Scenarios, Solutions, and Provisions TAXCONCEPT

The last date for filing income tax returns (ITR) is a critical deadline, and many taxpayers find themselves grappling with challenges post the deadline. In the fiscal year 2022-23, several issues have arisen from non-filing, delayed filing, or improper filing of returns. This article will provide insight into these various scenarios, offer potential solutions, and elucidate the provisions of the Income Tax Act, including belated return, verification of ITR, revised return, rectification of ITR, and defective return.

BELATED RETURN: 2.1 Scenario 1: Mr. Anuj is a salaried employee having Long Term Capital Loss in the FY 2022-23. He could not file his return till 31st July 2023. What shall he do now?

2.2 Solution: Mr. Anuj can file a belated return by 31st December 2023. However, he will not be able to carry forward the Long Term Capital Loss. 2.3 Relevant

Provisions:- The relevant provisions are as indicated below:-

(a) Belated return means the filing of income tax returns after the due date or extended due date under section 139(4) of the Income Tax Act.

(b) Belated returns can be filed by 31st December of the assessment year or before completion of the assessment, whichever is earlier. For FY 2022-23, the last date to file a belated return is 31st Dec 2023.

(c) A belated income tax return attracts a late filing fee of Rs 5000 /- under Section 234F of the Income Tax (I-T) Act. However, the fee payable shall not exceed Rs. 1,000 where the total income of the person does not exceed Rs. 500000.

(d) Apart from the penalty for late filing, interest under section 234A at 1% per month or part thereof will be charged on the unpaid tax amount.

(e) In addition to financial implications, the taxpayer will also stand to lose certain benefits. The losses under the head Profit & Gain from Business or profession or Capital Gain heads are not allowed to be carried forward in a belated return.

(f) Tax regime cannot be changed at the time of filing the belated return. This option is available to the individual having income from salary, house property, or other sources on filing the original ITR by the due date i.e. 31st July.


3.1 Scenario 2 Mr. Arindam hurriedly filed his Income Tax Return on 31st July 2023 but forgot to verify the Return. He is worried about potential repercussions.

3.2 Solution: Mr. Arindam has time to E- Verify the return by 30th August 2023. In case he failed to verify the return by 30th August 2023, a request for condonation of delay by providing an appropriate reason for the delay needs to be submitted to the Department.

3.3 Relevant Provision (a) Verification of ITR is the most important step of the tax return filing process. Once the return has been filed or successfully submitted online, it needs to be verified by the assessee. After this, the income tax department considers it for further processing.

(b) The ITR will be treated as invalid in the absence of verification

(c) There are 2 ways to verify ITR, offline & online. Verifying a tax return using any online mode is called e-verification of income tax return (ITR) and when the acknowledgment (ITR V) is posted to CPC Bangalore it is called offline verification.

(d) The time limit for e-verification or submission of ITR-V is 30 days from the date of filing the return of income.

(e) If the ITR is verified beyond 30 days, the date of verification will be treated as the date of furnishing the Income Tax return. The consequences of belated filing will be faced by the taxpayer in such cases.

(f) The return can be e-verified online by using (a) OTP on a mobile number registered with Aadhaar, (b)EVC generated through a pre-validated bank account, or (c )EVC generated through pre-validated demat account, or (d)EVC through ATM (offline method), or (e) Net Banking, or (f)Digital Signature Certificate (DSC). (g) EVC (Electronic Verification Code) is a 10-digit alpha-numeric code that is sent to the taxpayer’s mobile number and email ID registered with the e-Filing portal/bank account / demats account (as the case may be) during the process of e-Verification. It has 72-hour validity from the time of its generation (h) The taxpayer can file a request for condonation of the delay in verification of ITR over the e-filing portal. If the income tax officers deem fit, they can accept the request and give the taxpayer a chance to verify the ITR beyond the stipulated date. Condonation of delay is a special relief provided by the Income Tax Department to taxpayers for late filing or verification of ITR.


4.1 Scenario 3: Mr. Bimal e-verified and submitted his return on 15 July 2023. Afterward, he realized that deductions under section 80 were not claimed by him. 4.2 Solution: Mr. Bimal can file a revised return by 31st December 2023. 4.3 Relevant Provision: Section 139(5) of the Income Tax Act prescribes the provision of Revise Return:-

(a) Any person, having furnished the original return discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the last date of filing the return (31st December) or before the completion of the assessment, whichever is earlier

(b) For the revised return related to the financial year 2022-23, the deadline would be on or before 31st December 2023, provided the assessment of the original return has not been completed before that date.

(c) The taxpayer shall ensure that the original income tax return is e-verified

(d) The original return filed will be substituted by the revised return.

(e) Revised Returns can be filed twice or even more.

(f) Tax regime cannot be changed at the time of filing a revised return

(g) Revised income tax return can be filed for belated return also

(h) ITR Form can be changed while filing a Revised Return


5.1 Scenario 4 Ms. Charu received intimation under section 143(1). The details provided in the tax returns are matching with that of the computerized returns, and the tax return has been processed without any adjustments. Solution: Ms. Charu need not do anything.

