Revised Income Tax Returns - Post De-Monetisation of Currency

It is clarified by the Income Tax department that the provision to file a revised return of income u/s 139(5) of the Act has been stipulated for revising any omission or wrong statement made in the original return of income and not for resorting to make changes in the income initially declared so as to drastically alter the form, substance and quantum of the earlier disclosed income.

By Press Release, Dated 14 December 2016, Income tax department brought to the notice of taxpayer that any instance coming to the notice of Department which reflects manipulation in the amount of income, cash-in-hand, profits etc. and fudging of accounts may necessitate scrutiny of such cases so as to ascertain the correct income of the year and may also attract penalty/prosecution in appropriate cases as per provision of law.

Under Section 139 (5) of the Income Tax Act, 1961, Revised Return can only be filed if any person,

(i)                who has filed a return under Section 139(1) of the Act or

(ii)             in response to notice u/s 142(1), discovers any omission or any wrong statement therein.

Post demonetization of the currency on 8th November, 2016, some taxpayers may misuse this provision to revise the return-of-income filed by them for the earlier assessment year, for manipulating the figures of income, cash-in-hand, profits etc. with an intention to show the current year’s undisclosed income (including the unaccounted income held in the form of demonetized currency in current year) in the earlier return.