date so notified in the prescribed manner.
Accordingly, Rule 114AAA specifies the manner of making permanent
account number inoperative.

Sub- Provision
Rule
(1) If a person, who has been allotted PAN as on 1st July, 2017 and
is required to intimate his Aadhaar number under section
139AA(2), has failed to intimate the same on or before 30th
June, 2021, the PAN of such person would become inoperative
immediately after the said date (i.e., after 30th June, 2021) for
the purposes of furnishing, intimating or quoting under the
Income-tax Act, 1961.
(2) Accordingly, where a person, whose PAN has become
inoperative, is required to furnish, intimate or quote his PAN
under the Act, it shall be deemed that he has not furnished,
intimated or quoted the PAN, as the case may be, in accordance
with the provisions of the Act. Consequently, he would be liable
for all the consequences under the Act for not furnishing,
intimating or quoting the PAN.
(3) Where such person who has not intimated his Aadhaar number
on or before 30th June, 2021, intimates his Aadhar number
under section 139AA(2) after 30th June, 2021, his PAN would

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 PROVISIONS FOR FILING RETURN OF INCOME AND SELF ASSESSMENT 10.27

become operative from the date of intimation of Aadhaar

number for the purposes of furnishing, intimating or quoting
under the Act. Accordingly, the consequences in sub-rule (2)
would not be applicable from such date of intimation.
(4) The Principal Director General of Income-tax (Systems) or
Director General of Income-tax (Systems) has to specify the
formats and standards along with the procedure for verifying
the operational status of PAN under sub-rules (1) and (2).

(5) Provision not to apply to certain persons or class of persons

The provisions of section 139AA relating to quoting of Aadhar Number
would, however, not apply to such person or class or classes of persons or
any State or part of any State as may be notified by the Central
Government.
Accordingly, the Central Government has, vide Notification No. 37/2017
dated 11.05.2017 effective from 01.07.2017, notified that the provisions of
section 139AA relating to quoting of Aadhar Number would not apply to an
individual who does not possess the Aadhar number or Enrolment ID and is:
(i) residing in Assam, Jammu & Kashmir and Meghalaya;
(ii) a non-resident as per Income-tax Act, 1961;
(iii) of the age of 80 years or more at any time during the previous year;
(iv) not a citizen of India

14. FEE FOR DEFAULT RELATING TO INTIMATION

OF AADHAR NUMBER [SECTION 234H]
Where a person, who is required to intimate his Aadhar Number under section
139AA(2), fails to do so on or before the notified date i.e., 30th June, 2021, he shall
be liable to pay such fee, as may be prescribed, at the time of making intimation
under section 139AA(2) after 30th June, 2021.
However, such fee shall not exceed ` 1,000.

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15. SCHEME FOR SUBMISSION OF RETURNS

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 means any 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) an accountant
(iv) an employee of the ‘specified class or classes of persons’.
who has been authorized to act as a Tax Return Preparer under the Scheme.
(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 of 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,
(ii) the code of conduct for the Tax Return Preparers,
(iii) the duties and obligations of the Tax Return Preparers,

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 PROVISIONS FOR FILING RETURN OF INCOME AND SELF ASSESSMENT 10.29

(iv) the circumstances under which the authorisation given to a Tax Return
Preparer may be withdrawn, and
(v) any other relevant matter as may be specified by the Scheme.
(6) 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.

Particulars Contents
Applicability of The scheme is applicable to all eligible persons.
the scheme
Eligible person Any person being an individual or a Hindu undivided
family.
Tax Return Any individual who has been issued a "Tax Return
Preparer Preparer Certificate" and a "unique identification
number" under this Scheme by the Partner
Organisation to carry on the profession of preparing
the returns of income in accordance with the Scheme.
However, the following person are not entitled to act
as Tax Return Preparer:
(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) an accountant.
Educational An individual, who holds a bachelor degree from a
qualification recognised Indian University or institution, or has
for Tax Return passed the intermediate level examination conducted
Preparers by the Institute of Chartered Accountants of India or
the Institute of Company Secretaries of India or the
Institute of Cost Accountants of India, shall be eligible
to act as Tax Return Preparer.

