CHAPTER 10: PROVISIONS FOR FILING RETURN OF INCOME AND SELF

ASSESSMENT

➢ CHAPTER OVERVIEW

Interest and Other

fee for default Provisions
Filing of in furnishing Permanent
Return of return of Account Number

income income [Section 139A]

Compulsory
filing of Return
Interest for
of Income
default in Quoting of
[Section 139(1)] furnishing Aadhar Number
return of
income [Section 139AA]

Return of loss [Section 234A]

[Section 139(3)]
Submission of
return through
Tax Return
Belated Return Prepares
[Section 139(4)] [Section 139B]
Fee for default
in furnishing
return of Person
Revised Return income authorised to
verify return of
[Section 139(5)] [Section 234F]
income

[Section 140]

Defective Return
Self- Assessment
[Section 139(9)]
[Section 140A]

1
 SECTION 139(1): COMPULSORY FILING OF RETURN OF INCOME

1. As per section 139(1), it is compulsory for companies and firms to file return a return of
income or loss for every previous year on or before the due date in the prescribed form.

2. In case of person other than a company or firm, filing of return of income on or before the
due date is mandatory, if his total income or the total income of any other person in respect
of which he is assessable under this act during the previous year exceeds the basic
exemption limit.

3. Every person, being a resident other than not ordinarily resident in India within the meaning
of section 6(6), who is not required to furnish a return u/s 139(1), would be required to file a
return of income or loss for the previous year in the prescribed form and verified in the
prescribed manner on or before the due date, if such person, at any time during the
previous year, -
a) Holds, as a beneficial owner or otherwise, any asset (including any financial interest
in any entity) located outside India or has a signing authority in any account located
outside India; or
b) is a beneficiary of any asset (including any financial interest in any entity) located
outside India.
However, an individual being a beneficiary of any asset (including any financial
interest in any entity) located outside India would not be required to file return of
income under the fourth proviso to section 139(1), where, income, if any, arising
from such asset is includible in the income of the person referred to in (a) above in
accordance with the provision of the I.T. Act, 1961.
Beneficial Owner: An individual, who has provided, directly or indirectly,
consideration for the asset of the immediate or future benefit, direct or indirect, of
himself or any other person.
Beneficiary: 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.

4. Further, every person, being an individual or a HUF or an AOP or BOI or an artificial judicial
person:-
• Whose total income or the total income of any other person in respect of which he is
assessable under this act during the previous year
• Without giving effect to the provisions of chapter VI-A or section
54/54B/54D/54EC/54F
• exceeded the basic exemption limit.

is required to file a return of his income or income of such other person on or before the
due date in the prescribed form and manner and setting for the prescribed particulars.

2
 The basic exemption limit is Rs. 2,50,000 for individuals/HUF/AOPs/BOIs and artificial
judicial persons, Rs. 3,00,000 for the resident individuals of the age of 60 years but less than
80 years and Rs.5,00,00 for resident individuals of the age of 80 years or more at any time
during the previous year. These amounts denote the level of total income, which is arrived
at after claiming the admissible deductions under chapter VI-A. However, the level of total
income to be considered for the purpose of filing return of income is the income before
claiming the admissible deductions under chapter VI-A and exemption under section
54/54B/54D/54EC or 54F.

5. Any person other than a company or a firm, who is not required to furnish a return u/s
139(1), is required to file income tax return in the prescribed form and manner on or before
the due date if, during the previous year, such person-
(a) has deposited an amount or aggregate of the amounts exceeding Rs. 1 crore in one
or more current accounts maintained with a banking company or a co-operative
bank; or
(b) has incurred expenditure of an amount or aggregate of the amounts exceeding Rs. 2
lakhs 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 Rs. 1
lakh towards consumption of electricity; or
(d) fulfils such other prescribed conditions

6. All such person mentioned in (1) to (5) above should, on or before the due date, furnish a
return of his income or the income of such other person during the previous year in the
prescribed form and verified in the prescribed manner and setting forth such other
particulars as may be prescribed.

Meaning of Due dates:

'Due Date' means-

(i) 31st October of the assessment year, where the assessee, other than an assessee
referred to in (ii) below, is-
• a company,
• a person (other than a company) whose accounts are required to be audited
under the Income tax act, 1961 or any other law in force; or
• a partner of a firm whose accounts are required to be audited under the
Income tax Act, 1961 or any other law for the time being in force.
th
(ii) 30 November of the assessment year, in the case of an assessee who is required to
furnish a report referred to in section 92E.
(iii) 31st July of the assessment year, in any other case of any other assessee.

3
 Question 1.

Paras aged 55 years is resident of India. During the FY 2020-21, interest of Rs. 2,88,000 was
credited to his Non-resident (External) account with SBI. Rs. 30,000, being interest on fixed
deposit with SBI, was credited to his saving bank account during this period. He also earned
Rs. 3,000 as interest on this saving account. Is Paras required to file return of income?

What will be your answer, if he has incurred Rs. 3 lakhs as travel expenditure of self and
spouse to US to stay with his married daughter for some time?

