Sample Document Summary

I-5
CONTENTS
PAGE
u List of Circulars/Notifications/Press Notes, etc. I-13
u Audit Reports/Report of accountant, etc.,
prescribed under Income-tax Rules 1
u Applications, certificates, reports, etc., prescribed
under Income-tax Rules 3
u Authorities prescribed under Income-tax Rules 12
u Returns/Statements, etc., prescribed under Income-
tax Rules 17
RULE
2A House rent allowance 24
2B Leave travel concession 32
2BA Amount received on voluntary retirement 44
2BB Special allowances 55
2BBA Family pension to heirs of members of
Armed Forces 59
2BBB Percentage of Govt. grant for considering
university, etc., as substantially financed
by Govt. for purposes of section 10(23C) 60
2BC Exemption for income of universities/
educational institutions/hospitals, etc. 62
2C Charitable institutions/Religious institu-
tions/Educational institutions/Hospitals 63
2DB & Sovereign Wealth Fund/Pension Fund 64
2DC
2F Guidelines for setting up Infrastructure debt
fund 66
3 Valuation of perquisites 69
3A Exemption to medical benefits/perquisites 140
3B Provident Fund, Annual Accretion referred
to in section 17(2)(viia) 153

RULE PAGE
4 Unrealised rent 155
5 Depreciation 159
5AC Tea/Coffee/Rubber development account 210
5AD Site restoration fund 211
5C to 5E Guidelines, conditions, etc., in respect of
approval under clauses (ii) and (iii) of
section 35(1) 212
5F Guidelines, conditions, etc., in respect of
approval under clause (iia) of section 35(1) 217
5G Tax on income from patent 220
6 Expenditure on scientific research 221
6A Expenditure for obtaining right to use
spectrum for telecommunication services 226
6AAC Expenditure on conservation of natural
resources 228
6AAD & Agricultural extension project 229
6AAE
6AAF & Skill development project 233
6AAH
6AB Amortisation of preliminary expenses, etc. 239
6ABA Provision for bad and doubtful debts 240
6ABAA Conditions for being notified as
infrastructural facility 241
6ABBA Other electronic modes 243
6DD Disallowance of cash payments 244
6DDA & Speculative transactions - Derivatives 270
6DDB
6E Insurance business - Reserves for unexpired
risks 275
6EA & Categories of bad or doubtful debts in case 276
6EB of public company
6F Maintenance of books of account 280
6G Report of audit of accounts u/s 44AB 290
CONTENTS I-6

RULE PAGE
6GA Computation of income by way of royalties,
etc., in case of non-residents 296
6H Computation of capital gains in case of
slump sale 298
7 Income which is partially agricultural and
partially from business 300
7A Income from the manufacture of rubber 308
7B Income from the manufacture of coffee 309
8 Income from manufacture of tea 314
8AA Capital assets 323
8B & 8C Zero Coupon Bonds 324
8D Method for determining amount of
expenditure in relation to income not
includible in total income 332
9A & 9B Amortisation of expenditure on feature
films 342
9C Carry forward and set off of accumulated
loss and unabsorbed depreciation allowance
in case of amalgamation 353
10 Determination of income in case of non-
residents 355
10A to Transfer Pricing 364
10THD
10DB Furnishing of report in respect of
International Group 537
10U to General Anti-Avoidance Rules 540
10UF
10V to Certain activities not to constitute business
10VB connection in India 548
11A Deductions to persons with disability or
severe disability 561
11AA Approval of institutions/funds for purposes
of section 80G 649
11B Deduction in respect of rents paid 651
I-7 CONTENTS

RULE PAGE
11DD Deduction in respect of medical treatment
for specified diseases 652
11EA Deduction to industrial undertakings
located in industrially backward districts 654
11F to National committee for promotion of
11-O social and economic welfare 660
11-OA Guidelines for notification of affordable
housing project as specified business
under section 35AD 667
11-OB Guidelines for notification of a semi-
conductor wafer fabrication manufacturing
unit as specified business under
section 35AD 671
11P to Tonnage tax scheme for shipping companies 674
11T
11U & Valuation of gifts 678
11UA(1)
11UA(2) Start-ups 685
11UAA Special provision for full value of
consideration for transfer of share other
than quoted share 707
11UAB Determination of fair market value of
inventory 708
11UAC Prescribed class of persons for the purpose
of clause (xi) of the proviso to clause (x) of
sub-section (2) of section 56 709
11UAD Prescribed class of persons for the purpose
of section 50CA 716
11UB & Indirect transfer - Manner of determination 717
11UC of Fair Market Value & reporting
requirement for Indian concern
12 Return of income 730
12A Preparation of return by authorised
representative 758
12C Tax on income received from Venture
Capital Companies/Funds 760
CONTENTS I-8

RULE PAGE
I-9 CONTENTS
12CA Business Trust 761
12CB Investment fund 762
12CC Securitization Trust 764
12D Power to call for information by prescribed
Income-tax Authority 765
12E Prescribed authority under section 143(2) 770
14 Inquiry before assessment - Form of
verification 772
14A Inquiry before assessment - Special audit 773
14B Guidelines for purposes of determining
expenses for Special Audit 781
15 Notice of demand 783
16 Avoidance of repetitive appeals 784
16B Exemption in respect of remuneration to
consultants, etc. 786
16C Exemption to Employees’ Welfare Funds 787
16CC Audit report to be furnished by certain
entities referred to in section 10(23C) 788
16D Free Trade Zones, industrial undertakings in 790
16DD Special Economic Zones, undertakings in 792
16E Export Oriented Undertakings 794
16F Export undertakings 796
17 Exercise of option under section 11 798
17A & Registration, etc., of charitable/religious
17B trusts 805
17C Modes of investment by charitable/religious
trusts 815
17CA Electoral Trust 819
17CB Tax on accreted income of a trust 830
18AAA Donations to universities/educational
institutions 834
18AAAAA Deduction on donations to games/sports
associations/institutions 835