Preparation of An eligible person may, at his option, furnish his

and furnishing return of income under section 139 for any
the Return of assessment year after getting it prepared through a
Income by the Tax Return Preparer:

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 10.30 INCOME TAX LAW

Tax Return However, the following eligible person (an individual

Preparer or a HUF) cannot furnish a return of income for an
assessment year through a Tax Return Preparer:
(i) who is carrying out business or profession during
the previous year and accounts of the business or
profession for that previous year are required to
be audited under section 44AB or under any other
law for the time being in force; or
(ii) who is not a resident in India during the previous year.
An eligible person cannot furnish a revised return of
income for any assessment year through a Tax Return
Preparer unless he has furnished the original return of
income for that assessment year through such or any
other Tax Return Preparer.

Note - It may be noted that as per section 139B(3), an employee of the

“specified class or classes of persons” is not authorized 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 (since they are not falling in the category of specified class
or classes of persons), are eligible to act as Tax Return Preparers.

ILLUSTRATION 3
Mrs. Hetal, an individual engaged in the business of Beauty Parlour, has got her
books of account for the financial year ended on 31st March, 2022 audited under
section 44AB. Her total income for the assessment year 2022-23 is ` 6,35,000. She
wants to furnish her return of income for assessment year 2022-23 through a tax
return preparer. Can she do so?
SOLUTION
Section 139B provides a scheme for submission of return of income for any
assessment year through a Tax Return Preparer. However, it is not applicable to
persons whose books of account are required to be audited under section 44AB.
Therefore, Mrs. Hetal cannot furnish her return of income for A.Y.2022-23 through
a Tax Return Preparer.

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16. POWER OF CBDT TO DISPENSE WITH

FURNISHING DOCUMENTS ETC. WITH THE
RETURN AND FILING OF RETURN IN
ELECTRONIC FORM [SECTIONS 139C & 139D]
(i) Section 139C provides that the CBDT may make rules providing for a class
or classes of persons who may not be required to furnish documents,
statements, receipts, certificate, reports of audit or any other documents,
which are otherwise required to be furnished along with the return under
any other provisions of this Act.
(ii) However, on demand, the said documents, statements, receipts, certificate,
reports of audit or any other documents have to be produced before the
Assessing Officer.
(iii) Section 139D empowers the CBDT to make rules providing for –
(a) the class or classes of persons who shall be required to furnish the
return of income in electronic form;
(b) the form and the manner in which the return of income in electronic
form may be furnished;
(c) the documents, statements, receipts, certificates or audited reports
which may not be furnished along with the return of income in
electronic form but have to be produced before the Assessing Officer
on demand;
(d) the computer resource or the electronic record to which the return of
income in electronic form may be transmitted.

17. PERSONS AUTHORISED TO VERIFY RETURN

17
OF INCOME [SECTION 140]
This section specifies the persons who are authorized to verify the return of
income under section 139.
Assessee Circumstance Authorised Persons
1. Individual (i) In circumstances not - the individual himself
covered under (ii), (iii)
& (iv) below

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 10.32 INCOME TAX LAW

(ii) where he is absent - the individual himself;

from India or
- any person duly
authorised by him in
this behalf holding a
valid power of
attorney from the
individual (Such power
of attorney should be
attached to the return
of income)
(iii) where he is mentally - his guardian; or
incapacitated from - any other person
attending to his affairs competent to act on
his behalf
(iv) where, for any other - any person duly
reason, it is not authorised by him in
possible for the indi- this behalf holding a
vidual to verify the valid power of attorney
return from the individual
(Such power of
attorney should be
attached to the return
of income)
2. Hindu (i) in circumstances not - the karta
Undivided covered under (ii) and
Family (iii) below
(ii) where the karta is - any other adult
absent from India member of the HUF
(iii) where the karta is - any other adult
mentally incapacitated member of the HUF
from attending to his
affairs
3. Company (i) in circumstances not - the managing director
covered under (ii) to of the company
(vi) below

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(ii)
(a) where for any
unavoidable reason any director of the
such managing company or
director is not able to any other person as
verify the return; or may be prescribed for
(b) where there is no this purpose
managing director
(iii) where the company is a person who holds a valid
not resident in India power of attorney from such
company to do so (such
power of attorney should be
attached to the return).
(iv)
(a) Where the company is - Liquidator
being wound up
(whether under the
orders of a court or
otherwise); or - Liquidator
(b) where any person has
been appointed as the
receiver of any assets
of the company
(v) Where the - the principal officer of
management of the the company
company has been
taken over by the
Central Government or
any State Government
under any law
(vi) Where an application for - insolvency
corporate insolvency professional
resolution process has appointed by such
been admitted by the Adjudicating Authority
Adjudicating Authority
under the Insolvency
and Bankruptcy Code,
2016.

