Extension in Due Date of Filing ITR- Finance Bill Amends Section 139

Extension of due date of filing ITR for spouses of a partner to whom section 5A of the Act applies: -

Section 5A of the Income Tax Act provides for taxation of spouses governed by Portugese Civil Code. Any income earned by a partner of a firm whose accounts are required to be audited shall be apportioned between the spouses, if section 5A is applicable to them.

As we are all aware that the due date of filing original ITR in case of partners of a firm whose accounts are audited is 31^st October of the assessment year. However, the benefit of such extended due date was not available to spouses of such partners to whom section 5A of the Act applies. Therefore, Finance Bill 2021 has proposed to extend due date of filing ITR to 31^st October in case of spouse of a partner of a firm whose accounts are required to be audited, if the provisions of section- 5A are applicable to them.

Extension of due date of ITR for partners of a firm subject to transfer pricing audit u/s 92E

In case of a firm which is required to furnish a report from an accountant for entering into an international transaction or specified domestic transaction (Transfer Pricing Audit) under section 92E of the Income Tax Act, the due date of filing original ITR is 30^th November of the assessment year. Since, the total Income of partners of such firms can be determined only after the books of accounts of such firms have been finalized, Finance Bill 2021 has proposed to extend due date of filing of original ITR of such partners to 30^th November of the assessment year.

Time limit for revised return/ belated return revised

Section-139(4) of the Income Tax Act prescribes the time limit for filing of belated return. Further, Section 139(5) of the Act prescribes the time limit within which the assessee may revise the return. According to these sections, the belated and revised returns could be filed before the end of the assessment year or before the completion of the assessment, whichever is earlier.

Finance Bill, 2021 has proposed to reduce the above time limit of filing belated or revised returns by a period of 3 months. Accordingly, the belated or revised return could be filed now up to 3 months before the end of the assessment year or before the completion of the assessment, whichever is earlier.

Amendment in provisions of defective returns- Section 139(9) amended

Section 139(9) of the Income Tax Act provides that in case a return of income is found to be defective, the A.O. will intimate the defect to the assessee and give him a period of 15 days or more to rectify the said defect. If the defect is not rectified within 15 days, the return is treated as invalid return. The explanation to section 139(9) prescribes the conditions in which a certain return of income shall be treated as defective.

Owing to difficulties faced by taxpayers and department on account of large number of defective returns, the government has proposed relaxations in those conditions as prescribed in the explanation to this section.

Therefore, a proviso has been inserted as below to the said explanation which empowers the CBDT to specify the conditions which shall not apply for a class of assessee or shall apply with modifications. 

The proposed proviso in explanation to section 139(9) reads as below: -

“Provided that the Board may, by notification in the official gazette, specify that any of the conditions specified in clause (a) to (f) to the explanation shall not apply to such class of assesses or shall apply with such modifications, as may be specified in such notification.”