CONTENTS PAGE u
List of Circulars/Notifications/Press Notes, etc.
I-15
RULE
2A 2B 2BA 2BB 2BBA 2BBB
2BC 2C 2DB & 2DC 2DD 2F
House rent allowance Leave travel concession Amount received on voluntary retirement Special allowances Family pension to heirs of members of Armed Forces Percentage of Govt. grant for considering university, etc., as substantially financed by Govt. for purposes of section 10(23C) Exemption for income of universities/ educational institutions/hospitals, etc. Charitable or religious institutions/ Educational institutions/Hospitals Sovereign Wealth Fund/Pension Fund Computation of exempt income of Specified Fund for the purposes of section 10(23FF) Guidelines for setting up Infrastructure Debt Fund
1 9 26 37 41
42 44 45 50
52 55 58
3
Valuation of perquisites
3A
Exemption to medical benefits/perquisites
129
3B
Provident Fund, Annual Accretion referred to in section 17(2)(viia)
142
4
Unrealised rent
144
5
Depreciation
148
5AC
Tea/Coffee/Rubber development account
200
5AD
Site restoration fund
201
I-5
CONTENTS RULE
5C to 5E
I-6 PAGE
Scientific Research Associations - Guidelines, conditions, etc., in respect of approval under clauses (ii) and (iii) of section 35(1)
202
Scientific Research Associations - Intimation under fifth proviso to section 35(1)
208
Scientific Research Associations - Guidelines, conditions, etc., in respect of approval under clause (iia) of section 35(1)
211
5G
Tax on income from patent
215
6
Scientific research, expenditure on
216
6A
Expenditure for obtaining right to use spectrum for telecommunication services
221
Expenditure on conservation of natural resources
223
6AAD & 6AAE
Agricultural extension project
224
6AAF & 6AAH
Skill development project
228
6AB
Amortisation of preliminary expenses, etc.
234
6ABA
Provision for bad and doubtful debts
235
6ABAA
Conditions for being notified as infrastructural facility
236
6ABBA
Other electronic modes
238
6DD
Disallowance of cash payments
239
6DDA & 6DDB
Speculative transactions - Derivatives
265
6E
Insurance business - Reserves for unexpired risks
270
5CA 5F
6AAC
6EA & 6EB
Categories of bad or doubtful debts in case of public company
271
6F
Maintenance of books of account
275
6G
Report of audit of accounts under section 44AB
285
I-7
CONTENTS
RULE
6GA
PAGE
Computation of income by way of royalties, etc., in case of non-residents
291
Computation of capital gains in case of slump sale
293
Income which is partially agricultural and partially from business
295
7A
Income from the manufacture of rubber
303
7B
Income from the manufacture of coffee
304
8
Income from manufacture of tea
309
8AA
Capital assets
318
8AB
Capital gains, attribution of income taxable under section 45(4) to capital assets remaining with specified entity, under section 48
320
Capital gains: Computation of short-term capital gains and written down value under section 50 where depreciation on goodwill has been obtained
329
Capital gains, Computation for the purposes of section 45(1B)
331
8B & 8C
Zero Coupon Bonds
342
8D
Method for determining amount of expenditure in relation to income not includible in total income
350
Amortisation of expenditure on feature films
365
Carry forward and set off of accumulated loss and unabsorbed depreciation allowance in case of amalgamation
376
9D
Provident Fund/Recognised Provident Fund
378
10
Determination of income in case of nonresidents
380
Transfer Pricing
389
6H 7
8AC
8AD
9A & 9B 9C
10A to 10THD
CONTENTS RULE
10DB
I-8 PAGE
Furnishing of report in respect of International Group
562
10RB
Minimum Alternate Tax
565
10U to
General Anti-Avoidance Rules
567
10V to 10VB
Certain activities not to constitute business connection in India
575
11A
Deductions to persons with disability or severe disability
588
Donation to charitable trusts, etc. requirement for approval of institution of fund under section 80G(5)(vi)
676
11B
Deduction in respect of rents paid
681
11DD
Deduction in respect of medical treatment for specified diseases
682
Deduction to industrial undertakings located in industrially backward districts
684
11F to 11-O
National committee for promotion of social and economic welfare
690
11-OA
Guidelines for notification of affordable housing project as specified business under section 35AD
697
Guidelines for notification of a semiconductor wafer fabrication manufacturing unit as specified business under section 35AD
701
10UF
11AA
11EA
11-OB
11P to 11T
Tonnage Tax Scheme for Shipping Companies 704
11U & 11UA(1)
Valuation of gifts
708
11UA(2)
Start-ups
716
11UAA
Special provision for full value of consideration for transfer of share other than quoted share
738
I-9
CONTENTS
RULE
11UAB
PAGE
Determination of fair market value of inventory
739
Prescribed class of persons for the purpose of clause (XI) of the proviso to clause (x) of sub-section (2) of section 56
740
Prescribed class of persons for the purpose of section 50CA
747
11UAE
Slump Sale
748
11UB & 11UC