RULE PAGE
18BBB Deductions to undertakings, hotels, etc. 837
18BBE Deduction from profits of certain activities
forming part of a Highway project 841
18C Deduction to undertakings operating
notified industrial parks 845
18DDA Deduction to hospital located anywhere
in India other than excluded areas 855
19AB Deduction in respect of employment of new
workmen 857
19AC Deduction in respect of royalty income,
etc., of authors of certain books other than
text books 858
19AD Deduction in respect of royalty on patents 859
19AE Deduction in respect of certain incomes of
Offshore Banking Units 860
20 & 20A Deduction under section 80C(2)(xix) and (xx) 861
21A Relief when salary is received in arrears
or in advance 863
21AA Relief on salary in the case of specified
employees 869
21AB Tax Residency Certificate for claiming
double taxation relief 870
21AC Transactions with persons located in
notified jurisdictional areas 872
21AD Tax on income of certain manufacturing
domestic companies 875
21AE & Tax on income of certain domestic
21AF companies/new manufacturing domestic
companies 876
21AG Tax on income of Individuals & HUFs 878
21AH Tax on income of certain resident Co-opera-
tive societies 880
26 to Deduction of tax at source 881
37BC
37C to Collection of tax at source 988
37J
CONTENTS I-10

RULE PAGE
29A Deduction in respect of certain items of
receipts from foreign sources 1010
38 Notice of demand for advance tax 1011
39 Estimate of advance tax 1012
40B Minimum alternate tax for companies 1013
40BA Alternate minimum tax for limited liability
partnerships 1014
40BB Tax on distributed income of domestic
company for buy-back of shares 1015
42 to 44 Tax clearance certificate 1018
44C,44CA Settlement Commission 1023
& 44D
44E & 44F Advance rulings 1028
44G Mutual Agreement Procedure 1033
45 to 46A Appeal to Commissioner (Appeals) 1065
47 Appeal to Appellate Tribunal 1074
48 Reference to High Court 1077
49 to 66 Authorised representative 1078
67 to 81 Recognised provident funds 1090
82 to 97 Approved superannuation funds 1108
98 to 111 Approved gratuity funds 1122
111AA Conditions for reference to Valuation 1130
& 111AB Officer
111B Publication and circulation of Board’s
order 1137
112 to Search and seizure 1139
112C
112D Requisition of books of account, etc. 1150
112E Collection of information 1152
112F Search cases where compulsory reopening
of past six years not required 1153
113 Disclosure of information respecting
assessees 1156
114 Permanent Account Number 1157
I-11 CONTENTS

RULE PAGE
CONTENTS I-12
114A Tax Deduction and Collection Account
Number 1186
114AA Tax Collection Account Number 1189
114AAA Aadhaar number, quoting of 1191
114AAB Permanent Account Number - Class or
classes of persons to whom PAN provisions
not applicable 1193
114B to Quoting of Permanent Account Number or
114D Aadhaar number in documents pertaining
to certain prescribed transactions 1195
114DA Furnishing of annual statement by a non-
resident having liaison office in India 1206
114DB Furnishing of information or documents by
Indian concern in certain cases 1207
114E to Obligation to furnish/statement of
114H financial transaction or reportable
account 1210
114-I Annual Information Statement 1282
115 Rate of exchange for conversion of income
in foreign currency 1285
115A Computation of capital gains on transfer
of shares/debentures by non-residents 1289
117B & Certificate to Tax Recovery Officer 1290
117C
119A Procedure for calculation of interest 1292
119AA Acceptance of payment through prescribed
electronic modes 1293
121A Statement by producers of cinematograph
films 1296
125 Electronic payment of tax 1297
126 Residential status 1300
127 Service of notice 1301
127A Authentication of notices and other
documents 1311
128 Foreign Tax Credit 1312
129 Immunity from prosecution under section
270AA 1316

RULE 12*
Return of income
The statutory background
12.1 Under section 139 of the Act, the following persons shall, on or before the
prescribed due date, furnish a return of their income in the prescribed form and
verified in the prescribed manner and setting forth such other particulars as may
be prescribed :
Section Different situations
139(1)(a) A company/firm is required to submit its return of income
(regardless of the quantum of income or loss).
139(1)(b) A person (other than an individual/HUF/AOP/BOI/artificial
juridical person/company/firm) is required to submit his/its
return of income, if income exceeds exemption limit.
139(1)(b), read with Individual/HUF/AOP/BOI/artificial juridical person is required
sixth proviso to submit his/its return of income, if income [without claiming
deduction under sections 10(38), 10A, 10B, 10BA, 54, 54B, 54D,
54EC, 54F, 54G, 54GA, 54GB, 80C to 80U] exceeds the amount of
exemption limit.
139(1)(b), read with Any person (other than a company or a firm) who is not required
seventh proviso to furnish the return of income under any other provision of
section 139(1) and who during the previous year –
a. has deposited an amount (or aggregate of the amounts)
exceeding ` 1 crore in one (or more) current account(s) in a
bank/co-operative bank; or
b. has incurred expenditure of an amount (or aggregate of the
amounts) exceeding ` 2 lakh 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 ` 1 lakh towards consumption of electric-
ity; or
d. fulfils such other conditions as may be prescribed.
139(4A) A person in receipt of income derived from property held under
a trust for charitable or religious purposes is required to submit
return of income if its income (without giving exemption under
section 11 or 12) exceeds exemption limit.
139(4B) Chief executive officer of every political party is required to
submit income-tax return if income of the political party (without
giving exemption under section 13A) exceeds exemption limit.
730
*SECTION 139.