Solution:

An individual is required to furnish a return of income u/s 139(1) of his total income, before
giving effect to the deduction under chapter VI-A or exemption under section or section
54/54B/54D/54EC or 54F, exceeds the maximum amount not chargeable to tax i.e. 2,50,00
(for AY 2021-22).

Computation of total income of Mr. Paras for AY 2021-22

Particulars Amount
(Rs.)
Income from other sources
Interest earned from Non-resident (external) account Rs. 2,88,000 [exempt u/s Nil
10(4)(ii), assuming that Mr. Paras has been permitted by RBI to maintain the
aforesaid account]
Interest on fixed deposit with SBI 30,000
Interest on saving bank account 3,000
Gross total income 33,000
Less: deduction u/s 80TTA 3,000
Total income 30,000
Since the total income of Mr. Paras for AY 2021-22, before giving effect to the deduction
under chapter VI-A, is less than the basic exemption limit of Rs. 2,50,000, he is not required
to file return of income for AY 2021-22.
If he has incurred expenditure of Rs. 3 lakhs on foreign travel of self and spouse, he has to
mandatorily file his return of income on or before the due date under section 139(1).

SECTION 234A: INTEREST FOR DEFAULT IN FURNISHING RETURN OF INCOME

1) Interest u/s 234A is attracted for failure to file return of income on or before due date u/s
139(1) i.e., interest is payable where an assessee furnishes the return of income after the
due date or does not furnish the return of income.
2) Simple interest at 1% per month or part of the month is payable for the period commencing
from the date immediately following the due date and ending on the following dates-
Circumstances Ending on the following dates
Where the return is furnished after due date The date of furnishing of the return
Where no return is furnished The date of completion of assessment

4
3) The interest has to be calculated on the amount of tax on total income as determined u/s
143(1) or on regular assessment as reduced by the advance tax paid and any tax deducted
or collected at source, any relief of tax allowed under section 89and any tax credit allowed
to be set-off in accordance with section 115JD.
4) No interest u/s 234A shall be charged on self-assessment tax paid by the assessee on or
before the due date of filing return.
5) The interest payable u/s 234A shall be reduced by the interest, if any, paid on self-
assessment u/s 140A towards interest chargeable u/s 234A.

SECTION 234F: FEE FOR DEFAULT IN FURNISHING RETURN OF INCOME

Where a person, who is required to furnish a return of income u/s 139(1) fails to do so
within the prescribed limit u/s 139(1), he shall, pay, by way of fee, sum of-

Fee Circumstances
Rs. 5,000 If the return is furnished on or before the 31st December of the assessment
year.
Rs. 10,000 In any other case
However, if the total income of the person does not exceed Rs. 5 lakhs, the fees payable
shall not exceed Rs. 1,000.

SECTION 139(1C): SPECIFIED CLASS OR CLASSES OF PERSONS TO BE EXEMPTED FROM

FILING RETURN OF INCOME

(1) Every person who falls within the ambit of the conditions mentioned under section 139 has
to furnish a return of his income on or before the due date specified under section 139(1).

(2) For reducing the compliance burden of small taxpayers, the Central Government has been
empowered to notify the class or classes of persons who will be exempted from the
requirement of filing of return of income, subject to satisfying the prescribed conditions.

(3) Every notification issued under section 139(1C) shall, as soon as may be after its issue, be
laid before each House of Parliament while it is in session, for a total period of thirty days. If
both Houses agree in making any modification in the notification, the notification will
thereafter have effect only in such modified form. If both Houses agree that the notification
should not be issued, the notification shall thereafter have no effect.

SECTION 139(3): RETURN OF LOSS

1) This section requires the assessee to file a return of loss in the same manner as in the case
of return of income within the time allowed u/s 139(1).

5
2) Section 80 requires mandatory filing of return of loss u/s 139(3) on or before the due date
specified u/s 139(1) for carry forward of the following:
a) Business loss u/s 72(1)
b) Speculation business loss u/s 73(2)
c) Loss from specified business u/s 73A(2)
d) Loss under the head "Capital gain" u/s 74(1)
e) Loss from the activity of owning and maintaining race horses u/s 74A(3)

3) Consequently, section 139(3) requires filing of return of loss mandatorily within the time
allowed u/s 139(1) for claiming carry forward of the losses mentioned in (2) above.

4) However, loss under the head "Income from house property" u/s 71B and unabsorbed
depreciation u/s 32 can be carried forward for set off even though return of loss has not
been filed before the due date.

5) A return of loss has to be filed by the assessee in his own interest and the non-receipt of a
notice from the Assessing officer requiring him to file the return cannot be valid excuse
under any circumstances for the non-filing of such return.

SECTION 139(4): BELATED RETURN

Any person who has not furnished a return within the time allowed to him u/s 139(1) may
furnish the return for any previous year at any time-

• before the end of the relevant assessment year or

• before the completion of the assessment,

Whichever is earlier.

SECTION 139(5): REVISED RETURN

If any person having furnished a return u/s 139(1) or a belated return u/s 139(4), discover
any omission or any wrong statement therein, he may furnish a revised return at any time-

• before the end of the relevant assessment year; or

• before completion of assessment

Whichever is earlier.