Indirect transfer - Manner of determination of Fair Market Value & reporting requirement for Indian concern
751
11UAC
11UAD
11UD
Income deemed to accrue or arise in India Threshold for purpose of significant economic presence 764
11UE & 11UF
Income deemed to accrue or arise in India Specified conditions under Explanation to fifth/sixth proviso to Explanation 5 to section 9(1)(i)
766
12
Return of income
778
12A
Preparation of return by authorised representative
806
12AA
Return of income, signing of
808
12C
Tax on income received from Venture Capital Companies/Funds
809
12CA
Business Trust
810
12CB
Investment Fund
811
12CC
Securitization Trust
813
12D
Power to call for information by prescribed Income-tax Authority
814
12E
Prescribed authority under section 143(2)
819
12F
Prescribed Income-tax Authority under second proviso to section 142(1)(i)
821
Inquiry before assessment - Form of verification
822
14
CONTENTS RULE
I-10 PAGE
14A
Inquiry before assessment - Special Audit
823
14B
Guidelines for purposes of determining expenses for Special Audit
831
Faceless assessment: Prescribed manner of authentication of an electronic record under electronic verification code under section 144B(7)(i)(b)
833
15
Notice of demand
834
16
Avoidance of repetitive appeals
835
16B
Exemption in respect of remuneration to consultants, etc.
837
16C
Exemption to Employees’ Welfare Funds
838
16CC
Audit report to be furnished by certain entities referred to in section 10(23C)
839
16DD
Free Trade Zones, industrial undertakings in
841
17
Exercise of option under section 11
842
17A & 17B
Application for Registration of Charitable or religious trust etc.
849
17C
Modes of investment by charitable/religious trusts
855
17CA
Electoral Trust
859
17CB
Tax on accreted income of a trust
870
18AAA
Donations to universities/educational institutions
875
14C
18AAAAA Deduction on donations to games/sports associations/institutions 18AB
18BBB 18BBE 18C
Furnishing of statement of particulars and certificate under section 80G(5)(viii)/(ix) or under section 35(1A) Deductions to undertakings, hotels, etc. Deduction from profits of certain activities forming part of a Highway Project Deduction to undertakings operating notified industrial parks
876
878 880 884 888
I-11
CONTENTS
RULE
PAGE
19AB
Deduction in respect of employment of new workmen 19AC Deduction in respect of royalty income, etc., of authors of certain books other than text books 19AD Deduction in respect of royalty on patents 19AE Deduction in respect of certain incomes of Offshore Banking Units 20 & 20A Deduction under section 80C(2)(xix) and (xx) 21A Relief when salary is received in arrears or in advance 21AA 21AB 21AC 21AD 21AE & 21AF
Relief on salary in the case of specified employees Tax Residency Certificate for claiming double taxation relief Transactions with persons located in notified jurisdictional areas Tax on income of certain manufacturing domestic companies Tax on income of certain domestic companies/new manufacturing domestic companies
898
899 900 901 902 904 910 911 913 916
917
21AG
Tax on income of Individuals & HUFs
921
21AH
Tax on income of certain resident Co-operative societies
923
Computation of exempt income of specified fund under section 10(4D)
924
Foreign institutional investor: Determination of income of specified fund attributable to units held by non-residents under section 115AD(1A)
927
21AI 21AJ
21AJA & 21AJAA
Computation of exempt income of specified fund attributable to the investment banking division of an offshore banking unit for purposes of section 10(4D)/Determination of
CONTENTS RULE
I-12 PAGE
income of specified fund attributable to investment division of an offshore banking unit under section 115AD(1B)
930
Non-deliverable Forward Contracts/offshore derivative instruments or counter derivatives
936
26 to 37BC
Deduction of tax at source
937
37C to 37J
Collection of tax at source
1057
29A
Deduction in respect of certain items of receipts from foreign sources
1080
38
Notice of demand for advance tax
1081
39
Estimate of advance tax
1082
40B
Minimum alternate tax for companies
1083
40BA
Alternate Minimum Tax for Limited Liability Partnerships 1084
40BB
Tax on distributed income of domestic company for buy-back of shares
1085
Tax clearance certificate
1088
21AK
42 to 44
44C, 44CA Settlement Commission & 44D 44DA
1093
Settlement Commission: Exercise of option to withdraw application pending before Settlement Commission 1098
44E & 44F Advance rulings
1101
44G
1106
Mutual Agreement Procedure
45 to 46A Appeal to Commissioner (Appeals)
1138
47
Appeal to Appellate Tribunal
1147
49 to 66
Authorised representative
1150
67 to 81
Recognised provident funds
1162
82 to 97
Approved superannuation funds
1180
98 to 111
Approved gratuity funds
1194
111AA & 111AB
Conditions for reference to Valuation Officer
1202
I-13
CONTENTS
RULE
111B
PAGE
Publication and circulation of Board’s order
1209
112 to 112C
Search and seizure
1211
112D
Requisition of books of account, etc.
