basic provision of income tax act 1961(‘act) which creates the obligation to file the return of...

Basic provision of income tax act 1961(‘ACT)

Which creates the obligation to file the return of income.

CA Vaibhav Bajaj LEVEL 1

Who is liable to furnish returns of income?

Section 139(1) requires every person to furnish return –

if his total income or the total income of any other person in respect of which he is assessable under the Income Tax Act during the previous year, exceeds the maximum amount which is not chargeable to income-tax.(exceeds the general exemption limit, as per the slab rates) and

Every company or firm(co. or firm has file the return in any case whether there is loss, co. is defunct ,working or not)


Ignorance of statutory duty provides no excuse to an assessee who is liable to make return under section 139(1) (Kumar Purnendu Nath Tagore v ITO, (1973)]


The following persons are under statutory obligation to file return of income by virtue of section 139(1)

Tax payer Minimum income to attract the provisions of

filing return of income

Company [sec. 139(1)] Any income or loss(i.e.in any case, filing of ITR is mandatory)

A person other than a company [sec. 139(1)]

Income in excess of the amount not chargeable to tax (i.e., the amount of exempted slab)


first proviso to section 139(1) A person (other than a company, political party or charitable trust)

[not furnishing return under section 139(1), i.e., when income is less than the exemption limit] and residing in a specified area shall submit his return of income in Form 2C if he fulfils any one of the following conditions at any time during the previous year —

a. ownership/lease of a motor vehicle

b. occupation of any category or categories of immovable property as may be specified by the Board by notification whether by way of ownership or tenancy or otherwise ; or


c. incurred expenditure on himself or any other person on travel to a foreign country other than Bangladesh, Bhutan, Maldives, Nepal, Pakistan or Sri Lanka (not being travel to Saudi Arabia for Haj or travel to China on pilgrimage to Kailash Mansarover) ; or

d. subscription of a cellular telephone (not being a wireless in local loop telephone) ; or

e. holder of a credit card (not being an “add-on” card or not being a Kisan Credit Cards issued by a bank or an institution ; or

f. member of a club where entrance fees charged is Rs. 25,000 or more.


The above provisions shall not apply to such persons as are notified by the Government. The Government has specified that the above provision is not applicable in the case of a non-resident. Moreover, an individual who is at least 65 years of age and not engaged in any business/profession is not subject to condition (b) or (d) supra.


Different situations Due date

1. Where the assessee is a company October 31

2. Where the assessee is a person other than a company:

2.1Where accounts of the assessee are required to be audited under any law

October 31

2.2 Where the assessee is a “working partner” in a firm whose accounts are required to be audited under any law

October 31

2.3 Where the assessee is covered by the first proviso to section 139(1)

October 31

2.4 In any other case

2.5 Case where assessee is required to furnish a report u/s 92E :

July 31

November 30


Section 142(1) of the Income Tax Act, 1961, provides for issuance of notice to the assessee for filing of return if the same has not been submitted earlier.

Non-filing of returns can be of two forms: -

1. Non-filing in cases where returns were being filed in the past i.e. stop filers

2. Cases where returns are not filed at all

interest u/s 234A Penalty of Rs.5000 loss can not be carried forward Prosecution can be done. Assessment u/s 144 can be done.(Ex _ parte assessment)CA Vaibhav Bajaj LEVEL 1

Cases falling in the first category can be detected from the Blue Book maintained with the assessing officer. In all cases where a return of the assessee is received for the first time as well as cases of transfer of jurisdiction, the name of the assessee concerned is to be entered in the Blue Book maintained by each assessing officer. This register also keeps a track of returns filed every year by the assessee


Cases falling under the second category could be detected by a process of integration of records held with various statutory bodies such as the Central Information Branch of the income tax department, TDS wards, Registering authorities, and banks. Quoting of PAN has now been made compulsory in the case of most of the transactions entered into by all persons


basic provision of income tax act 1961(‘act) which creates the obligation to file the return of...

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