Question 2

Explain with brief reasons whether the return of income can be revised u/s 139(5) of the
Act, in the following cases:

i. Belated return u/s 139(4)

6
 ii. Return already revised once u/s 139(5)
iii. Return of loss filed u/s 139(3)

Answer:

Any person who has furnished a return u/s 139(1) or 139(4) can file a revised return at any
time before the end of the relevant assessment year or before the completion of
assessment, whichever is earlier, if he discovers any omission or any wrong statement in the
return filed earlier. Accordingly,

i. A belated return filed u/s 139(4) can be revised.

ii. A return revised earlier can be revised again as the first revised return replaces the
original return. Therefore, if the assessee discover any omission or wrong statement in
such a revised return, he can furnish a second revised return within the prescribed
time i.e, within the end of the relevant assessment year or before the completion of
assessment, whichever is earlier.
iii. A return of loss filed u/s 139(3) is deemed to be return filed u/s 139(1), and, therefore,
can be revised u/s 139(5).

SECTION 139(6): PARTICULARS TO BE FURNISHED WITH THE RETURN

The prescribed form of the return shall, in certain specified cases, require the assessee to
furnish the particulars of-
i. income exempt from tax;
ii. assets of the prescribed nature and value, held by him as a beneficial owner or
otherwise or in which he is a beneficiary;
iii. his bank account and credit card held by him;
iv. expenditure exceeding the prescribed limits incurred by him under prescribed heads;
and
v. such other outgoings as may be prescribed.

SECTION 139(6A): PARTICULARS TO BE FURNISHED WITH RETURN OF INCOME IN THE CASE

OF AN ASSESSEE ENGAGED IN BUSINESS OR PROFESSION

The prescribed form of the return shall, in the case of an assessee engaged in any business
or profession, also require him to furnish-
i. the report of any audit referred to in section 44AB
ii. the particulars of the location and style of the principal place where he carries on the
business or profession and all the branches thereof.
iii. the names and address of his partners, if any, in such business or profession,
iv. if he is a member of an association or body of individuals,
• the names of the other members of the association or the body of individuals; and

7
 • the extent of the shares of the assessee and the shares of all such partners or
members, as the case may be, in the profits of the business or profession.

SECTION 139(9): DEFECTIVE RETURN

1. Under this section, the Assessing officer has the power to call upon the assessee to rectify a
defective return.
2. Where the Assessing officer consider that the return of income furnished by the assessee is
defective, he may intimate the defect to the assessee and give him an opportunity to rectify
the defect within a period of 15 days from the date of such intimation. The assessing officer
has the discretion to extend the time period beyond 15 days, on an application made by the
assessee.
3. If the defect is not rectified within the period of 15 days or such further extended period,
then the return would be treated as an invalid return. The consequential effect would be
the same as if the assessee had failed to furnish the return.
4. Where, however, the assessee rectifies the defect after the expiry of the period of 15 days
or the further extended period, but before assessment is made, the Assessing Officer can
condone the delay and treat the return as a valid return.
5. A return of income shall be regarded as defective unless all the following conditions are
fulfilled, namely:
a) The annexures, statements and columns in the return of income relating to computation of
income chargeable under each head of income, computations of gross total income and
total income have been duly filed in.
b) The return of income is accompanied by the following, namely:
• a statement showing the computation of the tax payable on the basis of the return.
• the report of the audit obtained u/s 44AB (If such report has been furnished prior to
furnishing the return of income, a copy of such report and the proof of furnishing the
report should be attached).
• the proof regarding the tax, if any, claimed to have been deducted or collected at
source and the advance tax and tax on self- assessment, if any, claimed to have been
paid. (However, the return will not be regarded as defective if (a) a certificate for tax
deducted or collected was not furnished u/s 203 or section 206C to the person
furnishing his return of income, (b) such certificate is produced within a period of 2
years).
• the proof of the amount of compulsory deposit, if any, claimed to have been paid
under the compulsory Deposit Scheme (Income tax payers) Act,1974;
c) Where regular books of account are maintained by an assessee, the return of income is
accompanied by the following-
i. copies of manufacturing account, trading account, profit and loss account or income
and expenditure account, or any other similar account and balance sheet;
ii. the personal accounts as detailed below-

8
 (1) Proprietary business or The personal account of the proprietary
profession
(2) Firm, association of person or Personal accounts of partners or members
body of individuals
(3) Partner or member of a firm, Partner's personal account in firm member's
association of persons or body personal account in the association of
of individuals persons or body of individuals

d) Where the accounts of the assessee have been audited, the return should be accompanied
by copies of the audited profit and loss account and balance sheet and the auditor’s report.
e) Where the cost accountants of an assessee have been audited u/s 148 of Companies Act,
2013, the return should be accompanied by such report.
f) Where regular books of account are not maintained by the assessee, the return should be
accompanied by-
(i) A Statement indicating –
(1) The amount of turnover or gross receipt
(2) Gross profit
(3) Expenses; and
(4) Net profit
Of the business or profession
(ii) The basis on which such amounts mentioned in (1) above have been computed,
(iii) The amounts of total sundry debtors, sundry creditors, stock in trade and cash
balance as at the end of the previous year.