1222
112E
Collection of information
1224
112F
Search cases where compulsory reopening of past six years not required
1225
Disclosure of information respecting assessees
1228
113 114 114A 114AA 114AAA 114AAB
114B to 114D 114DA 114DB 114E to 114H 114-I 115 115A 117B & 117C 119A
Permanent Account Number Tax Deduction and Collection Account Number Tax Collection Account Number Aadhaar Number, Quoting of Permanent Account Number - Class or classes of persons to whom PAN provisions not applicable Quoting of Permanent Account Number or Aadhaar number in documents pertaining to certain prescribed transactions Furnishing of annual statement by a nonresident having liaison office in India Furnishing of information or documents by Indian concern in certain cases Obligation to furnish/statement of financial transaction or reportable account Annual Information Statement Rate of exchange for conversion of income in foreign currency Computation of capital gains on transfer of shares/debentures by non-residents Certificate to Tax Recovery Officer
1229
Procedure for calculation of interest
1401
1258 1261 1263
1265
1268 1279 1280
1283 1391 1394 1398 1399
CONTENTS RULE
119AA 121A 125 126 127 127A 128 129 131
I-14 PAGE
Acceptance of payment through prescribed electronic modes Statement by producers of cinematograph films Electronic payment of tax Residential status Service of notice Authentication of notices and other documents Foreign Tax Credit Immunity from prosecution under section 270AA Electronic furnishing of returns, etc.
1402 1405 1406 1409 1410 1420 1421 1425 1426
RULE 12*
Return of income The statutory background 12.1 Under section 139 of the Act, the following persons shall, on or before the prescribed due date, furnish a return of their income in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed : Section
Different situations
139(1)(a)
A company/firm is required to submit its return of income (regardless of the quantum of income or loss).
139(1)(b)
A person (other than an individual/HUF/AOP/BOI/artificial juridical person/company/firm) is required to submit his/its return of income, if income exceeds exemption limit.
139(1)(b), read with sixth proviso
Individual/HUF/AOP/BOI/artificial juridical person is required to submit his/its return of income, if income [without claiming deduction under sections 10(38), 10A, 10B, 10BA, 54, 54B, 54D, 54EC, 54F, 54G, 54GA, 54GB, 80C to 80U] exceeds the amount of exemption limit.
139(1)(b), read with seventh proviso
Any person (other than a company or a firm) who is not required to furnish the return of income under any other provision of section 139(1) and who during the previous year – a. has deposited an amount (or aggregate of the amounts) exceeding ` 1 crore in one (or more) current account(s) in a bank/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 conditions as may be prescribed.
139(4A)
A person in receipt of income derived from property held under a trust for charitable or religious purposes is required to submit return of income if its income (without giving exemption under section 11 or 12) exceeds exemption limit.
139(4B)
Chief executive officer of every political party is required to submit income-tax return if income of the political party (without giving exemption under section 13A) exceeds exemption limit.
*SECTION 139.
778
779
STATUTORY BACKGROUND
Section
Rule 12
Different situations
139(4C)
If total income (without claiming any exemption given below) of the assessee (who is qualified to claim exemption under the following sections) exceeds the exemption limit – - Section 10(21)
- Section 10(23D)
- Section 10(23FB)
- Section 10(22B)
- Section 10(23DA)
- Section 10(24)(a)/(b)
- Section 10(23A)
- Section 10(23EC)
- Section 10(29A)
- Section 10(23AAA)
- Section 10(23ED)
- Section 10(46)
- Section 10(23B)
- Section 10(23EE)
- Section 10(47)
- Section 10(23C)(iiiab)/ (iiiac)/ (iiiad)/(iiiae)/ (iv)/(v)/(vi)/(via)
139(4D)
Any university/college/other institution referred to in section 35(1)(ii)/(iii) is required to submit return of income (return has to be submitted whether there is income or loss. Such return has to be submitted even if it is not required by any other provision).
