JK SHAH CLASSES Direct Tax – CA Inter Nov’2023
CHAPTER 11 – RETURN OF INCOME
Section 139(1) : Mandatory Filing of Return of Income
Company / Firm Other Assessees [Ind.
/ HUF etc.]
Always Mandatory
If Total Income* >
Basic Exemption Limit
*Total Income means, Income before Claiming Chapter VI-A Deductions and Capital Gains
Exemptions [54 Series]
Note: It is also Mandatory to File Return of Income in below cases,
(Irrespective of even if Total Income is <= Basic Exemption Limit)
I] If Assessee is Resident & Ordinarily Resident AND
o He is Beneficial Owner of Any Asset Outside India
OR
o He is having Signing Authority in an Account Outside India
OR
o He is Beneficiary of Any Asset Outside India
Asset includes, Financial Interest in an Entity Outside India e.g. Partner in a Foreign Firm
Account can be any Bank Account, Trading Account etc.
Prof. Chirag Goyal P a g e 1 | 11
JK SHAH CLASSES Direct Tax – CA Inter Nov’2023
Beneficial Owner is a,
Person Directly / Indirectly In An Asset Outside
Invests India
Himself / Other Immediate / Future
For
Person* Benefit of
*Such Other Person is Beneficiary
However, If, Income from Such Asset is included in Total Income of Beneficial Owner,
Beneficiary is NOT Required to File Return
E.g.
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
Prof. Chirag Goyal P a g e 2 | 11
JK SHAH CLASSES Direct Tax – CA Inter Nov’2023
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
II] Return Filing is Also Mandatory (even if Total Income <= Basic Exemption Limit)
If the Assessee has done,
o Aggregate Deposits in Current Account (one or more) of > 1 Cr During the Year
OR
o Aggregate Expenditure on Foreign Travel of Himself / Any Other Person of > 2 Lacs
During the Year
OR
o Aggregate Expenditure on Electricity Bills of > 1 Lacs During the Year
Prof. Chirag Goyal P a g e 3 | 11
JK SHAH CLASSES Direct Tax – CA Inter Nov’2023
III] From 2022-23 Onwards,
Below Additional Criteria also added for Mandatory Filing of Return (even if Total Income
<= Basic Exemption Limit)
o If the Total Sale / Turnover / Gross Receipts of Business > 60 Lacs During the Year
OR
o If Gross Receipts of Profession > 10 Lacs During the Year
OR
o If Aggregate TDS / TCS During the Year >= ₹ 25,000
[>=₹ 50,000 for Resident Senior Citizen]
OR
o If Aggregate Deposits in Savings Account (one or more) of >= 50 Lacs During the
Year
Due Date to File Return :
31.10.20AY 30.11.20AY 31.07.20AY
For Company Assessee Undertaking All Other Assessees
Persons Covered Under Tax International
Audit Transactions
Partners of Firm / LLP [Covered in CA Final]
Covered Under Tax Audit
Prof. Chirag Goyal P a g e 4 | 11
JK SHAH CLASSES Direct Tax – CA Inter Nov’2023
Section 139(3) : Return of Loss
If Assessee wants to Carry Forward any Losses During the Year
Then,
Return of Income for Such Year must be Filed within Due Date [As Per Section 139(1)]
If It is Filed after Due Date, Such Losses CANNOT be Carried Forward
Exception :
House Property Loss & Unabsorbed Depreciation
[They can be still Carried Forward]
E.g.
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
Prof. Chirag Goyal P a g e 5 | 11
JK SHAH CLASSES Direct Tax – CA Inter Nov’2023
Section 139(4) : Belated Return
If Assessee could not File Return within Due Dates
Then,
He CAN File Belated Return
Time Limit : Before 3 Months from the End of Assessment Year i.e. 31/12/AY
OR
Completion of Assessment
Whichever is Earlier
E.g.
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
Consequences of Belated Return :
1. Interest U/s. 234A applicable @ 1% Per Month or Part Thereof
Calculated
From : Date Next to Due Date
To : If Return is Filed Date of Filing
If Return is Not Filed Date of Completion of Assessment
Prof. Chirag Goyal P a g e 6 | 11
JK SHAH CLASSES Direct Tax – CA Inter Nov’2023
Such Interest is Calculated on Self-Assessment Tax Payable
E.g.