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 10.34 INCOME TAX LAW

4. Firm (i) in circumstances not - the managing partner

covered under (ii) below of the firm
(ii)
(a) where for any - any partner of the firm,
unavoidable reason not being a minor
such managing partner
is not able to verify the - any partner of the firm,
return; or not being a minor
(b) where there is no
managing partner.
5. LLP (i) in circumstances not - Designated partner
covered under (ii) below
(ii)
(a) where for any
unavoidable reason any partner of the LLP
such designated or any other person as
partner is not able to may be prescribed for
verify the return; or this purpose
(b) where there is no
designated partner.
6. Local - - the principal officer
authority
7. Political - - the chief executive officer
party 3 of such party (whether he
is known as secretary or
by any other designation)
8. Any other - - any member of the
association association or the
principal officer of such
association
9. Any other - - that person or some
person other person competent
to act on his behalf.

3 Referred to in section 139(4B), which will be dealt with at the Final level.

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18. SELF-ASSESSMENT [SECTION 140A]

(1) Payment of tax, interest and fee before furnishing return of income
Where any tax is payable on the basis of any return required to be furnished
under, inter alia, section 139, after taking into account -
(i) the amount of tax, already paid, under any provision of the Income-
tax Act, 1961
(ii) the tax deducted or collected at source
(iii) any relief of tax claimed under section 89
(iv) any tax credit claimed to set-off in accordance with the provisions of
section 115JD; and
(v) any tax or interest payable as per the provisions of section 191(2).
the assessee shall be liable to pay such tax together with interest and fee
payable under any provision of this Act for any delay in furnishing the
return or any default or delay in payment of advance tax before furnishing
the return. The return shall be accompanied by the proof of payment of
such tax, interest and fee.
(2) Order of adjustment of amount paid by the assessee
Where the amount paid by the assessee under section 140A(1) falls short of
the aggregate of the tax, interest and fee as aforesaid, the amount so paid
shall first be adjusted towards the fee payable and thereafter towards
interest and the balance, if any, shall be adjusted towards the tax payable.
(3) Interest under section 234A
For the above purpose, interest payable under section 234A shall be
computed on the amount of tax on the total income as declared in the
return, as reduced by the amount of-
(i) advance tax paid, if any;
(ii) any tax deducted or collected at source;
(iii) any relief of tax claimed under section 89
(iv) any tax credit claimed to be set-off in accordance with the provisions
of section 115JD.

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 10.36 INCOME TAX LAW

(4) Interest under section 234B

Interest payable under section 234B shall be computed on the assessed tax or
on the amount by which the advance tax paid falls short of the assessed tax.
For this purpose “assessed tax” means the tax on total income declared in
the return as reduced by the amount of
- tax deducted or collected at source on any income which forms part of the
total income;
- any relief of tax claimed under section 89
- any tax credit claimed to be set-off in accordance with the provisions
of section 115JD.
(5) Consequence of failure to pay tax, interest or fee
If any assessee fails to pay the whole or any part of such of tax or interest or
fee, he shall be deemed to be an assessee in default in respect of such tax
or interest or fee remaining unpaid and all the provisions of this Act shall
apply accordingly.
QUICK RECAP
Mandatory Quoting of PAN under section 139A
In all returns to, and In all challans for the In all documents
correspondence with, payment of sum due pertaining to such
any, income tax under the Act transactions entered
authority into by him as
prescribed by CBDT
in the interests of
revenue

Quoting of Aadhar Number under section 139AA

To be quoted on or If he does not have Aadhar Number to be
after 1/7/2017 in the Aadhar Number, the intimated to
application for enrolment ID of prescribed authority
allotment of PAN and Aadhar application by 30.6.2021
in Return of Income form issued to him at
the time of
enrolmenty shall be
quoted