139(4E)/(4F)
These sub-sections cover submission of return by business trust/ investment fund.
u Compulsory filing of income-tax return in relation to assets located outside India
- In the case of a resident person (but other than not ordinarily resident), it is mandatory to furnish return of income if he/it at any time during the previous year, – a. holds (as a beneficial owner or otherwise) any asset (including financial interest in any entity) located outside India or has signing authority in any account located outside India, or b. is a beneficiary in any asset (including any financial interest in any entity) located outside India. For any person (may be individual or a person other than individual) who satisfies the above two conditions, furnishing of return has become mandatory, irrespective of the fact whether the person has taxable income or not. Exception - The above provisions shall not apply to an individual, being a beneficiary of any asset (including any financial interest in any entity) located outside India where, income, if any, arising from such asset is includible in the income of the person referred to in (a) (supra). Beneficial owner - In respect of an asset means an individual who has provided, directly or indirectly, consideration for the asset for the immediate or future benefit, direct or indirect, of himself or any other person. Beneficiary - In respect of an asset means an individual who derives benefit from the asset during the previous year and the consideration for such asset has been provided by any person other than such beneficiary. u Resident or non-resident - Section 139(1) applies to all persons whether they are
resident or non-resident—Pannalal Nandlal Bhandari v. CIT [1961] 41 ITR 76 (SC). Obligation to file return under section 139 cannot simply disappear merely because a person may be entitled to claim benefit of a DTAA—Castleton Investment Ltd., In re [2012] 211 Taxman 282 (AAR - New Delhi).
Rule 12
RETURN OF INCOME
780
u Political parties - Political parties are under a statutory obligation to file return
of income in respect of each assessment year in accordance with the provisions of the Income-tax Act and the total income for this purpose has to be computed without giving effect to provisions of section 13A—Common Cause A Registered Society v. Union of India [1996] 85 Taxman 600 (SC). u Liquidator - Under the Companies Act, a liquidator is not exempt from making
an income-tax return on business managed by him for the beneficial winding up of the company—CIT v. Official Liquidator of the Agra Spg. & Wvg. Mills Co. Ltd. [1934] 2 ITR 79 (All.). u Charitable trust - Submission of return by charitable trust is essential even if its
income is exempt—Lala Gopi Mal Kuthiala Trust v. ITO [1962] 46 ITR 436 (Punj.). If the total income of a charitable trust (without claiming exemption under sections 11, 12 and 13A) exceeds the maximum amount not chargeable to tax, then submission of return by the trust is essential. Rule 12 prescribes the forms in which the returns must be furnished. 12.1-2 Exemption from filing return u/s 139(1C) - See Annex 12.5. 12.1-3 Effect of filing return of income - In State of Karnataka v. Selvi J. Jayalalitha [2017] 78 taxmann.com 161 (SC) it was held that income-tax returns and orders would not ipso facto either conclusively prove or disprove charge of disproportionate assets (acquisition of assets disproportionate to known sources of income) and can at best be pieces of evidences which have to be evaluated along with other materials on record. In the said case it was held that where income tax returns relied upon by defence as well as orders passed in proceedings pertaining thereto had been filed/passed after charge-sheet had been submitted, neither income tax returns nor orders passed in proceedings relatable thereto, either definitively attested lawfulness of sources of income of accused persons or were of any avail to them to satisfactorily account disproportionateness of their pecuniary resources and properties as mandated by section 13(1)(e) of the Prevention of Corruption Act, 1988. It was further held that submission of income tax returns and assessments orders passed thereon, would not constitute a complete defence against a charge of acquisition of assets disproportionate to known lawful sources of income as contemplated under Prevention of Corruption Act and that further scrutiny/analysis thereof was imperative to determine as to whether offence as contemplated by Prevention of Corruption Act was made out or not. 12.1-4 Obligation to file return and DTAAs - In Castleton Investment Ltd., In re [2012] 24 taxmann.com 150/211 Taxman 282 (AAR - New Delhi) it was held that section 139 insists that every person, being a company, firm or a person other than a company or firm if its or his total income exceeds the maximum amount, which is not chargeable to income-tax, has to file a return of income. A company, which is entitled to claim the benefit of a DTAC, might have an income exceeding the maximum amount which is not chargeable to tax under the Act. On the language of section 139, such a person is bound to file a return of income. When a person claims the benefit of a DTAC, that person is invoking section 90(2) to do so. In other words, a person, earning an income that is chargeable to tax under the Act, has to make a claim by invoking section 90(2) for getting the benefit of a DTAC. So, even
