Revised return of income – last date allowed must be made rational ,logical ,reasonable and result oriented for more confidence building between tax department and tax payers.

[DEV KUMAR KOTHARI]

Section 139 of Income Tax Act ,1961 (Act or ITA in short)

Limitation for furnishing revised Return of Income ROI:

Provisions for furnishing revised ROI are found in sub-section (5) of section 139, which is within CHAPTER XIV of the ITA under chapter heading PROCEDURE FOR ASSESSMENT  with heading of section as Return of income.

This chapter relates to procedure for assessment in normal cases as well as in some special cases with reference to provisions relating to special circumstances.

Scope of this article:

In this article scope is restricted to last date allowed for filing revised ROI which can be filed under sub-section (5) of S.139.

The said sub-section is reproduced with highlights added, in split manner for easy analysis. In left column of the following table  with observations on important aspects in right column:

From provisions  as on 01.04.2021	Observations
Return of income.   80[ (5) If any person, having furnished a return under sub-section (1) or sub-section (4),	Original ROI already filed under S.139 (1) or 139(4) is a precondition.
discovers any omission or any wrong statement therein,	There should be some omission or wrong statement which is to be corrected in revised ROI. Words  ‘any omission’  or ‘any wrong statement’  are wide and mutually exclusive. It is not necessary that omission or wrong statement should have an impact on amount of income / loss  or tax payable or refund due
he may furnish a revised return	Filing of revised ROI is discretionary and not mandatory for assessee. Decision can depend on several factors like impact concerning present year and / or subsequent year’s e.g.  whether a claim omitted can be made in subsequent year or not?  If not, then fling of  revised ROI may be important. Significance of amount of impact on  income and tax payable or refund receivable. Serious ness of omission or mistake. Whether it  is in nature of inadvertent mistake  , minor mistake or can be  construed concealment of income or furnishing of inaccurate particulars of income etc. keeping in mind penal and prosecution provisions applicable.
at any time 95[before three months prior to the end] of the relevant assessment year	This fixes  last date or time limit permitted to file revised ROI. The permitted period has been reduced from time to time as we can notice from amendments in provision.  The other limit remains unchanged as discussed in next row.
or before the completion of the assessment, whichever is earlier.]	If the AO is very fast and completes assessment,  the limitation can   come to an end even before three months prior to the end of relevant assessment year (i.e. 31st December of AY) In this context, it must be regular assessment as per applicable provision like S. 143.3 or 144). Because an intimation issued us 143.1 is not final and even after issue of intimation us 143.1 notice for assessment can be issued u.s. 143.2. We have seen cases of intimations being issued within few minutes after filing of ROI based on examination with  artificial intelligence and tools. For this reason also intimation cannot be considered as assessment though it may be similar to or near about self-assessment by assesse.

Reduced limitation to file revised ROI is not justified:

We find that the time allowed   or limitation has been gradually reduced from three years to nine months from end of previous year . For example, now for AY 2021-22 (PYE 31.03.21) revised ROI could be filed only before 31.12.2021 that is nine months from end of PYE 31.03.21 and three months prior to end of AY 2021-22 on 31.03.22. This is irrespective of date of filing of ITR allowed and /or availed. If a person has filed ROI within permissible time say on 30.06.2021 or say on 31.12.2021 in both cases time allowed to file revised ROI was up to 31.12.2021.

Same last date allowed is not justified:

Time to file original ITR is scattered. This is not only to spread work of department  , tax return preparers , assesses but also because in some cases it require more time to be ready to file ITR due to high volume of work and data, many reports required ,  more complexities of applicable provisions and ITR form itself and documents to be furnished with or before filing of ITR.

Therefore, time allowed to file revised ROI should also be scattered in view of last date allowed for filing of original ITR.

The purpose of allowing revision of ITR is to remove omissions and misstatements in original ITR. Therefore, keeping last date for filing of revised ITR in all cases is not rational and justified.

Time limit can be fixed with reference to last date for issue of notice u.s.143.2

Time limit is fixed for issue of notice u.s. 143.2 for initiating scrutiny of ITR in  assessment proceeding in respect of ROI filed. Notice u.s.143.2 is issued when based on information available in ITR and other intelligence information it is found that the ITR deserves to be enquired into with more details and evidences to ascertain correct income and tax.

If an assesse finds it is advantageous to file revised ITR he will file revised ITR voluntarily. In fact many times we keep in mind points for which original ITR may be revised after ascertaining full facts and circumstances and legal position. In one sense the ITR filed is considered as provisionally filed due to some reasons like limitations or lack of full information. For such situation revised ITR is already in plan of assesse. For example, if more or less amount of TDS/ TCS is found because of revised returns filed by tax deductor / collector and there is revision in Form 26AS report.

In other cases, when ITR is filed with full information available and full application of mind it is good practice to keep that work done out of mind. Only in case of change in facts and circumstances or legal position filing of a revised ITR may be considered.

Many times department also issues notice us 143.2 when there is some substantial change in legal position or some substantial information is received suggesting need for scrutiny of ROI.  After issue of notice u.s. 143.2 notice u.s. 142 is issued for raising enquiries and asking for details and evidences.

Revised ROI can be considered a more confidence building exercise and reposing more confidence in assesses.

Therefore, to make process of revision of ROI time limit to revise ROI can be extended to say one month plus last date allowed to issue notice u.s.143.2

 Relevant amendment and history of amendments in tabular manner

For avoiding complexity and confusions amendments are given below:

80. Substituted vide THE FINANCE ACT, 2016  w.e.f.  1st day of April, 2017 before it was read as: 25[(5) If any person, having furnished a return under sub-section (1), or in pursuance of a notice issued under sub-section (1) of section 142, 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 the completion of the assessment, whichever is earlier : Provided that where the return relates to the previous year relevant to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, the reference to one year aforesaid shall be construed as a reference to two years from the end of the relevant assessment year.]"	At that relevant time ROI filed in response to notice u.s. 142.1 was also eligible for revising. Time limit was revised to one year from two years for ROI which was allowed till AY 1988-89. Thus we find that for AY 1988-89 (PYE 31.03.1988) three years time from end of PY  was allowed to file revised ROI.
86. Substituted vide THE FINANCE ACT, 2017 w.e.f. 1st day of April, 2018, before it was read as, " the expiry of one year from "
95. Substituted vide THE FINANCE ACT, 2021 dated 28-03-2021 w.e.f. 01-04-2021 before it was read as "before 86[***] the end"