Latest news with #KumarMadaan
Time of India
01-07-2025
- Business
- Time of India
You can know what final income tax scrutiny order contains even before it is issued
What did CA post on X about the current Income Tax Scrutiny process? Can you actually see the final order before it is issued? What is Income Tax Scrutiny? The Income Tax Department recently highlighted a Chartered Accountant 's post on X regarding the working of the current income tax scrutiny process. The Income Tax Department stated that the post by the CA highlights the transparency and accountability measures in place, such as selection of only a minuscule percentage of cases for scrutiny, DIN-based verifiable notices, the faceless assessment system, ample opportunity for taxpayers to present their cases, and taxpayer safeguards in the form of High-Pitched Assessment Committees to the post on X, Pradeep Goyal, a chartered accountant, said the following:Scrutiny is conducted every year for very small % of total returns filed. Notices are issued under DIN so no scope of sending fake notices in order to blackmail you. Check the authenticity of the notice using DIN at the are two types of selection- CASS & Compulsory (limited or full).Most of the cases are under limited scrutiny wherein officers limit herself to those specific is conducted in a totally faceless manner and no scope of bribe and harassment. You will get ample opportunities to reply. Draft order will be issued before final pitched assessment committee is there whom you can approach if unjustified additions are post by the CA further stated, 'Don't pay money in the name of officers to anyone. Scrutiny is totally faceless and assessing officers are unknown for everyone. Assessment is conducted by assessment units.'One of the interesting points is that the taxpayer will know that the final scrutiny assessment order is contained even before it is issued. This is because the Income Tax Department will issue a draft order before the final Kumar Madaan, a practising chartered accountant, says, 'Under the faceless assessment regime, the Income-tax Department is required to issue a draft assessment order or show cause notice where any variation prejudicial to the interest of the assessee is proposed. This provision ensures that the assessee is afforded a fair opportunity to respond before the final order is passed. It is a welcome safeguard aligned with the principles of natural justice. The law mandates that a reasonable opportunity of being heard must be provided to the assessee. Upon receipt of the show cause notice or draft assessment order, the assessee (or their authorised representative) may also request a personal hearing, including the option to make oral submissions through video conferencing before the designated income-tax authority or unit.'Adding further, he said, 'Failure to grant such an opportunity for personal hearing, particularly when requested, may amount to a violation of the principles of natural justice and could render the assessment order susceptible to legal challenge. However, in practice, it is often observed that Assessing Officers (AOs), having already formed a predetermined view at the stage of the draft order or show cause notice, proceed to finalise the assessment without adequately considering the assessee's objections. This undermines the very objective of the provision and compels the assessee to seek appellate recourse against such final assessment orders.''This trend is contributing to a substantial buildup of cases before the Commissioner of Income-tax (Appeals), further straining the already burdened appellate machinery. With significant delays in the disposal of appeals at the CIT(A) level, genuine taxpayers are often left waiting for years to obtain relief. Further, a primary procedural concern arises from the timing of these notices. In many instances, show cause notices and draft orders are issued toward the end of the limitation period for completing the assessment, thereby leaving insufficient time for meaningful engagement by both the AO and the assessee. This last-minute approach compromises the quality of the assessment and defeats the intended objective of a fair, participative, and transparent process,' the CA he said, 'There is a pressing need to institutionalise timely and continuous communication between the Department and the assessee throughout the assessment cycle, rather than deferring critical interactions to the final days before the time bar.'The Income Tax Department issues notices under Section 143(2) to the taxpayer when his/her income tax return is selected for scrutiny assessment. The income tax notice can also be issued under Section 143(3) for a detailed assessment or detailed assessment is carried out to confirm the correctness and genuineness of various claims, deductions, etc., made by the taxpayer in income tax return. The objective of this scrutiny assessment is to ensure that you have filed the tax return with the correct income and paid the tax accordingly.