731 STATUTORY BACKGROUND Rule 12
139(4C) If total income (without claiming any exemption given below) of
the assessee (who is qualified to claim exemption under the
following sections) exceeds the exemption limit –
- Section 10(21) - Section 10(23D) - Section 10(23FB)
- Section 10(22B) - Section 10(23DA) -Section10(24)(a)/(b)
- Section 10(23A) - Section 10(23EC) - Section 10(29A)
- Section 10(23AAA) - Section 10(23ED) - Section 10(46)
- Section 10(23B) - Section 10(23EE) - Section 10(47)
- Section 10(23C)(iiiab)/
(iiiac)/ (iiiad)/(iiiae)/
(iv)/(v)/(vi)/(via)
139(4D) Any university/college/other institution referred to in section
35(1)(ii)/(iii) is required to submit return of income (return has to
be submitted whether there is income or loss. Such return has to
be submitted even if it is not required by any other provision).
139(4E)/(4F) These sub-sections cover submission of return by business trust/
investment fund.
u Compulsory filing of income-tax return in relation to assets located outside India
- In the case of a resident person (but other than not ordinarily resident), it is
mandatory to furnish return of income if he/it at any time during the previous
year, –
a. holds (as a beneficial owner or otherwise) any asset (including finan-
cialinterestinanyentity)locatedoutsideIndiaorhassigningauthority
in any account located outside India, or
b. is a beneficiary in any asset (including any financial interest in any
entity) located outside India.
For any person (may be individual or a person other than individual) who satisfies
the above two conditions, furnishing of return has become mandatory, irrespec-
tive of the fact whether the person has taxable income or not.
Exception - The above provisions shall not apply to an individual, being a
beneficiary of any asset (including any financial interest in any entity) located
outside India where, income, if any, arising from such asset is includible in the
income of the person referred to in (a) (supra).
Beneficial owner - In respect of an asset means an individual who has provided,
directly or indirectly, consideration for the asset for the immediate or future
benefit, direct or indirect, of himself or any other person.
Beneficiary - In respect of an asset means 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.
u Resident or non-resident - Section 139(1) applies to all persons whether they are
resident or non-resident—Pannalal Nandlal Bhandari v. CIT [1961] 41 ITR 76 (SC).
Obligation to file return under section 139 cannot simply disappear merely
because a person may be entitled to claim benefit of a DTAA—Castleton Invest-
ment Ltd., In re [2012] 211 Taxman 282 (AAR - New Delhi).
Section Different situations

u Political parties - Political parties are under a statutory obligation to file return
of income in respect of each assessment year in accordance with the provisions of
the Income-tax Act and the total income for this purpose has to be computed
without giving effect to provisions of section 13A—Common Cause A Registered
Society v. Union of India [1996] 85 Taxman 600 (SC).
u Liquidator - Under the Companies Act, a liquidator is not exempt from making
an income-tax return on business managed by him for the beneficial winding up
of the company—CIT v. Official Liquidator of the Agra Spg. & Wvg. Mills Co. Ltd.
[1934] 2 ITR 79 (All.).
u Charitable trust - Submission of return by charitable trust is essential even if its
income is exempt—Lala Gopi Mal Kuthiala Trust v. ITO [1962] 46 ITR 436 (Punj.).
If the total income of a charitable trust (without claiming exemption under
sections 11, 12 and 13A) exceeds the maximum amount not chargeable to tax, then
submission of return by the trust is essential.
Rule 12 prescribes the forms in which the returns must be furnished.
12.1-2 Exemption from filing return u/s 139(1C) - See Annex 12.5.
12.1-3 Effect of filing return of income - In State of Karnataka v. Selvi J. Jayalalitha
[2017] 78 taxmann.com 161 (SC) it was held that income-tax returns and orders
wouldnotipsofactoeitherconclusivelyproveordisprovechargeofdisproportion-
ate assets (acquisition of assets disproportionate to known sources of income) and
can at best be pieces of evidences which have to be evaluated along with other
materials on record.
In the said case it was held that where income tax returns relied upon by defence
as well as orders passed in proceedings pertaining thereto had been filed/passed
after charge-sheet had been submitted, neither income tax returns nor orders
passed in proceedings relatable thereto, either definitively attested lawfulness of
sources of income of accused persons or were of any avail to them to satisfacto-
rily account disproportionateness of their pecuniary resources and properties as
mandated by section 13(1)(e) of the Prevention of Corruption Act, 1988.
It was further held that submission of income tax returns and assessments or-
ders passed thereon, would not constitute a complete defence against a charge of
acquisition of assets disproportionate to known lawful sources of income as con-
templated under Prevention of Corruption Act and that further scrutiny/analysis
thereof was imperative to determine as to whether offence as contemplated by
Prevention of Corruption Act was made out or not.
12.1-4 Obligation to file return and DTAAs - In Castleton Investment Ltd., In re
[2012] 24 taxmann.com 150/211 Taxman 282 (AAR - New Delhi) it was held that
section 139 insists that every person, being a company, firm or a person other than
a company or firm if its or his total income exceeds the maximum amount, which
is not chargeable to income-tax, has to file a return of income. A company, which
is entitled to claim the benefit of a DTAC, might have an income exceeding the
maximum amount which is not chargeable to tax under the Act. On the language
of section 139, such a person is bound to file a return of income. When a person
claims the benefit of a DTAC, that person is invoking section 90(2) to do so. In other
words, a person, earning an income that is chargeable to tax under the Act, has to
make a claim by invoking section 90(2) for getting the benefit of a DTAC. So, even
Rule 12 RETURN OF INCOME 732