781
E-FILING OF RETURN
Rule 12
if he would be entitled to seek relief under the DTAC, he has to seek it and that would be during the consideration of his return of income or at best while filing his return. If so, the obligation under section 139 cannot simply disappear merely because a person may be entitled to claim the benefit of a DTAC. 12.1-5 In case of firms - In Sasi Enterprises v. Asstt. CIT [2014] 41 taxmann.com 500/222 Taxman 78 (SC), it was held that a firm is independently required to file return of income; merely because partners of firm in their individual returns disclosed that no return had been filed by firm due to non-finalisation of books of account, would not nullify liability of firm to file its return as per section 139(1). Validity of Return Forms 12.2 In Om Prakash Tewari v. UOI [2007] 163 Taxman 199 (All.), it was held that new return Forms for assessment year 2007-08, introduced by Government, are applicable for year in question only and, therefore, as an interim measure, if returns were filed by petitioners and assessees in Saral 2D Form, same shall be entertained by authorities and shall not be rejected on ground that same were not in prescribed Forms ITR-1 to ITR-8. In All Gujarat Federation of Tax Consultants v. UOI [2007] 163 Taxman 196 (Guj.), it was held that Notification No. SO 762(E), dated 14-5-2007 introducing new return Forms could not be quashed on ground that new tax return Forms introduced by said notification are so complicated that it is impossible for a genuine taxpayer to file returns with supporting details. In Jodhpur Chartered Accountant Society v. Union of India [2007] 212 CTR (Raj.) 373, it was held that no prejudice was going to be caused to the Department if the assessees were allowed to submit return in Saral 2D Forms. If the returns were filed by the assessees of the State by submitting Saral 2D Forms, the same shall be entertained by the authorities and the same shall not be rejected on the ground that the same were not in the prescribed new Forms. In Union of India v. Income-tax Bar Association, Lucknow [2008] 169 Taxman 38 the Supreme Court held that whether the return should be filed in a particular Form is not the business of the Court. It is for the statutory authority to decide the same. In that case the Supreme Court observed that though the High Court had permitted the assessees to file income-tax returns in Form Saral 2D, instead of Forms ITR-1 to ITR-8, due to paucity of time and non-availability of adequate number of forms, since time for filing return in prescribed Form had been extended, impugned order was to be set aside and all the assessees, who had already filed return in Form Saral 2D pursuant to the impugned order, were to be directed to file return in the prescribed Form till the extended date. In Sujata Grover v. CIT [2014] 45 taxmann.com 36/223 Taxman 44 (Mag.)(Punj. & Har.) it was held that filing of income-tax return with an office which has no concern or connection with assessment of income of the assessee, in law, would amount to no filing of return under section 147, read with section 148. e-filing of return 12.3 In Crawford Bayley & Co. v. Union of India [2011] 16 taxmann.com 323/[2012] 204 Taxman 598 (Bom.) for relevant assessment year, the assessee-firm uploaded its return of income on official website of Department. It received an electronically
Rule 12
RETURN OF INCOME
782
generated mail from Department acknowledging e-filing of return of income. Subsequently, in accordance with instructions of Department, the assessee posted a copy of ITR-V Form duly signed by one of its partners. Said Form was remitted by ordinary post since instructions of Department specifically stipulated that ITRV Form should only be sent by ordinary post. The assessee received a communication stating that said Form had not been received at Centralized Processing Centre. Hence, once again the assessee submitted a copy of Form which was transmitted by ordinary post. Finally, by impugned communication, the assessee was informed that return of income filed in electronic format had been treated as invalid on ground that ITR-V Form had not been received by Central Processing Centre of Department. It was held that since assessee had furnished adequate material before Court in support of its contention that having filed return electronically, it had also submitted ITR-V Form by ordinary post, impugned communication was to be set aside by permitting assessee to file a verification of return before Assessing Officer within a period of one week from date of order. In Elecon Packpet v. ITO [2011] 15 taxmann.com 351/[2012] 49 SOT 402 (Chd. Trib.) the assessee had e-filed its original return of income in which no deduction under section 80-IC was claimed. However, the said deduction was claimed in the revised return. The explanation of the assessee in this regard was that it had claimed the deduction under section 80-IC in the original return of income but due to computer system error, the same was not reflected in the return. The Assessing Officer, however, rejected the explanation and refused to allow deduction under section 80-IC. It was held that the Assessing Officer had not pointed out any default