Friday, April 30, 2021

Why Revised Return Concept Under Income Tax Law... {Article - 1}

Under Income tax law revised return is dealt in section 139(5). Now first question which must come to your mind that why there is concept of revised return. Revised return in simple words can be termed as return which is filed to correct error or mistake i.e. correct return. While filing ITR whether original return i.e. return filing for the first time for any assessment year or revised return, person may make some mistakes or error i.e. Human error, that is why Income tax law recognizes this problem or human error and allowed a person to c13orrect his mistake by filing revised return.

Right to file revised return is statutory right which has been given by section 139(5) therefore there is no need to take any permission from Assessing officer or no need to make any application to AO for filing revised return.

There is no cap on maximum number of filing revised return so revised return can be filed for multiple times without any cap on maximum number of revised return.

While filing revised return, person (whatever is applicable ITR form (form ITR 1 to ITR 7 as the case may be) has to give original return acknowledgement number (whether filed upto due date or filed belatedly i.e. after due date (you can also refer our article on belated return)) with the date of filing original return. As you must be aware that amendment (vide Finance Act, 2016) has been carried out in section 139(5) to grant revision right to person who has filed belated return so now belated return can also be revised .

Return can be revised even after processing of return i.e. after receipt of intimation, under section 143(1) of the Income-tax Act, 1961.

Loss return filed under section 139(3) can also be revised.

There is time-limit upto which revised return can be filed and such time limit is provided in section 139(5). Revised return can be filed at any time before expiry of the relevant assessment year (e.g. assume you have filed your original return on 5th July 2020 for AY 2020-21 now you could have filed revised return for AY 2020-21 upto 31st March 2021 and in this example it has been assumed that till 31st March 2021 assessment has not been completed) or before completion of the assessment whichever is earlier.

Finance Act, 2021 has once again reduced time limit for filing revised return because of massive technological upgrade in the Department where the processes under the Act are moving towards becoming faceless and jurisdiction-less, the time taken to conduct and complete such processes has greatly reduced. Therefore from assessment year 2021-2022 revised return can be filed at any time before 3 months prior to end of the relevant assessment year or before completion of the assessment whichever is earlier.

Assessee to declare Sale of Property either in Original Return or in the Revised Return and Pay Taxes: ITAT upholds disallowance of Loss of STCG

The Income Tax Appellate Tribunal (ITAT), Delhi Bench upheld the disallowance of loss of Short Term Capital Gain (STCG) and reiterated that the assessee must declare sale of property either in the original return or in the revised return and pay taxes.

The assessee filed her original return of income declaring an income of Rs.5,71,960/- along with paying double taxes of Rs. 43,230/- including self-assessment tax of Rs. 33,230/-. In the original return of income loss against sale of property of Rs.1,12,76,573/- was not claimed by the assessee under the bonafide belief that taxes are paid against income only. The assessee is a Government School Teacher till 2017 and left the job due to her health.

The assessee did not claim TDS of Rs.52,500/- deducted against the sale of property but paid additional self assessment tax of Rs. 33,230/-. The assessee has not claimed credit of Rs. 52,500/- as she was under the belief that TDS against loss is not claimable. The Assessing Officer assessed the total income of Rs.5,35,980/- and disallowed short term capital loss of Rs.1,12,76,573/- and did not allow the same to be carried forward for set off.

The assessee submitted that that if original return is filed before the due date and on discovery of any omission or wrong statement, return can be revised under section 139(5). The assessee further submitted that the entire process created artificial loss which is set off against subsequent capital gain income of Rs. 34,73,196/- in Assessment Year 2017-18 is incorrect observation by the Assessing Officer.

The assessee was not aware of future earning at the time of loss. It was submitted that the assessee set off this loss against income by filing belated return during assessment proceedings of Assessment Year 2015-16 after verbal confirmation of allowability of loss from the Assessing Officer. It proves the bonafide belief of assessee and even if the set off loss was ignored, the assessee was eligible to claim deduction under section 54F of the Income Tax Act, 1961 resulting in ‘NIL’ taxability in the hand of the assessee.

The Coram of R.K.Panda and Suchitra Kamble said that there was a sale of property which should have been declared by the assessee either in the original return or in the revised return and should have paid taxes accordingly or at the most should have offered to tax to the Revenue. Thus, the assessee has not done the same in the present case. There was property purchase and though the assessee is entitled to claim benefit under Section 54F, but the same is determined when she satisfies all the conditions laid down in the said provisions, the same was not done by the assessee at the revised income stage also.

Hence, the ITAT held that the Assessing Officer has rightly made additions, as well as the CIT(A), rightly confirmed the additions.

Thursday, April 29, 2021

Wrongful availment of ITC: Rajasthan HC refuses to grant Bail to accused of GST Scam worth Rs. 47 Cr

The Rajasthan High Court refused to grant bail to the person accused of wrongly availing ITC without the transportation of goods.

The petitioner, Sumit Dutta, was an employee in M/s Veto Merchandise and resigned in February 2020. It is also contended that petitioner has also furnished details to establish that there was actual movement of the goods. It is further contended that co-accused Bhasker Jangir has been given the benefit of bail by this Court. It is contended that offence is punishable by five years imprisonment and is triable by Magistrate.

The Public Prosecutor has opposed the bail application. It is contended that at the relevant time petitioner was a partner in M/s Veto Merchandise and a sum of Rs.47 crore was claimed as Input Tax Credit without any transportation of goods. It is also contended that on the basis of fake bills and invoices input tax credit was passed on to firms which were existing in papers. It is contended that the sum involved is to the tune of Rs.47 crore.

The single judge bench of Justice Pankaj Bhandari while upholding the contention of the public prosecutor rejected the bail application.

Tuesday, April 27, 2021

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