SECTION 139A: PERMANENT ACCOUNT NUMBER

(1) Sub section (1) requires the following persons, who have not been allotted a permanent
account number, to apply to the assessing officer within the prescribed time for the
allotment of a PAN-
(i) Every person whose total income of any other person in respect of which he is
assessable under this act during any previous year exceeded the basic exemption
limit; (on or before 31st May of the assessment year for which such income is
assessable) or
(ii) Every person carrying on any business or profession whose total sales, turnover or
gross receipt exceeds or is likely to exceed Rs. 5 lakhs in any previous year; (Before
the end of that financial year) or;
(iii) Every person, being a resident, other than an individual, which enters into a
financial transaction of an amount aggregating to Rs. 2,50,000 or more in a financial
year. (On or before 31st May of the immediately following financial year)
(iv) Every person who is the managing director, director, partner, trustee, author,
founder, karta, chief executive officer, principal officer or office bearer of the
person mentioned in (iii) above or any person competent to act on behalf of such

9
 person. (On or before 31st May of the following financial year in which the person
referred in (iii) enters into financial transaction specified therein)
(2) The central government is empowered to specify, by notification in the official gazette, any
class or classes of persons by whom tax is payable under the Act or any tax or any duty is
payable under any other law for the time being in force. Such persons are required to apply
within such time as may be mentioned in that notification to the assessing officer for the
allotment of a PAN [sub section (1A)].
(3) For the purpose of collecting any information which may be useful for or relevant to the
purpose of the Act, the Central Government may notify any class or classes of persons, and
such persons shall within the prescribed time, apply to the Assessing officer for allotment of
a PAN [ sub section (1B)]
(4) The assessing officer, having regard to the nature of transactions as may be prescribed, may
also allot a PAN to any other person (whether any tax is payable by him or not) in the
manner and in accordance with the procedure as may be prescribed [sub section (2)].
(5) Any person, other than the persons mentioned in (1) or (4) above, may apply to the
assessing officer for the allotment of a PAN and the assessing officer shall allot a PAN to
such person immediately.
(6) Such PAN comprises of 10 alphanumeric characters.
(7) Quoting of PAN is mandatory in all documents pertaining to the following prescribed
transactions:
(a) In all returns to, or correspondence with, any income tax authority;
(b) In all challans for the payment of any sum due under the Act;
(c) In all documents pertaining to such transactions entered into by him, as may be
prescribed by the CBDT in the interest of revenue. In this connection, CBDT has notified
the following transactions, namely [Rule 114B]:
Sr Nature of transaction Value of transaction
No
1. Sale or purchase of motor vehicle or vehicle, as All such transactions
defined in the Motor Vehicles Act, 1988 which
requires registration by a registering authority
under that act, other than two wheeled vehicles.
2. Opening an account [other than a time deposit to All such transactions
at SI. No. 12 and a Basic savings bank deposit
account] with a banking company or a co-operative
bank to which banking regulation act, 1949 applies
(including any bank or banking institution referred
to in section 51 of that act.)
3. Making an application to banking company or a co- All such transactions
operative bank to which the Banking Regulation
Act, 1949 applies (including any bank or banking
institution referred to in section 5 of that act) or to
any other company or institution, for issue of a
credit or debit card

10
Sr Nature of transaction Value of transaction
No
4. Opening of a demat account with a depository, All such transactions
participant, custodian of securities or any other
person registered u/s 12(1A) of the SEBI Act, 1992.
5. Payment to a hotel or restaurant against a bill or Payment in cash of an
bills at any one time. amount exceeding Rs.
50,000
6. Payment in connection with travel or any foreign Payment in cash of an
country or payment for purchase of any foreign amount exceeding Rs.
currency at any one time 50,000
7. Payment to mutual fund for purchase of its units Amount exceeding Rs.
50,000
8. Payment to a company or institution for acquiring Amount exceeding Rs.
debentures or bonds issued by it. 50,000
9. Payment to Reserve Bank of India for acquiring Amount exceeding Rs.
bonds issued by it. 50,000
10. Deposits with a banking company or co-operative Cash deposits exceeding Rs.
to which the Banking Regulation Act, 1949 applies 50,000 during any one day.
(including any bank or banking institution referred
to in section 51 of that Act); or post office
11. Purchase of bank drafts or pay orders or banker’s Payment in cash of an
cheque from a banking company or co-operative to amount exceeding Rs.
which the Banking Regulation Act, 1949 applies 50,000 during any one day.
(including any bank or banking institution referred
to in section 51 of that Act)
12. A time deposit with,- Amount exceeding Rs.
(i) a banking company or co-operative to which 50,000 or aggregating to
the Banking Regulation Act, 1949 applies more than Rs. 5 lakhs during
(including any bank or banking institution a financial year.
referred to in section 51 of that Act)
(ii) Post office;
(iii) A Nidhi referred to in section 406 of the
Companies Act,2013; or
(iv) A non-banking financial company which holds
a certificate of registration u/s 45-IA of the
Reserve Bank of India Act, 1934, to hold or
accept deposit from public.
13. Payment for one or more pre-paid instruments, as Payment in cash or by way
defined in the policy guideline for issuance and of a bank draft or pay order
operation of pre-paid payment instruments issued or banker’s cheque of an
by Reserve Bank of India under the payment and amount aggregating to more
settlement system act,2007, to a banking company than Rs. 50,000 in a financial
or co-operative to which the Banking Regulation year.
Act, 1949 applies (including any bank or banking
institution referred to in section 51 of that Act) or
to any other company or intuition