in furnishing of the audit report under section 44AB. No reference was made to non-fulfilment of conditions for claiming deduction under section 80-IC by nonfurnishing of details of the audit report. Further, the assessee had within the prescribed period revised its return of income and had corrected the error in the original return of income. Therefore, the assessee could not be said to have not fulfilled the provisions of section 80-IC in furnishing the return of income prescribed under section 139(1), keeping in mind that this was first year of e-filing of return of income by the assessee. In view of the above, the appeal of the assessee was to be allowed. In Court On Its Own Motion v. CIT [2013] 31 taxmann.com 31 (Delhi) a public interest litigation was filed alleging numerous difficulties faced by income-tax assessees after implementation of computerization and central processing of returns. To remove such difficulties, mandamus were issued by the Delhi High Court regarding (i) maintenance of register for receipt and disposal of rectification applications under section 154; (ii) procedure prescribed under section 245 to be followed by CPC before making adjustment of refund payable with existing demand; (iii) past adjustments, where procedure under section 245 had not been followed; (iv) interest under section 244A to be allowed when assessee is not at fault; (v) uncommunicated intimation under section 143(1); (vi) verification and correction of unverified TDS in Form 26AS and unmatched challans, within a time period to be fixed; (vii) credit of TDS to an assessee when tax deducted has been deposited with revenue but incorrect particulars have been uploaded by deductor. Samir Narain Bhojwani v. Dy. CIT [2020] 115 taxmann.com 70 (Bom.) it was held that procedure of filing electronic return as per section 139D read with rule 12 cannot bar assessee from making claim which he was entitled to; assessee was
783
E-FILING OF RETURN
Rule 12
directed to make representation before CBDT where he was not able to reflect set off of loss available in terms of section 72 in prescribed return of income in electronic form. In Shapoorji Pallonji & Co. (P.) Ltd. v. Dy. CIT [2016] 76 taxmann.com 92 (Bom.) it was held that where the Assessing Officer was unable to process return due to system failure, the senior most officers of department would address issue on war-footing to ensure that the system runs efficiently so that the return could be processed and, refund, if any, could be granted. In Tata Projects Ltd. v. Dy. CIT [2017] 88 taxmann.com 325 (Bom.) it was held that whenever returns are transferred by Central Processing Centre to the Assessing Officer for processing, if returns cannot be processed immediately because of lack of availability of proper software, or because of technical difficulties in functioning of software, the Commissioner ought to permit the Assessing Officer to process returns manually. Where software is not provided to deal with returns of a particular year, there is no embargo imposed by law which prevents the Assessing Officer from processing returns manually. In Sumanchandra G. Mehta v. ITO [2013] 33 taxmann.com 25/60 SOT 21 (URO) (Mum. - Trib.) it was held that where there was clerical mistake in e-return, Assessing Officer should rectify such mistake. In E.K.K. & Co. v. Asstt. CIT [2012] 27 taxmann.com 111/[2013] 144 ITD 636 (Cochin - Trib.) the assessee uploaded return of income electronically on 25-9-2009 and claimed to have posted acknowledgement Form ITR-V on 5-10-2009. However, said acknowledgement was received at CPC, Bangalore on 29-11-2010, i.e., beyond period of 120 days as stipulated in scheme of e-filing. However, for relevant assessment year 2009-10, specified period was extended up to 31-12-2010. It was held that since acknowledgement was received by CPC within extended period, for all practical purposes, date of filing return would relate back to date on which return was electronically uploaded, i.e., 25-9-2009, and it could not be contended that date of receipt of Form ITR-V by CPC would be date of receipt of return. In Dwarkadas G. Panchmatiya v. Asstt. CIT [2015] 57 taxmann.com 2/153 ITD 625 (Mum. - Trib.) it was held that in terms of Electronic Furnishing of Return of Income Scheme 2007, assessee would be deemed to have furnished valid return of income if duly verified form ITR-V is filed within 15 days after e-filing of return; if ITR-V is filed thereafter, no deduction for section 80-IB, etc. would be allowed. In Himanshu Nalin Kaji v. Dy. CIT [2015] 60 taxmann.com 70/155 ITD 41 (Mum.Trib.) it was held that inadvertent mistake of not mentioning short-term capital gain in a column of ITR 4 is not fatal to assessee’s claim for concessional rate of tax under section 111A. In Fibres & Fabrics International (P.) Ltd. v. Dy. CIT [2016] 72 taxmann.com 87/160 ITD 102 (Bang. - Trib.) it was held that return of income could not be declared as invalid for belated receipt of Form ITR-V. In Luxury Goods Retail (P.) Ltd. v. Dy. CIT [2017] 83 taxmann.com 186/165 ITD 490 (Mum. - Trib.) it was held that when assessee could not file return electronically within due date due to technical reasons but manual return was filed within due date as specified under section 139(1), benefit of set off and carry forward of losses could not be denied.
