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Section 139 Income Tax Act

Sec 139

Last Updated 27th Nov 2020

Section 139 of Income Tax Act, 1961 deals with the provisions of filing of Income Tax Returns. The key subsections of Section 139 are mentioned below:

Section 139(1) Mandatory and Voluntary Returns
Section 139(3) Filing Income Tax in case of Loss
Section 139(4) Late Income Tax Return
Section 139(5) Revised Return
Section 139(9) Defective Returns
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Section 139

Section 139 of Income Tax Act, 1961 deals with the provisions of filing of Income Tax Returns. According to this section, if any individual or firm or any other body has not filed the Income Tax Returns on the due date, the same can be filed as per guidelines mentioned in the section. There are various subsections of Section 139, dealing with dates for filing returns, prescribed time frame for filing late returns etc. which has been explained below:

Different Subsections under Section 139 of the Income Tax Act 1961

The key subsections of Section 139 are mentioned below:

  • Sec 139(1) – Mandatory and Voluntary Returns
  • Sec 139(3) – Filing Income Tax in case of Loss
  • Sec 139(4) – Late Income Tax Return
  • Sec 139(5) – Revised Return
  • Sec 139(4a) – Income Tax Return of Charitable and Religious Trusts*
  • Sec 139(4b) – Political Party to Furnish the Return on Income
  • Sec 139(4c) and Section 139(4d) – Income Tax Return of entities claiming Exemption under Section 10
  • Sect 139(4f)
  • Section 139(9) – Defective Returns

Section 139(1) - Mandatory and Voluntary Returns

Section 139(1) deals with mandatory and voluntary returns in the following scenarios:

  • If the total annual income earned by an individual exceeds the exemption limit, he/she is liable to file Income Tax Return within the prescribed due dates.
  • In the case of a private, public, a domestic or foreign company is located or doing business in India, they are required to file Income Tax.
  • Any firm, including LLP (Limited Liability Partnership) and Unlimited Liability Partnership, is also required to furnish Income Tax Return.
  • In case a resident who has an asset located outside India or has retained the signing authority for an account-based outside India has to file tax returns irrespective of the tax liability on those incomes.
  • If the taxpayer belongs to HUF (Hindu Undivided Family), AOP (Association of Persons) and BOI (Body of Individuals) and their total income exceeds the exemption limit then they are liable to file the Income Tax Return.
  • In the cases when the individuals or entities are not under the compulsory requirement to file the return, their tax filings are considered as Voluntary returns, which are seen as valid tax returns.

Section 139(3) – Filing Income Tax in case of Loss

Section 139(3) deals with the provisions of filing of Income Tax Returns in the case of loss by an individual or entity in the previous financial year. If an individual has incurred any loss, then he is not liable to file tax returns. However, companies and firms must file ITR in the following scenarios:

  • In case the firm has incurred loss under the head "Profits and Gains of Business and Profession" or 'Capital Gains' it is mandatory for the firm to file returns provided the firm wants to carry forward this loss. The same can be done only if the tax return indicating the loss is filed within the due date.
  • In case of loss arising under the head "House or residential Property" and the same is carried forward, the firms must file a tax return, and the same can be done after the due date.
  • Any losses except the loss under "House property", filed for return under Section 142(1) cannot be forward.
  • In case the loss is to be offset against some income in other categories for the same year, the same can be done even though the return is filed after the due date.

Section 139(4) – Late Filing Income Tax Return

According to Section 139(4), an individual or entity must furnish Income Tax Returns before the due dates as specified under Section 142(1). In case of failure to file the returns on the due date, the returns for the belated years can, however, be filed until the expiry date of the current financial year. If they are not able to file the return within the current assessment year, they will be charged with a penalty of ₹ 5,000, under Section 271F of IT Act 1961.

Section 139(5) - Revised Return

Section 139(5) deals with the provisions for the revised return of Income Tax Returns. According to it, if the Income Tax Return was filed within the due date but required correction owing to some error or omission in the filing of the return, the same can be submitted any time within one year after the relevant assessment year gets over or before the completion of the assessment, whichever is sooner. The tax payee can file revised tax returns within the specified time frame as many times he/she wants.

Once the revised return has been filed, the original return that was done under Section 139(1) is considered as withdrawn, and the revised return will be validated. Also, the return can be filled only for unintentional mistakes applicable to cases of 'Omissions and Wrong Statements', and in case of intentional errors or omissions and for any fraudulent filing, a penalty will be imposed on the taxpayer.

Section 139(4a) - Return of Charitable and Religious Trusts

In case an individual earns income from any property which is held under trust or legal obligation, partly or wholly for religious or charitable purposes has to file Income Tax Returns under Section 139(4A). The tax returns, which are otherwise referred to as voluntary contributions, have to be filed if it exceeds the maximum allowable amount which is not taxable under income-tax.

Section 139(4b)- Income Tax Returns by the Political Parties

Sec 139(4b) of the Income Tax Act, 1961 lays down the provisions for filing Income Tax Returns for all the political parties. According to it, if the total income exceeds the maximum allowable tax-exempt limit, they are required to furnish tax returns. Also, the total income computed under this act excludes the effects of provisions under Section 13A.