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 PROVISIONS FOR FILING RETURN OF INCOME AND SELF ASSESSMENT 10.37

Self-assessment under section 140A

Tax Payable = Tax Return to be Order of adjustment

on Total Income – accompained by of amount paid
Advances tax paid – proof of payment of Fee, Interest and tax
TDS/TCS – relief u/s Taxpayable + Interest
89 – tax credit u/s 234A, 234B and
claimed to be set-off 234C + Fee payable
in accordance with u/s 234F
section 115JD – tax
and inerest payable
under section 191(2)

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 10.38 INCOME TAX LAW

LET US RECAPITULATE
Section Particulars
139(1) Assessees required to file return of income compulsorily
(i) Companies and firms (whether having profit or loss or nil
income);
(ii) a person, being a resident other than not ordinarily resident,
having any asset (including any financial interest in any entity)
located outside India held as a beneficial owner or beneficiary
or who has a signing authority in any account located outside
India, whether or not having income chargeable to tax;
(iii) Individuals, HUF, AOPs or BOIs and artificial juridical persons
whose total income before giving effect to the provisions of
Chapter VI-A and sections 54, 54B, 54D, 54EC or 54F exceeds
the basic exemption limit.
(iv) Any person who during the previous year –
- has deposited more than ` 1 crore in one or more
current accounts maintained with a banking company or
a co-operative bank; or
- has incurred expenditure of more than ` 2 lakh for
himself or any other person for travel to a foreign
country; or
- has incurred expenditure of more than ` 1 lakh towards
consumption of electricity; or
- fulfils such other conditions as may be prescribed
Due date of filing return of income
31st October of the assessment year, in case the assessee is:
(i) a company;
(ii) a person (other than company) whose accounts are required to be
audited; or
(iii) a partner of a firm whose accounts are required to be audited.
31 July of the assessment year, in case of any other assessee (other
st

than assessees including the partners of the firm being such assessees
who are required to furnish report under section 92E, for whom the
due date is 30th November of the assessment year).

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 PROVISIONS FOR FILING RETURN OF INCOME AND SELF ASSESSMENT 10.39

234A Interest for default in furnishing return of income

Interest under section 234A is payable where an assessee furnishes
the return of income after the due date or does not furnish the
return of income.
Assessee shall be liable to pay simple interest @1% per month or
part of the month for the period commencing from the date
immediately following the due date and ending on the following
dates –
Circumstances Ending on the following dates
Where the return is the date of furnishing of the return
furnished after due date
Where no return is the date of completion of
furnished assessment
However, where the assessee has paid taxes in full on or before the
due date, interest under section 234A is not leviable.
234F Fee for default in furnishing return of income
Where a person who is required to furnish a return of income under
section 139, fails to do so within the prescribed time limit under
section 139(1), he shall pay, by way of fee, a sum of ` 5,000.
However, if the total income of the person does not exceed ` 5
lakhs, the fees payable shall not exceed ` 1,000
139(3) Return of loss
An assessee can carry forward or set off his/its losses provided he/it
has filed his/its return under section 139(3), within the due date
specified under section 139(1).
Exceptions
Loss from house property and unabsorbed depreciation can be
carried forward for set-off even though return has not been filed
before the due date.
139(4) Belated Return
A return of income for any previous year, which has not been
furnished within the time allowed u/s 139(1), may be furnished at
any time before the:
(i) three months prior to the end of the relevant assessment year
(i.e., 31.12.2022 for P.Y. 2021-22); or

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 10.40 INCOME TAX LAW

(ii) completion of the assessment,

whichever is earlier.
139(5) Revised Return
If any omission or any wrong statement is discovered in a return
furnished u/s 139(1) or belated return u/s 139(4), a revised return
may be furnished by the assessee at any time before the:
(i) three months prior to the end of the relevant assessment year
(i.e., 31.12.2022 for P.Y. 2021-22); or
(ii) completion of assessment,
whichever is earlier.
Thus, belated return can also be revised.
139A Permanent Account Number (PAN)
Quoting of PAN is mandatory in all documents pertaining to the
following prescribed transactions :
(a) in all returns to, or correspondence with, any income-tax
authority;
(b) in all challans for the payment of any sum due under the Act;
(c) in all documents pertaining to such transactions entered into
by him, as may be prescribed by the CBDT in the interests of
revenue. For example, sale or purchase of a motor vehicle,
payment in cash of an amount exceeding ` 50,000 to a hotel
against a bill or bills at any one time, etc.
Inter-changeability of PAN with the Aadhaar number
Every person who is required to furnish or intimate or quote his PAN
may furnish or intimate or quote his Aadhar Number in lieu of the
PAN w.e.f. 1.9.2019 if he
- has not been allotted a PAN but possesses the Aadhar number
- has been allotted a PAN and has intimated his Aadhar number
to prescribed authority in accordance with the requirement
contained in section 139AA(2).
139AA Quoting of Aadhar Number
To be quoted by every person on or after 1.7.2017 in the application
for allotment of PAN and in Return of Income
If a person does not have Aadhar Number, the Enrolment ID of
Aadhar application form issued to him at the time of enrolment shall
be quoted.