11
 Sr Nature of transaction Value of transaction
No
14. Payment as life insurance premium to an insurer as Amount aggregating to
defined in Insurance Act, 1938. more than Rs. 50,000 in a
financial year.
15. A contract for sale or purchase of Securities (other Amount exceeding Rs. 1 lakh
than shares) as defined in section 2(h) of the per transaction
Securities Contracts (Regulation) Act,1956.
16. Sale or purchase, by any person, of shares of a Amount exceeding Rs. 1 lakh
company not listed in a recognised stock exchange. per transaction
17. Sale or purchase of any immovable property Amount exceeding Rs. 10
lakh or valued by stamp
valuation authority referred
to in section 50C at an
amount exceeding Rs. 10
lakhs
18. Sale or purchase, by any person, of goods or Amount exceeding Rs. 2
services of any nature other than those specified at lakhs per transaction.
SI. No.1 to 17 of this table, if any.

Minor to quote PAN of parent or guardian

Where a person, entering into any transaction referred to in this rule, is a minor and
who does not have any income chargeable to income-tax, he shall quote the PAN of his
father or mother or guardian, as the case may be, in the document pertaining to the
said transaction.
Declaration by a person not having PAN
Further, any person who does not have a PAN and who enters into any transaction
specified in this rule, shall make a declaration in form no. 60 giving therein the
particulars of such transaction either in paper form or electronically under the
electronic verification code in accordance with the procedures, data structures, and
standard specified by the Principal Director General of Income tax (system) or Director
General of Income tax (systems).
Non- applicability of Rule 114B
Also, the provisions of this rule shall not apply to the following class or classes of
persons, namely: -
(i) the central government, the state governments and consular offices;
(ii) the non-residents referred to in section 2(30) in respect of the transactions other than a
transaction referred to at SI. No.1 or 2 or 4 or 7 or 8 or 10 or 12 or 14or 15 or 16 or 17
of the table.

12
 Meaning of certain phrases:

Sr Phrase Inclusion
No.
1. Payment in Payment towards fare, or to a travel agent or a tour operator, or to
connection an authorized person as defined in section 2(c) of the Foreign
with travel Exchange Management Act, 1999
2. Travel agent or A person who makes arrangements for air, surface or maritime
tour operator travel or provides services relating to accommodation, tours,
entertainment, passport, visa, foreign exchange, travel related
insurance or other travel related services either severally or in
package
3. Time Deposit Any deposit which is repayable on the expiry of a fixed period.

(8) Every person who receives any document relating to any transaction cited above shall
ensure that the PAN or General index register number or the Aadhar number is duly quoted
in the document.
(9) If there is change in the address or in the name and nature of the business of a person, on
the basis of which PAN was allotted to him, he should intimate such change to the Assessing
Officer.

Intimation of PAN to person deducting tax at source

Every person who receives any amount from which tax has been deducted at source shall
intimate his PAN to the person responsible for deducting such tax. [sub section (5A)].
Similarly, every buyer or licensee or lessee referred to in section 206C shall intimate his
PAN to the person responsible for collecting such tax [Sub- section (5C)]

Quoting of PAN in certain documents

Where any amount has been paid after deducting tax at source, the person deducting tax
shall quote the PAN of the person to whom the amount was paid in the following
documents:
• in the statement furnished u/s 192(2C) giving particulars of perquisites or profits in
lieu of salary provided to any employee;
• in all certificate for tax deducted issued to the person to whom payment is made;
• in all returns made to the prescribed income tax authority u/s 206;
• in all statements prepared and delivered or caused to be delivered in accordance
with provisions of section 200(3) [sub section 5B].

Also, every person collecting tax in accordance with the provisions of section 206C
shall quote PAN of every buyer or licensee or lessee in the following documents:

(i) in all certificates issued for tax collected in accordance with the provisions of section
206C(5);

13
 (ii) in all returns prepared and delivered or caused to be delivered to any income-tax
authority in accordance with the provisions of section 206C(5A)/(5B);
(iii) in all statements prepared and delivered or caused to be delivered in accordance
with the provisions of section 206C(3) [Sub-section (5D)].

Requirement to intimate PAN and quote PAN not to apply to certain persons

The above sub section (5A) and (5B) shall not apply to a person who-

• does not have taxable income or

• who is not required to obtain PAN

if such person furnishes a declaration u/s 197A in the prescribed form and manner that the
tax on his estimated total income for that previous year will be Nil.

