Belated filed return can also be revised now

TAX TALK-16.10.2017-THE HITAVADA

TAX TALK

CA. NARESH JAKHOTIA

Chartered Accountant

Error in income tax return forms can be corrected by filing a revised return. Earlier, revision option was available only if the original return was filed within due date i.e., revised return filing option was available in case original return is filed after due date. However, the law has now been amended from AY 2017-18 so as to allow the filing of revised return even if the original return is filed belatedly i.e., after the due date. Now, return filed belatedly can be revised.

Belated filed return can also be revised now

Query 1]

While filing my income tax return for FY 2016-17 (AY 2017-18), there had been some incorrect entries made by the person preparing  the return on my behalf. The same were corrected immediately by filing a revised return on 30-07-17. However, after a few days I noticed another mistake, in the entry of amount of cash deposit (old denominations) during period 08-11-16 to 30-12-16 in one of my bank accounts. Against an actual deposit of Rs. 90,000/- in this account, the amount entered was Rs. 1,88,000/-. Due to this, the total cash deposited in all my accounts, which was actually below Rs. two lakhs (Rs. 1,97,000/-) seemed to exceed Rs. two lakhs. When asked to correct this error, I was informed that the ITR can be revised only once and since ITR is already revised, no further amendment is possible. Now, although the actual details can easily be verified from bank records if required by IT Department, can I correct the details proactively from my side so as to avoid any IT notice? Kindly advice. [bharatdube@gmail.com]

Opinion:

Income tax return forms requires not only details of income but also various other details. One needs to be very cautious while filing income tax return as furnishing inaccurate information or false information carries penal consequences. The funny part, leaving column blank could also be penalizing. Error & mistake are often the results of new changes in the forms ignored while filing income tax returns.  Some of the important changes in the current year form includes:  

1.      Reporting of cash deposits during demonetization period in saving & current bank accounts if it exceeds Rs. 2 Lakh.

2.      All bank accounts of the taxpayers.

3.      Aadhar Card & Passport Number

4.      Taxpayer whose income exceeds Rs 50 lakh per annum had to file a declaration of assets & liabilities.

Error in income tax return form can be corrected by filing a revised return. Earlier, revision option was available only if the original return was filed within due date i.e., revised return filing option was not available in case original return is filed after due date. However, the law has now been amended from AY 2017-18 so as to allow the filing of revised return even if the original return is filed belatedly i.e., after the due date. Now, return filed belatedly can also be revised.

There is no restriction on the number of times a return could be revised. Once a revised return is filed [u/s 139(5)], the original return [U/s 139(1)] is supplanted by the revised return as a result of amendment made in the original return as effected by the revised return. A revised return supplants the original returns by effecting a revision therein [Niranjan Lal Ram Chandra vs. CIT (1982) 134 ITR 352]. However, the facility should be used sparingly as it may increase the chances of return being selected for scrutiny. It is always in the interest of taxpayer to file your original I-T return with utmost care, avoiding the chances of any error or omission. One can however still use the opportunity provided by law to rectify mistakes in your return, if any, before it is too late.

How to file a revised return? 
For filing the revised return, taxpayer is quote the acknowledgement number and the date of filing of the original return in the revised form. If anyone is filing a revised return more than once then at first and every subsequent revision, acknowledgement number and the date of filing relating to the original return only is required to be filled.

Query 2]

1.      My Daughter is a staff working in the Government  of Maharashtra’s Hospital at Mumbai and falls under 10% Income Tax bracket. For the FY 2016-17, they have not given the Form No. 16 till date and she has not filed the IT return. On enquiry, it is informed that it is in process. They are citing the reason of staff shortage for correction in the TDS.  Will the IT department take up the matter with the hospital authorities to rectify the mistakes? I would like to know through your good self whether there is any deadline for issue of Form No. 16 and any provision for sending the Form No. 16 by post to the employee? Kindly also let me know the course of action to be taken by the undersigned / my daughter to set right the things. Whom shall I approach?

