The Union Budget of 2017 witnessed a major decision regarding the validation of time taken for assessment, re-assessment and re-computation for revised Income Tax return filing thereby shortening the time frame of the same.
Time limit for revised Income Tax return filing:
With a move towards optimization of the whole process of revised Income Tax return filing, the Budget of 2017 has come up with a completely reduced time frame making significant changes in relevant sections such as Section 153 that speaks about the time limit for filing revised Income Tax return after proper assessment, re-assessment and re-computation.
In addition to this, a major metamorphosis is taking place in the I-T Department at present owing to the radical technological transformation that will definitely lower down the manual intervention and make the process of filing much more organized and neater.
The major changes that have been made in the various time frames of Income Tax return filing are as follows:
- As per Section 143 and 144, the time limit is going change from the existing twenty-one months to eighteen months for the assessment year 2018-19 whereas the same is going to be reduced further to twelve months from the assessment year ending 2019-20 onwards when the income was assessable for the first time.
- Under sub-section(2) of Section 147, where notices have been served on or after the 1st day of April, 2019, the time duration for re-assessment or re-computation will be twelve months from the financial year ending in which the notice was served.
- As for the other relevant sections, changes have been made like “sub-section (3) of the said section to provide that the time limit for making an order of fresh assessment in pursuance of an order passed or received in the financial year 2019-20 and onwards under sections 254 or 263 or 264 shall be twelve months from the end of the financial year in which order under section 254 is received or order under section 263 or 264 is passed by the authority referred therein.”
- Sub-section (5) of the said section that deals with orders under Section 250, 254, 260, 262, 263 or 264 for verifying some issues by submission of documents by the assessee, ‘the time limit relating to fresh assessment provided in the sub-section (3) shall apply to the order giving effect to such order.’
- The Finance Ministry has also decided to modify the “sub-section (9) of the said section to provide that where a notice under sub-section (1) of section 142 or sub-section (2) of section 143 or under section 148 has been issued prior to the 1st day of June, 2016 and the assessment or reassessment has not been completed by such date due to exclusion of time referred to in Explanation 1, such assessment or reassessment shall be completed in accordance with the provisions of section 153 as it stood immediately before its substitution by the Finance Act, 2016.” This will be applicable retrospectively from 1st June, 2016.
- Apart from these, other relevant amendments have been made in Section 245A to ensure that “conclusion of proceedings shall be construed in accordance with the time specified for making assessment or reassessment under sub-section (1) of section 153. “
However, in order to make sure that the filing of revised returns ends with the close of the financial year, amendments have also been made in the sub-section (5) of Section 139 that will give the “provide that the time for furnishing of revised return shall be available up to the end of the relevant assessment year or before the completion of assessment, whichever is earlier.” The amendments mentioned above will be coming into effect from 1st April 2018.