Inter- changeability of PAN with the Aadhaar Number

Every person who is required to furnish or intimate or quote his PAN may furnish or
intimate or quote his Aadhar Number in lieu of the PAN, if he

- has not been allotted a PAN but possesses the Aadhar number
- has been allotted a PAN and has intimated his Aadhar number to prescribed
authority in accordance with the requirement contained in section 139AA(2).

PAN would be allotted in prescribed manner to a person who has not been allotted a PAN
but possesses Aadhar number.

Accordingly, the CBDT has, vide Notification No. 59/2019, dated 30.8.2019, provide that any
person, who has not been allotted a PAN but possesses the Aadhaar number and has
furnished or intimated or quoted his Aadhaar number in lieu of the PAN, shall be deemed to
have applied for allotment of PAN and he shall not be required to apply or submit any
documents.

Further, any person, who has not been allotted a PAN but possesses the Aadhaar number
may apply for allotment of the PAN under section 139A(1)/(1A)/(3) by intimating his
Aadhaar number and he shall not be required to apply or submit any documents.

Quoting and authentication of PAN or Aadhar number

(a) Every person entering into such prescribed transactions is required to quote his PAN
or Aadhar number, as the case may be, in the documents pertaining to such
transactions and also authenticate such PAN or Aadhar number in the prescribed
manner.
(b) Every person receiving such document relating to transactions referred to in (a)has
to ensure that PAN or Aadhar number has been duly quoted in such document and
also ensure that such PAN or Aadhar number is so authenticated.

14
 Power to make rules

The CBDT is empowered to make rules with regard to the following:

a) the form and manner in which an application for PAN may be made and particulars
to be given there;
b) the categories of transactions in relation to which PAN or the General Index Register
Number or the Aadhar number, as the case may be, is required to be quoted on the
related documents;
c) the categories of documents pertaining to business or profession in which PAN or
the General Index Register Number or the Aadhar number, as the case may be, shall
be quoted by every person;
d) the class or classes of persons to whom the provisions of this section shall not apply;
e) the form and manner in which a person who has not been allotted a PAN or the
General Index Register Number shall make a declaration;
f) the manner in which PAN shall or the General Index Register Number or the Aadhar
number, as the case may be, be quoted for transactions cited in (b) above;
g) the time and manner in which such transactions shall be intimated to the prescribed
authority.

SECTION 139AA: QUOTING OF AADHAR NUMBER

1) Mandatory quoting of Aadhar Number

Every person who is eligible to obtain Aadhar number is required to mandatorily quote
Aadhar Number, on or after 1st July, 2017:
• in the application form for allotment of PAN
• in the return of income
2) Mandatory quoting of Enrolment Id, where person does not have Aadhar Number
If a person does not have Aadhar Number, he is required to quote Enrolment ID of Aadhar
application form issued to him at the time of enrolment in the application form for allotment
of PAN or in the return of income furnished by him.
Enrolment ID means a 28 digit Enrolment Identification Number issued to a resident at the
rime of enrolment.
3) Intimation of Aadhar Number to prescribed Authority
Every person who has been allotted PAN as on 1st July 2017, and who is eligible to obtain
Aadhar number, shall intimate his Aadhar Number to prescribed authority on or before 31st
March, 2021.
Notwithstanding the last date of intimating/linking of Aadhaar Number with PAN being
31.3.2021, it is clarified that w.e.f. 01.04.2019, it is mandatory to quote and link Aadhaar
number while filing the return of income, either manually or electronically, unless specifically
exempted in cases detailed in point (5) below.
4) Consequences of failure to intimate Aadhar Number

15
 If a person fails to intimate the Aadhar Number, the permanent account Number (PAN)
allotted to such person shall be made inoperative after the date so notified in the prescribed
manner.
Accordingly, Rule 114AAA specifies the manner of making permanent account number
inoperative.
Sub- Provision
Rule
(1) If a person, who has been allotted PAN as on 1st July, 2017 and is required to intimate
his Aadhaar number under section 139AA(2), has failed to intimate the same on or
before 31st March, 2021, the PAN of such person would become inoperative
immediately after the said date (i.e., after 31st March, 2021) for the purposes of
furnishing, intimating or quoting under the Income-tax Act, 1961.
(2) Accordingly, where a person, whose PAN has become inoperative, is required to
furnish, intimate or quote his PAN under the Act, it shall be deemed that he has not
furnished, intimated or quoted the PAN, as the case may be, in accordance with the
provisions of the Act. Consequently, he would be liable for all the consequences
under the Act for not furnishing, intimating or quoting the PAN.
(3) Where such person who has not intimated his Aadhaar number on or before 31st
March, 2021, intimates his Aadhar number under section 139AA(2) after 31st March,
2020, his PAN would become operative from the date of intimation of Aadhaar
number for the purposes of furnishing, intimating or quoting under the Act.
Accordingly, the consequences in sub-rule (2) would not be applicable from such date
of intimation.
(4) The Principal Director General of Income-tax (Systems) or Director General of Income-
tax (Systems) has to specify the formats and standards along with the procedure for
verifying the operational status of PAN under sub-rules (1) and (2).