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
2. Late Fee U/s. 234F applicable
If Total Income* <= 5 Lacs Late Fee is ₹ 1,000
If Total Income > 5 Lacs Late Fee is ₹ 5,000
*Total Income means, Net Total Taxable Income i.e. after all Exemptions & Deductions
3. Carry Forward of Losses Other Than House Property Loss and Unabsorbed Depreciation
is NOT Allowed
4. Income Category Deductions in Chapter VI-A [Section 80QQB, 80RRB and 80JJAA] are
NOT Allowed
Prof. Chirag Goyal P a g e 7 | 11
JK SHAH CLASSES Direct Tax – CA Inter Nov’2023
Section 139(5) : Revised Return
If Assessee discovers Any Omission / Wrong Statement in Return after Filing
Then,
He CAN File Revised Return
Time Limit : Before 3 Months from the End of Assessment Year i.e. 31/12/AY
OR
Completion of Assessment
Whichever is Earlier
Note: Section 139(1), Section 139(3), Section 139(4) and even a Revised Return U/s. 139(5)
All these returns can be revised (within time limit)
Section 139(8A) : Updated Return
If Assessee Failed to File the Return of Income within Due Date and the Time Limit for Filing
Return is Expired
OR
If Assessee Filed Return of Income but wanted to Revise it and the Time Limit for the Revise
Return is expired
Such Assessee CAN Submit “Updated Return”
Time Limit : Upto 2 Years from the End of Relevant Assessment Year
Prof. Chirag Goyal P a g e 8 | 11
JK SHAH CLASSES Direct Tax – CA Inter Nov’2023
E.g.
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
Note:
1. Updated Return CANNOT be Filed if :
o Assessee wants to Claim Loss in Updated Return
OR
o Assessee wants to Decrease Tax Liability as Reported in Original / Belated / Revised
Return
OR
o Assessee wants to Claim Refund or Increase Refund as Reported in Original / Belated /
Revised Return
2. Updated Return CANNOT be again Updated
3. If ANY Assessment Proceeding is Going on / Completed with Respect to a Year
Then,
Updated Return CANNOT be filed for Such Year
4. If Original Return was a Return of Loss
Then,
Updated Return CAN be a Return of Income
Prof. Chirag Goyal P a g e 9 | 11
JK SHAH CLASSES Direct Tax – CA Inter Nov’2023
In Such Case,
Return of Subsequent Years MUST also be updated
E.g.
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
Section 139(9) : Defective Return
If Assessing Officer finds ANY Mistake in the Original Return
Then,
He will send a Notice to the Assessee to Correct Such Defect
Within 15 Days (or Such Extended Time on Request of Assessee)
If,
Defect is Rectified within Such Time, Return will be Accepted
Otherwise, It will become Invalid (Invalid is as good as Not Filed)
Prof. Chirag Goyal P a g e 10 | 11
JK SHAH CLASSES Direct Tax – CA Inter Nov’2023
Section 139A : Permanent Account Number [PAN]
Persons required to apply for PAN :
o Every Person having Total Income [Net Total Taxable Income] > Basic Exemption Limit
OR
o Every Person carrying on Business / Profession having Total Sales / Turnover / Gross
Receipts > 5 Lacs During the Year
OR
o Every Resident Person other than Individual entering into Aggregate Financial
Transaction of >= ₹ 2,50,000 in a Year
OR
o Every Manager / Director / Partner / Karta etc. of Above Mentioned Person
Note:
Apart From Above, PAN can also be applied Voluntarily
Rule 114B : Mandatory Quoting of PAN
CBDT has Notified below List of Transactions in which Quoting of PAN is Mandatory
o Sale or Purchase of Motor Vehicles (other than 2 wheelers)
o Opening Bank / Demat Account
o Application for Debit Card / Credit Card
o Single Payment of Hotel / Restaurant Bill in CASH > ₹ 50,000
o Single Payment for Purchase of Foreign Currency / Foreign Travel in CASH > ₹ 50,000
o Purchase of Mutual Funds > ₹ 50,000
Prof. Chirag Goyal P a g e 11 | 11
JK SHAH CLASSES Direct Tax – CA Inter Nov’2023
o Purchase of Bonds / Debentures > ₹ 50,000
o Purchase of RBI Bonds > ₹ 50,000
o Cash Deposit in Bank or Post Office > ₹ 50,000 In a Day
o Purchase of Bank Drafts in CASH > ₹ 50,000 In a Day
o Making Time Deposits in Bank or Post Office etc. for > ₹ 50,000 Single Transaction or ₹
5,00,000 Aggregate Transactions In a Year
o Payment for Pre-paid Instruments in CASH / DD etc. > ₹ 50,000 In a Year
o Payment for Life Insurance Premium > ₹ 50,000 In a Year
o Sale or Purchase of Bonds / Debentures > ₹ 1,00,000 Per Transaction
o Sale or Purchase of Unlisted Shares > ₹ 1,00,000 Per Transaction
o Sale or Purchase of Immovable Property if Agreement or Stamp Duty Value > ₹ 10,00,000
o Sale or Purchase of ANY Other Goods / Services > ₹ 2,00,000 Per Transaction
Note:
1. If any of the Above Transactions are done by a Minor, Then PAN of Parent / Guardian is to be
Quoted.