2.      In the financial year 2015-16, the Hospital authorities deducted TDS of Rs. 4,000/- and given Form No. 16 also.  Accordingly, she filed the IT return claiming Rs. 800/- as refund.  Unfortunately, few days later the IT department from Bangalore sent  her a notice that no remittance were done by your employer and take up the matter with them for correction and re-submit the IT return. She has taken up the matter with the DDO of the Hospital and asked for ‘Traces Form No. 16” but till date the hospital authorities neither given the same nor corrected the mistake and it is still pending.  [T.Varkey - pvthomas_57@rediffmail.com]

Opinion:
First part:

Tax Deduction at Source (TDS) is one of the main sources for the Government in widening tax base & ensuring regular inflows of taxes. Despite so many awareness & penal consequences, there are still numerous instances of non compliance. Without payment of tax & quarterly filing of TDS by the Deductor, TDS amount would not get reflected in the 26AS statement of the deductee & results in denial of legitimate tax credit. Deductee are in a fix when the payer deducts tax but doesn’t deposit it or after deposits either doesn’t file TDS return or file it erroneously without correctly mentioning the details of deductee. This is the most common grievance that is faced by many deductees across the country. The problem arises not only at the time of claiming tax credit but also arises at the time of e-filing of return.
The person deducting the tax at source is duty bound to:

a.      Deposit the amount of Tax Deducted at Source (TDS) within prescribed time in the Government Treasury.

b.      File the Quarterly TDS return within a prescribed time.

c.      Issue the TDS Certificate to the Deductee within a prescribed time.

There is a penalty on deductor for non compliance with each & every obligation mentioned above. More importantly

i.                    Non filing of TDS Return within prescribed time attracts a fine of Rs. 100/- per day, subject to maximum of TDS amount [u/s 272A(2)(k)].

ii.                 Mandatory late filing fee of Rs. 200/- per day subject to maximum of TDS amount, is also leviable u/s 234E.

iii.               Penalty of Rs. 10,000/- to Rs. 1,00,000/- is there for non filing or inaccurate filing of TDS return [u/s 271H].

iv.               Non issuance of TDS Certificate within a prescribed time attracts penalty u/s 272A (2) (g) @ Rs. 100/- per day, subject to maximum of TDS amount, during which the failure continues

In your case, you have already approached the deductor for issuance of TDS certificate. However, you are not able to get it so far. You can adopt following sequential approach:

i.                    Write a letter to the Deductor incorporating:
a] The details of payments done and the tax deducted thereon.
b] Provision of Section 203 read with rule 31 which requires the employer to issue TDS certificate by 31^st May.

ii.                 Keep the proof of letter issued to the Deductor

iii.               If despite this the certificate from TRACES is not issued, write a letter to Joint Commissioner or Addl. CIT of TDS wing who has jurisdiction over the employer (Mumbai in your case) mentioning the detailed facts elaborated above.

Readers may note that TDS wing of Income Tax department is working pro actively and very rigorously initiating the penal proceeding against the defaulters who are illegally withholding the amount of TDS thereby causing hassles to the deductee.

Second part:

There is an important instructions issued by CBDT for grant of TDS credit to the deductee even if the same is not deposited by the deductor. The copy of the same is re-produced hereunder for the benefit of masses:
“Instructions No. 275/29/2014-IT-(B), dtd.1-6-2015
1. Grievances have been received by the Board from many taxpayers that in their cases the deductor has deducted tax at source from payments made to them in accordance with the provisions of Chapter – XVII of the Income Tax Act, 1961 but has failed to deposit the same into the Government account leading to denial of credit of such deduction of tax to theses tax payers and consequent raising of demand.
2. As per section 199 of the Act credit of TDS is given to the person only if it is paid to the central Government Account. However, as per section 205 of the Act, the assessee shall not be called upon to pay the tax to the extent tax has been deducted from his income where the tax is deductible at source under the provision of Chapter- XVII. Thus, the Act puts a bar on direct demand against the assessee in such cases and the demand on account of tax credit mismatch cannot be enforced coercively.
3. This may be brought to the notice of all the Assessing Officers in your region so that if the facts of the cases so justify, the assessee are not put at any inconvenience on account of default of deposit of tax into the Government account by the deductor.
4. This issues with the approval of Chairperson, CBDT.”

[The author is a practicing Chartered Accountant from Nagpur. Readers may send their direct tax related queries at

SSRPN & Co

10, Laxmi Vyankatesh Apartment

C.A. Road, Telephone Exch. Square

Nagpur-440008

or email it at nareshjakhotia@ssrpn.com]