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 PROVISIONS FOR FILING RETURN OF INCOME AND SELF ASSESSMENT 10.41

Every person who has been allotted PAN as on 1.7.2017 and who is
eligible to obtain Aadhar Number, shall intimate his Aadhar Number
to the prescribed authority on or before 30.06.2021.
234H Where a person, who is required to intimate his Aadhar Number
under section 139AA(2), fails to do so on or before the notified date
i.e., 30th June, 2021, he shall be liable to pay such fee, as may be
prescribed, at the time of making intimation under section 139AA(2)
after 30th June, 2021.
However, such fee shall not exceed ` 1,000.

140A Self-Assessment
Where any tax is payable on the basis of any return required to be
furnished under section 139, after taking into account –
(i) the amount of tax, already paid,
(ii) the tax deducted or collected at source
(iii) any relief of tax claimed under section 89
(iv) any tax credit claimed to be set-off in accordance with the
provisions of section 115JD; and
(v) any tax and interest payable as per the provisions of section
191(2)
the assessee shall be liable to pay such tax together with interest
and fee payable under any provision of this Act for any delay in
furnishing the return or any default or delay in payment of advance
tax before furnishing the return.
Where the amount paid by the assessee under section 140A(1) falls
short of the aggregate of the tax, interest and fee as aforesaid, the
amount so paid shall first be adjusted towards the fee payable and
thereafter, towards interest and the balance shall be adjusted
towards the tax payable.

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 10.42 INCOME TAX LAW

TEST YOUR KNOWLEDGE

Question 1
State with reasons whether you agree or disagree with the following statements:
(a) Return of income of Limited Liability Partnership (LLP) could be verified by
any partner.
(b) Time limit for filing return under section 139(1) in the case of Mr. A having
total turnover of ` 160 lakhs (` 100 lakhs received in cash) for the year ended
31.03.2022, whether or not opting to offer presumptive income under section
44AD, is 31st October, 2022.
Answer
(a) Disagree
The return of income of LLP should be verified by a designated partner.
Any other partner can verify the Return of Income of LLP only in the
following cases:-
(i) where for any unavoidable reason such designated partner is not able
to verify the return, or,
(ii) where there is no designated partner.
(b) Disagree
In case Mr. A opts to offer his income as per the presumptive taxation
provisions of section 44AD, then, the due date under section 139(1) for
filing of return of income for the year ended 31.03.2022, shall be 31st July,
2022.
In case, Mr. A does not opt for presumptive taxation provisions under
section 44AD, he has to get his accounts audited under section 44AB, since
his turnover exceeds ` 1 crore, in which case, the due date for filing return
would be 31st October, 2022.
Question 2
Mr. Vineet submits his return of income on 12-09-2022 for A.Y 2022-23 consisting
of income under the head “Salaries”, “Income from house property” and bank
interest. On 21-12-2022, he realized that he had not claimed deduction under
section 80TTA in respect of his interest income on the Savings Bank Account. He
wants to revise his return of income. Can he do so? Examine. Would your answer be
different if he discovered this omission on 21-03-2023?