if he would be entitled to seek relief under the DTAC, he has to seek it and that
would be during the consideration of his return of income or at best while filing
his return. If so, the obligation under section 139 cannot simply disappear merely
because a person may be entitled to claim the benefit of a DTAC.
12.1-5 In case of firms - In Sasi Enterprises v. Asstt. CIT [2014] 41 taxmann.com
500/222 Taxman 78 (SC), it was held that a firm is independently required to file
return of income; merely because partners of firm in their individual returns
disclosed that no return had been filed by firm due to non-finalisation of books of
account, would not nullify liability of firm to file its return as per section 139(1).
Validity of Return Forms
12.2 In Om Prakash Tewari v. UOI [2007] 163 Taxman 199 (All.), it was held that
new return Forms for assessment year 2007-08, introduced by Government, are
applicable for year in question only and, therefore, as an interim measure, if
returns were filed by petitioners and assessees in Saral 2D Form, same shall be
entertained by authorities and shall not be rejected on ground that same were not
in prescribed Forms ITR-1 to ITR-8.
In All Gujarat Federation of Tax Consultants v. UOI [2007] 163 Taxman 196 (Guj.),
it was held that Notification No. SO 762(E), dated 14-5-2007 introducing new
return Forms could not be quashed on ground that new tax return Forms
introduced by said notification are so complicated that it is impossible for a
genuine taxpayer to file returns with supporting details.
In Jodhpur Chartered Accountant Society v. Union of India [2007] 212 CTR (Raj.)
373, it was held that no prejudice was going to be caused to the Department if the
assessees were allowed to submit return in Saral 2D Forms. If the returns were
filed by the assessees of the State by submitting Saral 2D Forms, the same shall be
entertained by the authorities and the same shall not be rejected on the ground
that the same were not in the prescribed new Forms.
In Union of India v. Income-tax Bar Association, Lucknow [2008] 169 Taxman 38
the Supreme Court held that whether the return should be filed in a particular
Form is not the business of the Court. It is for the statutory authority to decide the
same. In that case the Supreme Court observed that though the High Court had
permitted the assessees to file income-tax returns in Form Saral 2D, instead of
Forms ITR-1 to ITR-8, due to paucity of time and non-availability of adequate
number of forms, since time for filing return in prescribed Form had been
extended, impugned order was to be set aside and all the assessees, who had
already filed return in Form Saral 2D pursuant to the impugned order, were to be
directed to file return in the prescribed Form till the extended date.
In Sujata Grover v. CIT [2014] 45 taxmann.com 36/223 Taxman 44 (Mag.)(Punj. &
Har.) it was held that filing of income-tax return with an office which has no
concern or connection with assessment of income of the assessee, in law, would
amount to no filing of return under section 147, read with section 148.
e-filing of return
12.3 In Crawford Bayley & Co. v. Union of India [2011] 16 taxmann.com 323/[2012]
204 Taxman 598 (Bom.) for relevant assessment year, the assessee-firm uploaded
itsreturnofincomeonofficialwebsiteofDepartment.Itreceivedanelectronically
733 E-FILING OF RETURN Rule 12

generated mail from Department acknowledging e-filing of return of income.
Subsequently,inaccordancewithinstructionsofDepartment,theassesseeposted
a copy of ITR-V Form duly signed by one of its partners. Said Form was remitted
by ordinary post since instructions of Department specifically stipulated that ITR-
V Form should only be sent by ordinary post. The assessee received a communi-
cation stating that said Form had not been received at Centralized Processing
Centre. Hence, once again the assessee submitted a copy of Form which was
transmitted by ordinary post. Finally, by impugned communication, the assessee
was informed that return of income filed in electronic format had been treated as
invalid on ground that ITR-V Form had not been received by Central Processing
Centre of Department. It was held that since assessee had furnished adequate
material before Court in support of its contention that having filed return
electronically, it had also submitted ITR-V Form by ordinary post, impugned
communication was to be set aside by permitting assessee to file a verification of
return before Assessing Officer within a period of one week from date of order.
In Elecon Packpet v. ITO [2011] 15 taxmann.com 351/[2012] 49 SOT 402 (Chd. -
Trib.) the assessee had e-filed its original return of income in which no deduction
under section 80-IC was claimed. However, the said deduction was claimed in the
revised return. The explanation of the assessee in this regard was that it had
claimedthedeductionundersection80-ICintheoriginalreturnofincomebutdue
to computer system error, the same was not reflected in the return. The Assessing
Officer, however, rejected the explanation and refused to allow deduction under
section80-IC.Itwasheld thattheAssessingOfficerhadnotpointedoutanydefault
in furnishing of the audit report under section 44AB. No reference was made to
non-fulfilment of conditions for claiming deduction under section 80-IC by non-
furnishing of details of the audit report. Further, the assessee had within the
prescribed period revised its return of income and had corrected the error in the
original return of income. Therefore, the assessee could not be said to have not
fulfilled the provisions of section 80-IC in furnishing the return of income
prescribed under section 139(1), keeping in mind that this was first year of e-filing
of return of income by the assessee. In view of the above, the appeal of the assessee
was to be allowed.
In Court On Its Own Motion v. CIT [2013] 31 taxmann.com 31 (Delhi) a public
interest litigation was filed alleging numerous difficulties faced by income-tax
assessees after implementation of computerization and central processing of
returns. To remove such difficulties, mandamus were issued by the Delhi High
Courtregarding(i)maintenanceofregisterforreceiptanddisposalofrectification
applications under section 154; (ii) procedure prescribed under section 245 to be
followed by CPC before making adjustment of refund payable with existing
demand; (iii) past adjustments, where procedure under section 245 had not been
followed; (iv) interest under section 244A to be allowed when assessee is not at
fault; (v) uncommunicated intimation under section 143(1); (vi) verification and
correctionofunverifiedTDSinForm26ASandunmatchedchallans,withinatime
period to be fixed; (vii) credit of TDS to an assessee when tax deducted has been
depositedwithrevenuebutincorrectparticularshavebeenuploadedbydeductor.
Samir Narain Bhojwani v. Dy. CIT [2020] 115 taxmann.com 70 (Bom.) it was held
that procedure of filing electronic return as per section 139D read with rule 12