Rule 12
784
RETURN OF INCOME
Due dates for filing returns under section 139(1) 12.4 The due dates prescribed for filing returns under section 139(1) for various categories of persons/situations are as follows: Situations
Due date for filing of return
If assessee is required to furnish a report of transfer pricing (TP) Audit in Form No. 3CEB
30th November
If assessee is a partner in a firm who is required to furnish a report of Transfer Pricing (TP) Audit in Form No. 3CEB
30th November
If an Individual is a spouse of a person, being a partner in a firm required to furnish a report of Transfer Pricing (TP) Audit in Form No. 3CEB, and the provisions of section 5A applies to such spouse.
30th November
Company assessee not required to furnish transfer pricing audit report in Form No. 3CEB
31st October
If assessee is required to get its accounts audited under Income-tax Act or any other law
31st October
If assessee is a partner in a firm whose accounts are required to be audited
31st October
If an Individual is spouse of a person, being a partner in a firm whose accounts are required to be audited, and the provisions of section 5A applies to such spouse.
31st October
In any other case
31st July
The prescribing of different dates for companies and other categories of assessees was held as not violative of article 14 of the Constitution - N. Vinodkumar & Co. v. Union of India [1999] 237 ITR 502 (Kar.). 12.4-1 When due date falls on a holiday - Where the due date falls on a day on which the income-tax office is closed, it has been clarified that the return can be filed on the next day afterwards on which the office is open, and that the return so filed will be treated as a return filed in time for all purposes. - CBDT Circular No. 639, dated 13-11-1992 [Annex 12.1]. 12.4-2 Extending the due date in special circumstances - Under section 119(2)(a) of the Act, the CBDT is empowered to relax the provisions of section 139 under certain specified special circumstances, and also correspondingly relax the requirement of levy of interest under section 234A/234B/234C. Form of return of income (as amended up to 28-3-2022) 12.5 Form of return of income, as per rule 12(1), shall be as under : (a) in the case of a person being an individual who is a resident other than not ordinarily resident and where the total income includes income chargeable to income-tax, under the head,— (i) “Salaries” or income in the nature of family pension as defined in the Explanation to clause (iia) of section 57; or (ii) “Income from house property”, where assessee does not own more than one house property and does not have any brought forward loss or loss to be carried forward under the head; or (iii) “Income from other sources”, except winnings from lottery or income from race horses and does not have any loss under the head,
785
FORM OF RETURN OF INCOME
Rule 12
be in Form SAHAJ (ITR-1) and be verified in the manner indicated therein: The provisions of (a) shall not apply to a person who,— (I) has assets (including financial interest in any entity) located outside India; (IA) has signing authority in any account located outside India; (IB) has income from any source outside India; (IC) has income to be apportioned in accordance with provisions of section 5A; (ID) has claimed deduction under section 57, other than deduction claimed under clause (iia) thereof; (IE) is a director in any company; (IF) has held any unlisted equity share at any time during the previous year; (IG) is assessable for the whole or any part of the income on which tax has been deducted at source in the hands of a person other than the assessee; (II) has claimed any relief of tax under section 90 or 90A or deduction of tax under section 91; (III) has agricultural income, exceeding five thousand rupees; (IV) has total income, exceeding fifty lakh rupees; (V) has income taxable under section 115BBDA; (VI) has income of the nature referred to in section 115BBE; (VII) is a person in whose case tax has been deducted under section 194N; or (VIII) is a person in whose case payment or deduction of tax has been deferred under sub-section (2) of section 191 or sub-section (1C) of section 192; (b) in the case of a person being an individual [not being an individual to whom clause (a) applies] or a Hindu undivided family where the total income does not include income under the head business or profession, be in Form No. ITR-2 and be verified in the manner indicated therein; (c) in the case of a person being an individual or a Hindu undivided family, who is a resident other than not ordinarily resident, or a firm, other than limited liability partnership firm, which is a resident deriving income under the head “Profits or gains of business or profession” and such income is computed in accordance with special provisions referred to in section 44AD, section 44ADA and section 44AE of the Act for computation of such income, be in Form SUGAM (ITR-4) and be verified in the manner indicated therein: The provisions of (c) shall not apply to a person who,— (I) has assets (including financial interest in any entity) located outside India; (IA) has signing authority in any account located outside India; (IB) has income from any source outside India; (IC) has income to be apportioned in accordance with provisions of section 5A;
Rule 12