Section 139(4c) and Section 139(4d) - Exemption under Section 10

Section 139(4c) and Section 139(4d) deal with Income Tax Returns of the institutions that are allowed to get tax benefits under Section 10 of the Income Tax Act. As per the provisions of Section 139(4c), if the total income exceeds the permissible exemption limits, the specified institutions are required to file tax returns before the due date. On the other hand, according to Section 139(4d), universities, colleges, and institutions are not required to file Income Tax Returns in income and loss under any other provision in this section.

These are the institutions that are required to file Income Tax Returns under Section 139(4c).

  • Associations that are working in scientific research Associations or institutions covered under Section 10(23A)
  • News agencies
  • Institutions that are covered under Section 10(23B)
  • Hospitals, universities, medical institutes, and educational institutes

Section 139(4f)

According to the provisions of Section 139(4f), every investment fund is required to file Income Tax Returns as referred to in section 115UB. However, all other provisions of sections 139(1) related to Income or loss do not apply to these institutions.

Section 139(9) – Defective Returns

This section deals with the defective Income Tax returns filed by the taxpayers. If the taxpayer does not attach the relevant documents while filing returns, he/she can rectify the same within 15 days of receiving the intimation. In case of any specified circumstances, the same can, however, be extended by submitting a request through an application.

Due Dates for Section 139 Income Tax Act

The following dates have been prescribed for filing Income Tax Returns by different individuals, entities and institutions

  • July 31 – Any salaried or self-employed individual or professionals who do not require an audit for filing their returns have to file ITR by July 31. The date for filing the returns is however often extended by up to a month to August 31.
  • September 30 – All persons and entities, including self-employed individuals or professionals or working partners employed with a firm or consultant who is required to or is liable for an audit of their accounting books, must file their income tax returns by September 30 of every assessment year.

How is ITR Form 7 related to Section 139?

ITR-7 Form is Income Tax Return form applicable to all individuals and entities that are required to furnish tax returns applicable under different subsections of Section 139, including Sections 139(4a), 139(4b), 139(4c) and 139(4d). For filing the returns, ITR-7 form is submitted either in paper form or electronically using a digital signature or any other manner by matching the tax figures with Form 26AS, the Tax Credit Statement.

How to file a defective return under 139(9)?

In case of defective returns filed owing to missing of necessary information or documents, a notice is issued to the taxpayer under the law for tax return and revised returns are furnished within 15 days of receiving the intimation.

To file a defective return under 139(9), follow the below-mentioned steps:

  • Firstly, visit the official Income Tax website by clicking on http://www.incometaxindiaefiling.gov.in/.
  • Now, login with your User ID and Password and Date of Birth/Date of Incorporation.
  • Next, click on the E-File section in response to notice under section 139(9) and then on the submit button under the response column to submit your response.
  • In case of defective return by AO or CPU a different screen will be displayed as you click on the E-File section in response to notice under section 139(9).
  • Now, choose the relevant ITR form from the drop-down list, attach the XML file and then click on the submit.
  • To know the details of the response, click on the "Transaction Id".

Error Codes in Section 139 of Income Tax Act, 1961

According to the provisions of Section 139 of the Income Tax Act 1961, the different error codes for defective return notice have been mentioned below:

  • Error Code 14: Any negative amount in gross profit or net profit sections in ITR is treated as Defective Return.
  • Error Code 8: ITR is treated as Defective Return when the taxpayer file ITR-4S, in case the total presumptive income is less than 8% of Gross turnover or Gross Receipt.
  • Error Code 31: In case the taxpayer earns income under the head "Profits and Gains of Businesses and Profession", but the same is not filled under the Balance Sheet and Profit and Loss Account.
  • Error Code 38: In case the tax determined is payable for ITR but is not paid.

FAQs

What is Income Tax Section 139 (4)?

Section 139(4) deals with late filing Income Tax Returns. An individual or entity must furnish Income Tax Returns before the due dates as specified under Section 142(1). In case they fail to do so, the returns for the belated years can, however, be filed until the expiry date of the current financial year.

What is the seventh provision of Section 139 (1)?

According to the seventh provision of Section 139(1), any person undertaking high-value expenditures has to mandatorily file Income Tax Returns even if the person is entitled to exemptions from filing taxes.

Can a belated return of income filed u/s 139 (4) be revised?

According to Section 139(4), an individual or entity must furnish Income Tax Returns before the due dates as specified under Section 142(1). In case of failure to file the returns, the returns for the belated years can, however, be filed until the expiry date of the current financial year. If assesses are not able to file the return within the current assessment year, they will be charged with a penalty of ₹ 5,000

How do I fix defective returns?

In case of any defective returns, the revised returns can be filed as mentioned under Section 139 (4).

Will defective returns be revised?

Yes, any defective returns can be revised according to the provisions of Section 139(4). According to it, the revised returns must be filed within 15 days of receiving the intimation on the official website of ITR.

What is a defective return in income tax?

If there are any errors or any significant information or documents are not provided while filing the Income Tax Returns, it is considered as a defective return in Income Tax.

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