735 E-FILING OF RETURN Rule 12
cannot bar assessee from making claim which he was entitled to; assessee was
directed to make representation before CBDT where he was not able to reflect set
off of loss available in terms of section 72 in prescribed return of income in
electronic form.
In Shapoorji Pallonji & Co. (P.) Ltd. v. Dy. CIT [2016] 76 taxmann.com 92 (Bom.) it
was held that where the Assessing Officer was unable to process return due to
system failure, the senior most officers of department would address issue on
war-footing to ensure that the system runs efficiently so that the return could be
processed and, refund, if any, could be granted.
In Tata Projects Ltd. v. Dy. CIT [2017] 88 taxmann.com 325 (Bom.) it was held that
whenever returns are transferred by Central Processing Centre to the Assessing
Officerforprocessing,ifreturnscannotbeprocessedimmediatelybecauseoflack
of availability of proper software, or because of technical difficulties in function-
ingofsoftware,theCommissioneroughttopermittheAssessingOfficertoprocess
returns manually. Where software is not provided to deal with returns of a
particular year, there is no embargo imposed by law which prevents the Assessing
Officer from processing returns manually.
In Sumanchandra G. Mehta v. ITO [2013] 33 taxmann.com 25/60 SOT 21 (URO)
(Mum. - Trib.) it was held that where there was clerical mistake in e-return,
Assessing Officer should rectify such mistake.
InE.K.K.&Co.v.Asstt.CIT [2012]27taxmann.com111/[2013]144ITD636(Cochin
- Trib.) the assessee uploaded return of income electronically on 25-9-2009 and
claimed to have posted acknowledgement Form ITR-V on 5-10-2009. However,
said acknowledgement was received at CPC, Bangalore on 29-11-2010, i.e., beyond
period of 120 days as stipulated in scheme of e-filing. However, for relevant
assessment year 2009-10, specified period was extended up to 31-12-2010. It was
heldthatsinceacknowledgementwasreceivedbyCPCwithinextendedperiod,for
all practical purposes, date of filing return would relate back to date on which
return was electronically uploaded, i.e., 25-9-2009, and it could not be contended
that date of receipt of Form ITR-V by CPC would be date of receipt of return.
In Dwarkadas G. Panchmatiya v. Asstt. CIT [2015] 57 taxmann.com 2/153 ITD 625
(Mum. - Trib.) it was held that in terms of Electronic Furnishing of Return of
Income Scheme 2007, assessee would be deemed to have furnished valid return
of income if duly verified form ITR-V is filed within 15 days after e-filing of return;
if ITR-V is filed thereafter, no deduction for section 80-IB, etc. would be allowed.
In Himanshu Nalin Kaji v. Dy. CIT [2015] 60 taxmann.com 70/155 ITD 41 (Mum.-
Trib.) it was held that inadvertent mistake of not mentioning short-term capital
gain in a column of ITR 4 is not fatal to assessee’s claim for concessional rate of
tax under section 111A.
In Fibres & Fabrics International (P.) Ltd. v. Dy. CIT [2016] 72 taxmann.com 87/160
ITD 102 (Bang. - Trib.) it was held that return of income could not be declared as
invalid for belated receipt of Form ITR-V.
In Luxury Goods Retail (P.) Ltd. v. Dy. CIT [2017] 83 taxmann.com 186/165 ITD
490 (Mum. - Trib.) it was held that when assessee could not file return electroni-
cally within due date due to technical reasons but manual return was filed within

due date as specified under section 139(1), benefit of set off and carry forward of
losses could not be denied.
Due dates for filing returns under section 139(1)
12.4 The due dates prescribed for filing returns under section 139(1) for various
categories of persons/situations are as follows:
Situations Due date for
filing of return
If assessee is required to furnish a report of transfer pricing 30th November
(TP) Audit in Form No. 3CEB
If assessee is a partner in a firm who is required to furnish a 30th November
report of Transfer Pricing (TP) Audit in Form No. 3CEB
If an Individual is a spouse of a person, being a partner in a 30th November
firm required to furnish a report of Transfer Pricing (TP) Audit
in Form No. 3CEB, and the provisions of section 5A applies to
such spouse.
Company assessee not required to furnish transfer pricing 31st October
audit report in Form No. 3CEB
If assessee is required to get its accounts audited under 31st October
Income-tax Act or any other law
If assessee is a partner in a firm whose accounts are requi- 31st October
red to be audited
If an Individual is spouse of a person, being a partner in a 31st October
firm whose accounts are required to be audited, and the
provisions of section 5A applies to such spouse.
In any other case 31st July
The prescribing of different dates for companies and other categories of assessees
was held as not violative of article 14 of the Constitution - N. Vinodkumar & Co. v.
Union of India [1999] 237 ITR 502 (Kar.).
12.4-1 When due date falls on a holiday - Where the due date falls on a day on
which the income-tax office is closed, it has been clarified that the return can be
filed on the next day afterwards on which the office is open, and that the return
so filed will be treated as a return filed in time for all purposes. - CBDT Circular
No. 639, dated 13-11-1992 [Annex 12.1].
12.4-2 Extending the due date in special circumstances - Under section 119(2)(a)
of the Act, the CBDT is empowered to relax the provisions of section 139 under
certain specified special circumstances, and also correspondingly relax the
requirement of levy of interest under section 234A/234B/234C.
Form of return of income (as amended up to 25-2-2021)
12.5 Form of return of income, as per rule 12(1), shall be as under :
(a) in the case of a person being an individual who is a resident other than not
ordinarilyresidentandwherethetotalincomeincludesincomechargeable
to income-tax, under the head,—
(i) “Salaries” or income in the nature of family pension as defined in the
Explanation to clause (iia) of section 57; or
(ii) “Income from house property”, where assessee does not own more
than one house property and does not have any brought forward loss
or loss to be carried forward under the head; or

