By P. N. Shah | Arti Shah
Chartered Accountants
BACKGROUND
In this year’s Budget, the provisions of Section 139 of the Income-tax Act have been amended effective from 1st April, 2022. The effect of this amendment is that an assessee can file a revised or updated return within two years of the end of the relevant assessment year. In Paras 121 and 122 of the Budget Speech delivered by the Finance Minister on 1st February, 2022, it is stated as under:
“121. India is growing at an accelerated pace and people are undertaking multiple financial transactions. The Income tax Department has established a robust frame work of reporting of tax payer’s transactions. In this context, some taxpayers may realise that they have committed omissions or mistakes in correctly estimating their income for tax payment. To provide an opportunity to correct such errors, I am proposing a new provision permitting taxpayers to file an Updated Return on payment of additional tax. This Updated Return can be filed within two years from the end of the relevant assessment year.
122. Presently, if the department finds out that some income has been missed out by the assessee, it goes through a lengthy process of adjudication. Instead, with this proposal now, there will be a trust reposed in the taxpayers that will enable the assessee herself to declare the income that she may have missed out earlier while filing her return. Full details of the proposal are given in the Finance