RETURN OF INCOME
786
(ID) is a director in any company; (IE) has held any unlisted equity share at any time during the previous year; (IF) has total income, exceeding fifty lakh rupees; (IG) owns more than one house property, the income of which is chargeable under the head “Income from house property”; (IH) has any brought forward loss or loss to be carried forward under any head of income; (IJ) is assessable for the whole or any part of the income on which tax has been deducted at source in the hands of a person other than the assessee; (II) has claimed any relief of tax under section 90 or 90A or deduction of tax under section 91; (III) has agricultural income, exceeding five thousand rupees; (IV) has income taxable under section 115BBDA; (V) has income of the nature referred to in section 115BBE; or (VI) has income of the nature specified in clause (vi) of sub-section (2) of section 17 on which tax is payable or deductible, as the case may be, under sub-section (2) of section 191 or sub-section (1C) of section 192; (d) in the case of a person being an individual or a Hindu undivided family other than the individual or Hindu undivided family referred to in clause (a) or clause (c) or clause (ca) and having income under the head business or profession, be in Form No. ITR-3 and be verified in the manner indicated therein; (e) in the case of a person not being an individual or a Hindu undivided family or a company or a person to which clause (g) applies, be in Form No. ITR5 and be verified in the manner indicated therein; (f) in the case of a company not being a company to which clause (g) applies, be in Form No. ITR-6 and be verified in the manner indicated therein; (g) in the case of a person including a company whether or not registered under section 25 of the Companies Act, 1956 (1 of 1956), required to file a return under sub-section (4A) or sub-section (4B) or sub-section (4C) or sub-section (4D) of section 139, be in Form No. ITR-7 and be verified in the manner indicated therein. Filing of audit report with return of income 12.6 Rule 12(2) provides that returns shall not be accompanied by a statement showing the computation of the tax payable on the basis of the return, or proof of the tax, if any, claimed to have been deducted or collected at source or the advance tax or tax on self-assessment, if any, claimed to have been paid or any document or copy of any account or form or report of audit required to be attached with the return of income under any of the provisions of the Act. Proviso to rule 12(2) provides that where an assessee is required to furnish a report of audit specified under sub-clause (iv), (v), (vi) or (via) of clause (23C) of section 10, section 10A, section 10AA, clause (b) of sub-section (1) of section 12A, section 44AB, section 44DA, section 50B, section 80-IA, section 80-IB, section 80-IC, section 80-ID, section 80JJAA, section 80LA, section 92E, section 115JB, section 115JC or section 115VW or to give a notice under section 11(2)(a) of the Act, he shall furnish the same electronically.
787
Rule 12
MANNER OF FURNISHING RETURN OF INCOME
Thus, following forms shall be submitted electronically : Section
Form No.
10(23C)(iv)
10BB
10(23C)(v)
10BB
10(23)(vi)
10BB
10(23C)(via)
10BB
10A
56F
10AA
56F
11(2)(a)
10
12A(1)(b)
10B
44AB
3CA, 3CB, 3CD
44DA
3CE
50B
3CEA
80-IA
10CCB
80-IB
10CCB, 10CCBA, 10CCBB, 10CCBC, 10CCBD
80-IC
10CCB
80-ID
10CCBBA
80JJAA
10DA
80LA
10CCF
92E
3CEB
115JB
29B
115JC
29C
115VW
66
Manner of furnishing return of income (as amended up to 28-3-2022) 12.7 Rule 12(3) provides that the return of income shall be furnished by a person mentioned in column (ii) of the Table below to whom the conditions specified in column (iii) apply, in the manner specified in column (iv) thereof:— TABLE Sl. No.
Person
Condition
Manner of furnishing return of income
(i)
(ii)
(iii)
(iv)
1
Individual or Hindu undivided family
(a) Accounts are required to be audited under section 44AB of the Act;
Electronically under digital signature;
(b) Where total income assessable under the Act during the previous year of a person,
(A) Electronically under digital signature; or (B) Transmitting the data electronically in the
Master Guide To Income Tax Rules AUTHOR PUBLISHER DATE OF PUBLICATION EDITION ISBN NO NO. OF PAGES BINDING TYPE
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Description This unique book provides an in-depth Rule-wise commentary on the Income Tax Rules, 1962. The Present Publication is the 29th Edition, incorporating all the amendments till the Income-tax (Second Amendment) Rules, 2022. Taxmann’s Editorial Board authors this book with the following coverage: u
[Detailed Analysis] on every Rule of Income Tax Rules, 1962
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[Statutory Background of the Section] which delegates the power to the Central Board of Direct Taxes to notify the Rule
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[Simplified Language] to explain each provision of the Rules
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[Gist of All Circulars and Notifications] issued by the Department in each Rule, which are still in force
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[Income-tax Compliances] to be done in each Rule
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