(iii) “Income from other sources”, except winnings from lottery or
income from race horses and does not have any loss under the head,
be in Form SAHAJ (ITR-1) and be verified in the manner indicated therein:
The provisions of (a) shall not apply to a person who,—
(I) has assets (including financial interest in any entity) located outside
India;
(IA) has signing authority in any account located outside India;
(IB) has income from any source outside India;
(IC) has income to be apportioned in accordance with provisions of
section 5A;
(ID) has claimed deduction under section 57, other than deduction
claimed under clause (iia) thereof;
(IE) is a director in any company;
(IF) has held any unlisted equity share at any time during the previous
year;
(IG) is assessable for the whole or any part of the income on which tax has
been deducted at source in the hands of a person other than the
assessee;
(II) has claimed any relief of tax under section 90 or 90A or deduction of
tax under section 91;
(III) has agricultural income, exceeding five thousand rupees;
(IV) has total income, exceeding fifty lakh rupees;
(V) has income taxable under section 115BBDA; or
(VI) has income of the nature referred to in section 115BBE;
(b) in the case of a person being an individual [not being an individual to whom
clause (a) applies or a Hindu undivided family where the total income does
not include income under the head business or profession, be in Form No.
ITR-2 and be verified in the manner indicated therein;
(c) inthecaseofapersonbeinganindividualoraHinduundividedfamily,who
is a resident other than not ordinarily resident, or a firm, other than limited
liability partnership firm, which is a resident deriving income under the
head “Profits or gains of business or profession” and such income is
computed in accordance with special provisions referred to in section
44AD, section 44ADA and section 44AE of the Act for computation of such
income, be in Form SUGAM (ITR-4) and be verified in the manner
indicated therein:
The provisions of (c) shall not apply to a person who,—
(I) has assets (including financial interest in any entity) located outside
India;
(IA) has signing authority in any account located outside India;
(IB) has income from any source outside India;
(IC) has income to be apportioned in accordance with provisions of
section 5A;
737 FORM OF RETURN OF INCOME Rule 12

(ID) is a director in any company;
(IE) has held any unlisted equity share at any time during the previous
year;
(IF) has total income, exceeding fifty lakh rupees;
(IG) ownsmorethanonehouseproperty,theincomeofwhichischargeable
under the head “Income from house property”;
(IH) has any brought forward loss or loss to be carried forward under any
head of income;
(IJ) is assessable for the whole or any part of the income on which tax has
been deducted at source in the hands of a person other than the
assessee;
(II) has claimed any relief of tax under section 90 or 90A or deduction of
tax under section 91;
(III) has agricultural income, exceeding five thousand rupees;
(IV) has income taxable under section 115BBDA; or
(V) has income of the nature referred to in section 115BBE;
(d) in the case of a person being an individual or a Hindu undivided family
other than the individual or Hindu undivided family referred to in (a) or
(b) or (c) and having income under the head business or profession, be in
Form No. ITR-3 and be verified in the manner indicated therein;
(e) in the case of a person not being an individual or a Hindu undivided family
or a company or a person to which (g) applies, be in Form No. ITR-5 and be
verified in the manner indicated therein;
(f) in the case of a company not being a company to which (g) applies, be in
Form No. ITR-6 and be verified in the manner indicated therein;
(g) in the case of a person including a company whether or not registered
under section 25 of the Companies Act, 1956 (1 of 1956), required to file a
return under sub-section (4A) or sub-section (4B) or sub-section (4C) or
sub-section (4D) of section 139, be in Form No. ITR-7 and be verified in the
manner indicated therein;
Filing of audit report with return of income
12.6 Rule 12(2) provides that returns shall not be accompanied by a statement
showing the computation of the tax payable on the basis of the return, or proof of
thetax,ifany,claimedtohavebeendeductedorcollectedatsourceortheadvance
tax or tax on self-assessment, if any, claimed to have been paid or any document
or copy of any account or form or report of audit required to be attached with the
return of income under any of the provisions of the Act.
Proviso to rule 12(2) provides that where an assessee is required to furnish a report
of audit specified under sub-clause (iv), (v), (vi) or (via) of clause (23C) of section
10, section 10A, section 10AA, clause (b) of sub-section (1) of section 12A, section
44AB,section44DA,section50B,section80-IA,section80-IB,section80-IC,section
80-ID, section 80JJAA, section 80LA, section 92E, section 115JB, section 115JC or
section 115VW or to give a notice under section 11(2)(a), of the Act, he shall furnish
the same electronically.

Thus, following forms shall be submitted electronically :
Section Form No.
10(23C)(iv) 10BB
10(23C)(v) 10BB
10(23)(vi) 10BB
10(23C)(via) 10BB
10A 56F
10AA 56F
11(2)(a) 10
12A(1)(b) 10B
44AB 3CA, 3CB, 3CD
44DA 3CE
50B 3CEA
80-IA 10CCB
80-IB 10CCB, 10CCBA, 10CCBB, 10CCBC, 10CCBD
80-IC 10CCB
80-ID 10CCBBA
80JJAA 10DA
80LA 10CCF
92E 3CEB
115JB 29B
115JC 29C
115VW 66
Manner of furnishing return of income (as amended up to 25-2-2021)
12.7 Rule 12(3) provides that the return of income shall be furnished by a person
mentioned in column (ii) of the Table below to whom the conditions specified in
column (iii) apply, in the manner specified in column (iv) thereof:—
TABLE
Sl. Person Condition Manner of furnishing
No. return of income
(i) (ii) (iii) (iv)
1 Individual or
Hindu undi-
vided family
739 MANNER OF FURNISHING RETURN OF INCOME Rule 12
Electronically under digital
signature;
(A) Electronically under
digital signature; or
(B) Transmitting the data
electronically in the
(a) Accounts are required
to be audited under
section 44AB of the
Act;
(b) Where total income
assessable under the
Act during the previ-
ous year of a person,

2 Company
3 A person re-
quired to fur-
nish the
returninForm
ITR-7
being an individual of
the age of eighty years
or more at any time
during the previous
year, and who fur-
nishes the return in
Form number SAHAJ
(ITR-1) or Form num-
ber SUGAM (ITR-4).
(c) In any other case
In all cases
(a) In case of a political
party;
(b) In any other case.
returnunderelectronic
verification code
(Annex 12.4); or
(C) Transmitting the data
in the return electroni-
cally and thereafter
submitting the verifi-
cation of the
return in Form ITR-V
(Annex 12.3); or
(D) Paper form;
electronically in the
returnunderelectronic
verification code
(Annex 12.4); or
cation of the return in
Form ITR-V (Annex
12.3);
signature.
signature:
cally under electronic
verification code
(Annex 12.4); or
Form ITR-V (Annex
12.3).
(i) (ii) (iii) (iv)