Relevant Provision: The income tax return filed by the taxpayer is processed by the Central Processing Centre (CPC) of the Income Tax Department. After processing the ITR, the department sends a notice cum communication to the registered e-mail address. A text message is also sent on the registered mobile number indicating that ITR for AY 2023-24 and PAN abcxxxxx1r has been processed at CPC & Intimation u/s 143(1) has been sent to your registered email ID. The details in the intimation notice will have tax computation details as reported in ITR with a table indicating the amount as computed by the department under section 143(1). In case the details provided in the tax returns matches with that of the computerized returns, and the tax return has been processed without any adjustments. Intimation notice received will be with no demand or no refund and the taxpayer need not do anything.


5A.2 Scenario 5A Ms. Divya received intimation under section 143(1) received and it is showing the mismatch. The taxable income reported in the ITR is not matched with the taxable income as computed by the income tax.

5A.3 Solution: Ms. Divya can submit a request for rectification of errors under section 154 of the Income Tax Act.

5A.3 Solution: Ms. Divya can submit a request for rectification of errors under section 154 of the Income Tax Act.

5A.4 Relevant Provisions: Section 154 of the Income Tax Act prescribed provisions regarding requests for Rectification of Errors in ITR.

(a) Rectification is an option given by the Income Tax Department for correcting a mistake apparent from the record in Income Tax Return. The taxpayer needs to submit a rectification request if there is any mistake apparent from the record in the tax return notified in intimation issued u/s 143(1) by the CPC.

(b) The taxpayer can file online rectification with CPC after logging in to the e-Filing account.

(c) A rectification request can only be filed in response to a notice/order/intimation from CPC for a specific e-filed return.

(d) The mistakes apparent from the record are considered for rectification. The different request types for income tax rectification are

(i) reprocess the Return

(ii) Tax Credit Mismatch Correction

(iii) Additional Information for 234C Interest

(e) Claiming new deductions/claims/tax credits are not allowed in rectification requests

(f) The taxpayer cannot withdraw a rectification request already submitted. A rectification request once submitted will be closed only after a Rectification Order is passed

(g) Rectification requests cannot be revised

(h) ITR Form cannot be changed while submitting a rectification request.

(i) If the taxpayer had e-Verified the ITR through DSC, he needs to e-verify the rectification request using DSC only.

(j) The rectification request can be submitted within 4 years from the end of the financial year in which the order sought to be amended was passed. CPC Order No./ Intimation No. / DIN of the latest filed ITR is required to be quoted for rectification request. These details are auto-populated and non-editable for Income Tax


6.1 Scenario 5: Mr. Sanjeev filed ITR 1 on 30th June 2023 and received notice under section 139(9) for defective return on 10 Aug 23. The reason for the defect is that he ignored his AIS (Annual Information Statement), showing the sale of securities. ITR 2 was required to be filed in case of Capital Gain/ Loss in the sale of securities.

6.2 Solution: Mr. Sanjeev can revise his ITR or submit his response within 15 days of receiving the said notice.

6.3 Relevant Provisions:

(a) Defective return is a return of income that is rejected by the Income Tax Department due to certain defects. After the defects are identified by the department, a notice under section 139(9) is issued to the assessee

(b) The Common reasons for a defective return notice include the usage of the incorrect ITR form, mismatch in 26AS details with income and TDS reported in ITR, incomplete or inconsistent information, or the absence of mandatory audit reports for certain entities.

(c) Time limit to respond to a notice for a defective return is 15 days from the date of receiving the notice or as the time duration specified in the notice to rectify the defect in the return filed.

(d) If the taxpayer fails to respond to the defective notice within the stipulated period then the return may be treated as invalid and therefore consequences such as penalty, interest, non-carry forward of losses, and loss of specific exemptions may occur, as the case may be in accordance with the Income Tax Act

(e) The taxpayer can correct a defective ITR by filing a revised return if the last date to file a return has not been over. For FY 2022-23 the last date to file a revised return is December 31, 2023.

(f) Another option with the taxpayer is to respond to the notice by login to e- filing portal. Go to the ‘e-File’ menu, and click ‘Response to Notice u/s 139(9)’. The portal will display details of the notice and identified defects in the ITR. Here, one can agree or disagree with the defects and provide necessary remarks. For any revisions made, it is recommended to use the latest ITR utility to generate the XML accordingly.

Conclusion – Action/Reaction The Income Tax Act has provided remedies for taxpayers who missed the due date or made errors in the filing of the ITR for FY 2022-23. Understanding these scenarios and following the prescribed steps can mitigate the consequences of these errors. It is vital to be vigilant about the deadlines and adhere to the correct procedures to avoid penalties and ensure compliance with the tax laws. Consulting with a professional or referring to educational resources can be beneficial in navigating these complex scenarios, thus fostering a more responsible and informed approach to taxation.

Educational purposes only.

CA Anita Bhadra MUMBAI, Maharashtra

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