2. If a Person has Aadhar but is not having PAN, can Quote his Aadhar instead of PAN
Section 139AA : Mandatory Quoting of Aadhar
PAN and Aadhar are now used Interchangeably
However, Aadhar is to be Mandatorily quoted :
o In Application of PAN
o In Return of Income
Prof. Chirag Goyal P a g e 12 | 11
JK SHAH CLASSES Direct Tax – CA Inter Nov’2023
Every Person having PAN was required to Link it with his Aadhar On or Before 31.03.2022
If, PAN & Aadhar were not Linked upto 31.03.2022
Additional time was given Subject to Payment of Fees U/s. 234H
o Upto 30.06.2022, Late Fees of ₹ 500 applicable
o After that upto 31.03.2023, Late Fees of ₹ 1,000 applicable
If PAN & Aadhar are not Linked upto 31.03.2023, PAN will become INOPERATIVE
Also Additional Consequences are :
o Returns CANNOT be filed with Inoperative PAN
o Pending Returns will NOT be Processed
o Pending Refunds will NOT be Issued
o Pending Proceedings for Defective Return (If Any) will NOT be Completed
o Tax will be Deducted at Higher Rates
Quoting of Aadhar NOT Applicable to Following Persons :
o Residents of Assam, Jammu & Kashmir and Meghalaya
o Non-Residents
o Individuals Aged >= 80 Years At Any Point of Time During the Year
o Foreign Citizens
Prof. Chirag Goyal P a g e 13 | 11
JK SHAH CLASSES Direct Tax – CA Inter Nov’2023
Section 139B : Submission of Returns through Tax Return Preparers [TRP]
TRPs are people who assist in Filing the Return of Income
Who CAN be a TRP
Individual who holds Bachelor Degree or has passed Intermediate Exam of ANY
Professional Course [CA/CS/CMA]
Who CANNOT be a TRP
o Banker
o Lawyer
o Accountant [CA/CMA]
o Employee of Specified Person
Note: Specified Person is a Person, Other than Company or Person Covered under Audit
Who CAN File the Return Through TRP
Individuals or HUF
EXCEPT :
o Individuals / HUF covered under Audit OR
o Non-Residents
Note: A TRP can File Revised Return ONLY if Original Return was filed by him
Prof. Chirag Goyal P a g e 14 | 11
JK SHAH CLASSES Direct Tax – CA Inter Nov’2023
Section 140 : Persons Authorised to Verify Return of Income
Assessee Circumstance Authorised Signatory
I] Individual Normally Himself
If he’s Absent from India Himself or
Any Person Holding
Power of Attorney
If he’s Mentally Incapacitated His Guardian or
Any Person Competent to
Act on His Behalf
Any Other Reason Due to Any Person Holding
Which he Cannot Verify Power of Attorney
II] HUF Normally Karta
If Karta is Absent from India Any Other Adult Member
of HUF
If Karta is Mentally Any Other Adult Member
Incapacitated of HUF
III] Company Normally Managing Director
There is No Managing Director Any Director or
or he Cannot Sign Any Other Person* as may
be Prescribed
Company is Non-Resident Any Person Holding
Power of Attorney
Prof. Chirag Goyal P a g e 15 | 11
JK SHAH CLASSES Direct Tax – CA Inter Nov’2023
Company into Liquidation Liquidator
Company into Insolvency Insolvency Professional
Company management taken Principal Officer appointed
over by Government by Government
IV] Firm Normally Managing Partner
There is No Managing Partner Any Partner other than
or he Cannot Sign Minor
V] LLP Normally Designated Partner
There is No Designated Partner Any Partner or
or he Cannot Sign Any Other Person* as may
be Prescribed
VI] Local Authority Principal Officer
VII] Political Party Chief Executive Officer of
Such Party
VIII] Any Other Association Any Member of
/ Person Association or Principal
Officer / Person
Competent to Act
Note: Any Other Person Prescribed for Company / LLP is a Person appointed by NCLT
Prof. Chirag Goyal P a g e 16 | 11