4 Firmorlimited
liability part-
nership or any
person (other
than a person
mentioned in
Sl. Nos. 1 to 3
above) who is
requiredtofile
returninForm
ITR-5
“Electronic verification code” means a code generated for the purpose of elec-
tronic verification of the person furnishing the return of income as per the data
structure and standards specified by Principal Director General of Income-tax
(Systems) or Director General of Income-tax (Systems) (Annex 12.4).
Judicial decisions
12.8 The following decided cases dealing with the filing of return of income under
section 139 may also be noted.
12.8-1 An unverified return is invalid - A return which is not verified is invalid and
is no return in the eye of law.—CIT v. Dr. Krishan Lal Goyal [1984] 148 ITR 283
(Punj. & Har.).
12.8-2 Signing and verification of return as per requirement of section 140 is
mandatory - Section 140 clearly lays down that in the case of an individual, the
return has to be signed by the individual, in the case of a HUF, it has to be signed
by the karta; and in the case of a company, it has to be signed and verified by the
managingdirector.Thus,whatitcontemplatesisthatallcategoriesofreturnshave
to be duly signed and verified by a person. If it is not duly signed and verified, then
it cannot be treated to be a return in the eye of law. That being the position, if a
return is filed without signature and verification, it will have to be treated to be an
invalid return.
Under section 292B, the idea is that if any minor defect is there which does not
militate against the intent and purpose of the Act, then such minor defect can be
cured but according to section 140, which is mandatory, every return has to be
signedandverified.Section140saysthatareturnundersection139shallbesigned
and verified. The word ‘shall’ has been used which shows that it is mandatory that
every return should be signed and verified and if it is not signed and verified, then
it is in breach of the provisions of section 140 of the Act. Therefore, this cannot be
adefectwhichcanbecuredandanyreturnwhichhasbeenfiledwithoutsignature
741 JUDICIAL DECISIONS Rule 12
(i) (ii) (iii) (iv)
(a) Accountsarerequired
to be audited under
section 44AB of the
Act;
(b) In any other case.
Electronically under digi-
tal signature;
inthereturnelectroni-
cally under electronic
verification code
(Annex 12.4); or
inthereturnelectroni-
Form ITR-V (Annex
12.3).

and verification of the assessee, will not be treated as a valid return - Khialdas &
Sons v. CIT [1997] 94 Taxman 394 (MP).
In CIT v. Masoneilan (India) Ltd. [1999] 107 Taxman 559 (Ker.) it was held that the
common law qui facit per alium facit per se governs the matter of signatures by
persons. That principle says that what a man can do himself can equally well be
done by his duly authorised agent. It is well-settled that unless there is a specific
provision of law requiring the signatures and verification of the assessee himself,
the signature etc., may be validly affixed by the constituted attorney. A return can
be signed and verified only as provided for in section 140(c). In the case of a
company, a return under section 139 is to be signed and verified as per section
140(c) between 1-4-1962 and 31-3-1976 by the principal officer. With effect from
1-4-1976, in the case of a company, the return is to be signed and verified by the
managing director himself or where for any unavoidable reason such managing
director is not able to sign and verify the return or where there is no managing
director, by any director thereof. It is a well-settled salutary principle that if a
statute provides for a thing to be done in a particular manner, then it is to be done
inthatmannerandinnoothermanner.Therefore,areturnwhichisnotsignedand
verified is non est. If a statute requires personal signature of a person, which
includes a mark, the signature or the mark must be that of the person himself. But
this follows only when it is permissible for the agent to sign the name of the
principal. Signature includes a mark. The use of the words ‘himself’ or by him ‘or’
under his hand or ‘personally’ indicates that even an authorised agent is precluded
from signing on behalf of the principal. However, absence of proper signature or
verification is a curable one and the assessee must have an opportunity to rectify
it. Section 292B provides that no return of income shall be invalid or shall be
deemed to be invalid merely by reason of any mistake, defect or omission in such
return of income, if it is in substance and effect in conformity with or according
to the intent and purpose of the Act. Section 139 also throws some light on the
question. If there is any defect, the Assessing Officer is required to give an
opportunity to the assessee to rectify the defect within a stipulated time.
In Asstt. CIT v. Cannon Steels (P.) Ltd. [2008] 23 SOT 42 (Mum.)(URO) it was held
that whether signature is small or in full, if it is signed then return has to be treated
as valid return.
In Bharat Nidhi Ltd. v. CIT [2007] 165 Taxman 314 (Delhi) it was held that where
assessee had made an error in nature of a defect of signing of return by its
Secretary which was removed by filing a fresh return signed by its MD, Tribunal
was wrong in treating initial return as an invalid return on ground that it had not
been signed in accordance with provisions of section 140(c).
InHindSamacharLtd.v.UOI [2008]169Taxman302(Punj.&Har.)itwasheldthat
a return of income is required to be signed mandatorily by managing director of
company and in his absence, due to certain reasons, by any director thereof.
InMaharashtraKrishnaValleyDevelopmentCorpn.v.Asstt.CIT [2009]27SOT235
(Pune) it was held that where assessee-company had no one with designation of
director or managing director and its affairs were being managed by an executive
committee, in such a situation requirement of section 140(c) would be complied
with as long as any of member of executive committee, signed and verified
income-tax return on behalf of the company.
In CIT v. Moti Ram [2008] 175 Taxman 27 (Punj. & Har.) it was held that where on
the date on which the return was filed the assessee had already expired the return