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 PROVISIONS FOR FILING RETURN OF INCOME AND SELF ASSESSMENT 10.43

Answer
Since Mr. Vineet has income only under the heads “Salaries”, “Income from house
property” and “Income from other sources”, he does not fall under the category
of a person whose accounts are required to be audited under the Income-tax Act,
1961 or any other law in force. Therefore, the due date of filing return for
A.Y.2022-23 under section 139(1), in his case, is 31st July, 2022. Since Mr. Vineet
had submitted his return only on 12.9.2022, the said return is a belated return
under section 139(4).
As per section 139(5), a return furnished under section 139(1) or a belated return
u/s 139(4) can be revised. Thus, a belated return under section 139(4) can also be
revised. Therefore, Mr. Vineet can revise the return of income filed by him under
section 139(4) in December 2022, to claim deduction under section 80TTA, since
the time limit for filing a revised return is three months prior to the end of the
relevant assessment year, which is 31.12.2022.
However, he cannot revise return had he discovered this omission only on 21-03-
2023, since it is beyond 31.12.2022.
Question 3
Examine with reasons, whether the following statements are true or false, with
regard to the provisions of the Income-tax Act, 1961:
(i) The Assessing Officer has the power, inter alia, to allot PAN to any person by
whom no tax is payable.
(ii) Where the Karta of a HUF is absent from India, the return of income can be
verified by any male member of the family.
Answer
(i) True : Section 139A(2) provides that the Assessing Officer may, having
regard to the nature of transactions as may be prescribed, also allot a PAN
to any other person, whether any tax is payable by him or not, in the
manner and in accordance with the procedure as may be prescribed.
(ii) False : Section 140(b) provides that where the Karta of a HUF is absent from
India, the return of income can be verified by any other adult member of
the family; such member can be a male or female member.
Question 4
Explain the term “return of loss” under the Income-tax Act, 1961. Can any loss be
carried forward even if return of loss has not been filed as required?

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 10.44 INCOME TAX LAW

Answer
A return of loss is a return which shows certain losses. Section 80 provides that
the losses specified therein cannot be carried forward, unless such losses are
determined in pursuance of return filed under the provisions of section 139(3).
Section 139(3) states that to carry forward the losses specified therein, the return
should be filed within the time specified in section 139(1).
Following losses are covered by section 139(3):
• business loss to be carried forward under section 72(1),
• speculation business loss to be carried forward under section 73(2),
• loss from specified business to be carried forward under section 73A(2).
• loss under the head “Capital Gains” to be carried forward under section
74(1); and
• loss incurred in the activity of owning and maintaining race horses to be
carried forward under section 74A(3)
However, loss from house property to be carried forward under section 71B and
unabsorbed depreciation under section 32 can be carried forward even if return
of loss has not been filed as required under section 139(3).
Question 5
Mr. Aakash has undertaken certain transactions during the F.Y.2021-22, which are
listed below. You are required to identify the transactions in respect of which
quoting of PAN is mandatory in the related documents –

S.No. Transaction
1. Payment of life insurance premium of ` 45,000 in the F.Y.2021-22 by
account payee cheque to LIC for insuring life of self and spouse
2. Payment of ` 1,00,000 to a five-star hotel for stay for 5 days with
family, out of which ` 60,000 was paid in cash
3. Payment of ` 80,000 by ECS through bank account for acquiring the
debentures of A Ltd., an Indian company
4. Payment of ` 95,000 by account payee cheque to Thomas Cook for
travel to Dubai for 3 days to visit relatives
5. Applied to SBI for issue of credit card.

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 PROVISIONS FOR FILING RETURN OF INCOME AND SELF ASSESSMENT 10.45

Answer

Transaction Is quoting of PAN mandatory in

related documents?
1. Payment of life insurance premium No, since the amount paid does
of ` 45,000 in the F.Y.2021-22 by not exceed ` 50,000 in the
account payee cheque to LIC for F.Y.2021-22.
insuring life of self and spouse
2. Payment of ` 1,00,000 to a five-star Yes, since the amount paid in cash
hotel for stay for 5 days with family, exceeds ` 50,000
out of which ` 60,000 was paid in
cash
3. Payment of ` 80,000, by ECS through Yes, since the amount paid for
bank account, for acquiring the acquiring debentures exceeds
debentures of A Ltd., an Indian ` 50,000. Mode of payment is not
company relevant in this case.
4. Payment of ` 95,000 by account No, since the amount was paid by
payee cheque to Thomas Cook for account payee cheque, quoting of
travel to Dubai for 3 days to visit PAN is not mandatory even
relatives though the payment exceeds
` 50,000
5. Applied to SBI for issue of credit Yes, quoting of PAN is mandatory
card. on making an application to a
banking company for issue of
credit card.

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