5) Provision not to apply to certain persons or class of persons

The provisions of section 139AA relating to quoting of Aadhar Number would, however, not
apply to such person or class or classes of persons or any state or part of any state as may be
notified by the Central Government.
Accordingly, the CG has, vide notification no.37/2017 dated 11.05.2017 effective from
01.07.2017, notified that the provisions of section 139AA relating to quoting of Aadhar
number would not apply to an individual who does not possess the Aadhar Number or
Enrolment ID and is:
• residing in the state of Assam, Jammu & Kashmir and Meghalaya;
• a non-resident as per income tax act;
• of the age of 80 years or more at any time during the previous year;
• not a citizen of India

SECTION 139B: SCHEME FOR SUBMISSION OF RETURN THROUGH TAX RETURN PREPARERS

1) This section provides that, for the purpose of enabling any specified class or classes of
persons to prepare and furnish their return of income, the CBDT may notify a scheme to

16
 provide that such persons may furnish their returns of income through a Tax Return Preparer
authorised to act as such under the scheme.
2) The tax return preparer shall assist the persons furnishing the return in a manner that will be
specified in the scheme, and shall also affix his signature on such return.
3) A Tax Return Preparers means any individual, other than
• any officer of a schedule bank with which the assessee maintains a current account or
has other regular dealings.
• any legal practitioners who is entitled to practice in any civil court in India.
• an accountant.
• an employee of the 'specified class or classes of person'

Who has been authorised to act as a Tax Return Preparer under the Scheme.

4) The "specified class or classes of persons" for his purpose means any person other than a
company or a person whose accounts are required to be audited u/s 44AB or under any other
existing law, who is required to furnish a return of income under the Act.
5) The scheme notified under the said section may provide for the following-
• the manner in which and the period for which the Tax return preparers shall be
authorised,
• the educational and other qualifications to be possessed, and the training and other
conditions required to be fulfilled, by a person to act as a Tax Return Preparer,
• the code of conduct for the Tax Return Preparer
• the duties and obligations of the Tax Return Preparer
• the circumstances under which the authorisation given to a Tax Return Preparer may
be withdrawn, and
• any other relevant manner as may be specified by the scheme.
6) Accordingly, the CBDT has, in exercise of the powers conferred by this section, framed the Tax
return prepares scheme, 2006, which came into force from 1.12.2006.
Particulars Contents
Applicability of Scheme The scheme is applicable to all eligible persons.
Eligible person Any person being an individual or a HUF
Tax return preparer Any individual who has been issued a "Tax Return Preparers
Certificate" and a "unique identification number" under this
scheme by the Partner organisation to carry on the profession of
preparing the returns of income in accordance with the scheme.
However, the following person are not entitled to act as Tax
Return Preparer:
(i) any officer of a scheduled bank with which the assessee
maintains a current account or has other regular dealings.
(ii) any legal practitioner who is entitled to practice in civil court
in India.
(iii) an accountant.
Educational qualification An individual, who holds a bachelor degree from a recognised

17
Particulars Contents
for Tax Return Preparer Indian university or institution, or has passed the intermediate
examination conducted by ICAI or ICSI or institute of cost
accountants of India, shall be eligible to act as Tax Return
Preparer
Preparation of and An eligible person may, at his option, furnish his return of
furnishing the Return of income u/s 139 for any assessment year after getting it prepared
income by the Tax Return through a Tax Return Preparer:
Preparer However, the following eligible person (an individual or a HUF)
cannot furnish a return of income for an assessment year
through a Tax Return Preparer:
(i) who is carrying out business or profession during the previous
year and accounts of the business or profession for that previous
year are required to be audited u/s 44AB or under any other law
for the time being in force; or
(ii) who is not a resident in India during the previous year.
An eligible person cannot furnish a revised return of income for
any assessment year through a Tax Return Preparer unless he
has furnished the original return of income for that assessment
year through such or any other Tax Return Preparer.
Question 3:
Mrs. Hetal, an individual engaged in the business of Beauty Parlour, has got her books of
account for the FY ended on 31st March,2021 audited u/s 44AB. Her total income for AY
2021-22 is Rs. 6,35,000. she wants to furnish her return of income for AY 2021-22 through a
Tax Return Preparer. Can she do so?
Answer:
Section 139B provides a scheme for submission of return of income for any assessment year
through a Tax Return Preparer. However, it is not applicable to persons whose books of
account are required to be audited u/s 44AB. Therefore, Mrs. Hetal cannot furnish her return
of income for AY 2021-22 through a Tax Return Preparer.

SECTION 139C & 139D: POWER OF CBDT TO DISPENSE WITH FURNISHING DOCUMENTS ETC.
WITH THE RETURN AND FILING OF RETURN IN ELECTRONIC FORM

(i) Section 139 provides that the CBDT may makes rules providing for a class or classes of
persons who may not be required to furnish documents, statements, receipts, certificate,
reports of audit or any other documents, which are otherwise required to be furnished
along with the return under any other provisions of this Act.
(ii) However, on demand, the said documents, statements, receipts, certificate, report of
audit or any other documents have to be produced before the Assessing officer.
(iii) Section 139D empowered the CBDT to make rules providing for-
• the class or classes of persons who shall be required to furnish the return of income
in electronic form;

18
 • the form and the manner in which the return of income in electronic form may be
furnished;
• the documents, statements, receipts, certificate or audited reports which many not
be furnished along with the return of income in electronic form but have to be
produced before the Assessing officer on demand;
• the computer resource or the electronic record to which the return of income in
electronic form may be transmitted.