filed with signatures of the assessee after his death could not be taken as a valid
return filed by the assessee himself and it was null and void.
In Prime Securities Ltd. v. Varinder Mehta, Asstt. CIT [2009] 182 Taxman 221
(Bom.) it was held that once section 140 mandates that the return has to be signed
in the case of a company by the managing director and where managing director
is not available by any director thereof, it cannot be said that the signing of the
return by the company secretary is merely an irregularity. Such a defect, there-
fore, would not amount to a mere irregularity and the return filed would have to
be treated as defective.
In CIT v. Haryana Sheet Glass Ltd. [2009] 318 ITR 173 (Delhi) it was held that where
secretary of assessee-company had signed return who was otherwise, as per
provisions of Companies Act, competent to sign but provisions of section 140
mandate that managing director or some other responsible officers should sign,
inacaselikethis,irregularitywascurableandwhenmistakewasrectifieddoctrine
of relation back was rightly applied.
In Morgan Stanley Asset Management Inc. v. Dy. CIT [2009] 33 SOT 452 (Mum. -
Trib.) it was held that the requirement of filing copy of the power of attorney is
conspicuously absent in section 140(c). This clause of section 140 warrants the
attachment of the power of attorney to the return. The return filed without the
original power of attorney cannot be treated as invalid and non est, without
providing opportunity to the assessee to file such power of attorney in original,
more so when the original power was in existence. The filing of the copy instead
oftheoriginalpowerofattorneyisonlyanirregularityandcouldnotinvalidatethe
return.
12.8-3 Omission which go to the root of the matter will invalidate the return - In
the case of CIT v. S.P. Viz. Construction Co. [1987] 165 ITR 732 (Pat.), the assessee
initially filed a return on 31-5-1972 in which all that was mentioned was that the
assessee had a taxable income of Rs. 80,000 on estimate basis. No part of the return
in Form No. 2 (especially Part VI), was filled in. The assessee itself realised that this
return was defective for various reasons, and hence filed a revised return on
17-3-1973. The Tribunal held that the earlier return filed on 31-5-1972 was a valid
return. The High Court held—
“.... that the Tribunal was not correct in holding that the first return filed on May 31,
1972, was a valid return since it was not accompanied by the statements of account
in respect of the income shown in the return....”
12.8-4 Reconstituted firm or its partners cannot be debarred from filing voluntary
return - There is no provision under which a reconstituted firm or its alleged
partners could be restrained from filing a return of income if it volunteers to file
the same. On the contrary, section 139 casts a statutory obligation on every person
to file a return if his total income exceeds the non-taxable limit. Section 139 makes
no distinction between a legal and an illegal entity in this regard - Madan Mohan
Paul v. CIT [1994] 75 Taxman 368 (All.).
12.8-5 Voluntary return can be filed even after issue of reassessment notice - It was
held in Burdwan Wholesale Consumers’ Co-operative Society Ltd. v. CIT [1991] 191
ITR 570 (Cal.) that the chance issue of a notice under section 148 even while the
time for filing a voluntary return was still running, could not abridge the assessee’s
statutory privilege of filing a voluntary return under section 139(4). For, if it does,
it will lead to hostile discrimination, because another person by a mere freak of not
being served with such a notice shall be entitled to the same benefit. This decision
was followed in Satyanarayan Bhalotia v. CIT [1993] 113 CTR (Cal.) 429.
743 JUDICIAL DECISIONS Rule 12

12.8-6 Defective return - There is no merit in the contention that the return filed
by a person who had paid the tax but not filed the proof thereof shall be defective
but the return filed by a person who has not paid the tax (though payable) and,
therefore, not furnished the proof of payment, would not be defective. A return of
income filed under sub-section (1) of section 139 on self-assessment basis must be
precededbypaymentoftaxandaccompaniedbyproofofthetaxhavingbeenpaid
(if due and payable as per self-assessment) failing which the return would be
defective - Sudhir Sareen v. CIT [1999] 239 ITR 440 (Delhi).
In Cobra Instalacions Y Services, SA v. Dy. DIT [2008] 21 SOT 613 (Delhi - Trib.) it
was held that non-filing of power of attorney under section 140(c) along with
return, is not a ‘defect’ within meaning of section 139(9).
12.8-7 Merely because a return is not complete, it will not cease to be a return under
section 139 - In Dy. CIT v. Pala Marketing Co-operative Society Ltd. [2000] 111
Taxman357(Ker.)thecontentionoftherevenuewasthatthereturnundersection
139 has to be a return complete in all respects and, therefore, the return filed could
not be treated as one under section 139 of the Act where the correct rate of
depreciation was not indicated. The court held that the revenue’s plea was clearly
untenable. The return under section 139 has to be filed in the prescribed form and
verified in the prescribed manner and setting forth such other particulars as may
be prescribed. Even if the return is not complete, it nevertheless is a return under
section 139 which is clear from a reading of sub-section (5) of section 139.
12.8-8 Directors,incaseof-InRakshit Jainv.Asstt.CIT [2018]99taxmann.com299
(Delhi) it was held that though prime responsibility of furnishing return of income
of company is of managing director of such company, but then, it is not correct to
read above provision so as to conclude that it is always or invariably responsibility
of managing director alone and of no other. Thus, directors are also equally
responsible for furnishing of return on behalf of company.
e-filing of return by companies in liquidation
12.9 See Annex 12.2.
e-payment of tax
12.10 See rule 125.
Centralised Processing of Returns Scheme, 2011
12.11 See Annex 12.3.

Description
Taxmann’s Master Guide to Income Tax Rules, is a unique book which
provides an in depth Rule-wise commentary on Income-tax Rules. It also
provides the following:
 Gist of all Circulars & Notifications, Press Notes, etc.
 Judicial precedents on all controversial matters
 Audit Reports/Reports of Accountants, etc. prescribed under
Income-tax Rules
 Applications/Certifications/Reports, etc. prescribed under Income-tax
Rules
 Authorities prescribed under Income-tax Rules
 Returns/Statements, etc. prescribed under Income-tax Rules
The Present Publication is the 28th Edition, which incorporates all the
amendments till the Income-tax (Fifth Amendment) Rules, 2021.
Rs. 1995 | USD 64
Author : Taxmann
Edition : 28th Edition
ISBN No : 9789390831135
Date of Publication : April 2021
Weight (Kgs) : 1.38
No. of papers : 1336
Master Guide To
Income Tax Rules
2021
ORDER NOW

Sample Document Summary

Recommended

Recommended

More Related Content

What's hot

What's hot (7)

Similar to Sample Document Summary

Similar to Sample Document Summary (20)

More from Taxmann

More from Taxmann (20)

Recently uploaded

Recently uploaded (20)

Sample Document Summary