Now return is not defective if self assessement tax and interest not paid

By | March 6, 2016
(Last Updated On: March 6, 2016)

Finance Bill 2016

Defective Return

Finance Bill 2016 has ommited Clause (aa) in section 139(9)  as a result income tax return will not be treated as defective if self assessement tax and   interest payable in accordance with the provisions of section 140A has not been paid on or before the date of furnishing of the return.

Relevant Extracts of Finance Bill 2016 are as follow :-

It is  proposed to omit clause (aa) of the Explanation to sub-section (9) of aforesaid section to provide that a return which is otherwise valid would not be treated defective merely because self-assessment tax and interest payable in accordance with the provisions of section 140A has not been paid on or before the date of furnishing of the return.
These amendments will take effect from 1st day of April, 2017 and will, accordingly apply in relation to assessment year 2017-2018 and subsequent years.

Effect of Defective return :-

Earlier the defective return filed could be declared as invalid if the assessee did not pay self assessement tax and interest within 15 days of intimation or extended period and the provisions of income tax Act shall apply as if the assessee had failed to furnish the return as per following provision of Section 139(9)

Where the Assessing Officer considers 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 fifteen days from the date of such intimation or within such further period which, on an application made in this behalf, the Assessing Officer may, in his discretion, allow; and if the defect is not rectified within the said period of fifteen days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in any other provision of this Act, the return shall be treated as an invalid return and the provisions of this Act shall apply as if the assessee had failed to furnish the return :

Provided that where the assessee rectifies the defect after the expiry of the said period of fifteen days or the further period allowed, but before the assessment is made, the Assessing Officer may condone the delay and treat the return as a valid return.

Effect of this Amendment in Finance Bill 2016 :-

Now the return can not declared as invalid  merely because self-assessment tax and interest payable in accordance with the provisions of section 140A has not been paid on or before the date of furnishing of the return.

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