SECTION 140: PERSONS AUTHORISED TO VERIFY RETURN OF INCOME

This section specifies the persons who are authorised to verify the return of income u/s 139

Assessee Circumstances Authorised person

(i) In circumstances not covered The individual himself
under (ii), (iii) & (iv) below
(ii)where he is absent from India The individual himself or any person
duly authorised by him in this behalf
holding a valid power of attorney
from the individual (such power of
attorney should be attached to the
return of income)
Individual
(iii) where he is mentally His guardians or
incapacitated from attending to Any other person competent to act
his affairs on his behalf
(iv) where, for any other reason, it Any person duly authorised by him
is not possible for the individual to in this behalf holding a valid power
verify the return of attorney from the individual (such
power of attorney should be
attached to the return of income)
(i) in circumstances not covered The Karta
under (ii) and (iii) below
(ii) where the karta is absent from Any other adult member of the HUF
HUF India
(iii) Where the karta is mentally Any other adult member of the HUF
incapacitated from attending to
his affairs
(i)in circumstances not covered The managing director of the
under (ii) to (vi) below company
(ii)(a) where for any unavoidable Any director of the company or any
reason such as managing director other person as may b prescribed for
Company is not able verify the return; or this purpose.
(b)where there is no managing
director
(iii)where the company is not A person who holds a valid power of
resident in India attorney from such company to do

19
Assessee Circumstances Authorised person
so (such power of attorney should
be attached to the return)
(vi)(a) where the company is being Liquidator
wound up (whether under the
order of the court or otherwise);
or
(b) where any person has been Liquidator
appointed as the receiver of any
assets of the company
(v)where the management of the The principal officer of the company
company has been taken over by
the central government or state
government under any other law
(vi)where an application for Insolvency professional appointed
corporate insolvency resolution by Adjudication Authority
process has been admitted by the
Adjudicating Authority under the
Insolvency and Bankruptcy Code,
2016
(i)in circumstances not covered The managing partner of the firm
under (ii) below
(ii)(a) where for unavoidable Any partner of the firm, not being
Firm reason such managing partner is minor
not able to verify the return; or
(b)where there is no managing Any partner of the firm, not being
partner minor
(i)in circumstances not covered Designated partner
under (ii) below
(ii)(a) where for unavoidable any partner of the LLP or any other
LLP reason such designated partner is person as may be prescribed for this
not able to verify the return; or purpose
(b)where there is no designated
partner
Local authority The principal officer
Political party The chief executive officer of such
[referred to in party (whether he is known as
section secretary or by any other
139(4B)] designation)
Any other Any member of the association or
association the principal officer of such
association
Any other That person or some other person
person competent to act on his behalf.

20
 SECTION 140A: SELF ASSESSMENT

(1) Payment of tax, interest and fee before furnishing return of income
Where any tax is payable on the basis of any return required to be furnished under,
inter alia, section 139, after taking into account-
(i) The amount of tax, already paid, under provision of income tax act,1961
(ii) The tax deducted or collected at source
(iii) any relief of tax claimed under section 89
(iv) any tax credit claimed to set-off in accordance with the provisions of section
115JD; and
(v) any tax or interest payable as per the provisions of section 191(2).

The assessee shall be liable to pay such tax together with interest and fees payable under
any provision of this act for any delay in furnishing the return or any default or delay in
payment of advance tax before furnishing the return. The return shall be accompanied by
the proof of payment of such tax, interest and fee.

(2) Order of adjustment of amount paid by the assessee

Where the amount paid by the assessee u/s 140A(1) falls short of the aggregate of tax,
interest and fees as aforesaid, the amount so paid shall first be adjusted towards the
fees payable and thereafter towards interest and the balance, if any, shall be adjusted
towards the tax payable.

(3) Interest under section 234A

For the above purpose, interest payable u/s 234A shall be computed on the amount of
tax on the total income as declared in the return, as reduced by the amount of –
(i) Advance tax paid, if any;
(ii) Any tax deducted or collected at source;
(iii) any relief of tax claimed under section 89
(iv) any tax credit claimed to be set-off in accordance with the provisions of section
115JD.

(4) Interest under section 234B

Interest payable u/s 234B shall be computed on the assessed tax or on the amount by
which the advance tax paid falls short of the assessed tax.
For this purpose, “assessed tax” means the tax on total income declared in the return as
reduced by the amount of
- tax deducted or collected at source on any income which forms part of the total
income.
- any relief of tax claimed under section 89
- any tax credit claimed to be set-off in accordance with the provisions of section
115JD.

21
(5) Consequences of failure to pay tax, interest or fee
If any assessee fail to pay the whole or any part of such tax or interest or fees, he shall
be deemed to be an assessee in default in respect of such tax or interest or fees
remaining unpaid and all the provisions of this Act shall apply accordingly.

Thank you!

22