Economic Times
20-05-2025
- Business
- Economic Times
CBDT notifies ITR-U: Know who can file updated return, penalty, last date to file
The Central Board of Direct Taxes (CBDT) has notified the Income Tax Updated Return form, commonly called the ITR-U form. The new form has been notified as Budget 2025 amended the rules for filing ITR-U. The new filing rules are effective from April 1, per the new rules, ITR-U can be filed within 48 months from the end of the relevant assessment year. Earlier, taxpayers were allowed to file the updated return within 24 months from the end of the relevant assessment year. Now, taxpayers get an extra two years to file updated returns. Also read: 9 changes in ITR-1, ITR-2, ITR-3, ITR-4 for ITR filing 2025Tarun Kumar Madaan, Practising Chartered Accountant, says, "The revised ITR-U is a progressive step by the CBDT to promote voluntary tax compliance, enabling taxpayers to update their income for up to four years (48 months) from the end of the relevant assessment year. The Finance Act, 2025, has amended Section 139(8A) to extend the time limit for filing an updated return from 24 months to 48 months, effective from 01-04-2025. Accordingly, in the financial year 2025–26, a taxpayer can file updated returns for Assessment Years 2021–22 to 2024–25."The income tax rules specify the conditions under which a taxpayer can file the updated return. The tax return using ITR-U can be filed regardless of whether the taxpayer filed an ITR in the relevant assessment year. If the ITR is filed in the relevant assessment year, then the taxpayer is required to provide the acknowledgement number of the original ITR. Some of the conditions for filing ITR-U are income not reported correctly, ITR not filed previously, wrong heads of income chosen, wrong tax rate, etc. ITR-U cannot be filed if it leads to reduced income or a claim for an income tax refund. The income tax rules specify that ITR-U can be filed after the end of the relevant assessment year. The financial year 2024-25 ends on March 31, 2025. According to the updated return filing rules, ITR-U can be filed within 48 months of the end of the assessment year. The assessment year is the year in which the assessment of income earned in the previous fiscal year (a year ago) is done. This is done by filing an income tax return. The income earned between April 1, 2024 and March 31, 2025, is assessed between April 1, 2025 and March 31, 2026. Hence, for FY 2024-25, the assessment year (AY) is 2025-26. Madaan says, "The normal deadline for submitting an original Income Tax Return (ITR) for non-audit cases is 31 July of the relevant assessment year. If this deadline is missed, taxpayers can still file a belated return until 31 December of the same assessment year. However, once this window closes, the only remaining option is to submit an updated return (ITR-U). From January 1 onwards, updated returns become the sole available route for compliance. To facilitate this, the Income Tax Department updates its utility each year to enable the filing of ITR-U from January. Effective from 1 April 2025, the time limit to file an updated return has been extended to 48 months from the end of the relevant assessment year." He explains this with an example. For example, for the financial year 2024–25 (assessment year 2025–26), the original return can be filed until 31 July 2025; the belated return until 31 December 2025; and if both are missed, an updated return can be filed anytime from 1 January 2026 to 31 March 2030. However, this extended window is subject to conditions and restrictions under the Income Tax Act. Filing an updated return is not permitted in certain scenarios, such as when the return reflects a total income as a loss, resulting in a reduced tax liability, or leads to an increased refund, etc." According to income tax rules, the last date to file ITR-U is 48 months from the end of the relevant fiscal year. Hence, for AY 2025-26, the last date to file ITR-U is March 31, 2030. A penalty applies to filing an updated return using ITR-U, depending on how quickly the ITR is filed. Madaan says, "This extended window allows taxpayers to rectify past omissions, supporting the government's objective of improved compliance without prolonged litigation. The additional tax payable on updated returns has also been revised, with rates of 25%, 50%, 60%, and 70% applicable in the first, second, third, and fourth years, respectively." According to income tax rules, 25% of an additional tax on aggregate tax and interest is levied if the updated ITR is filed within 12 months from the end of the assessment year. This will hike to 50% as an additional tax if the updated return is filed between 12 months and 24 months. If the updated return is filed between 24 months and 36 months, then 60% as an additional tax is payable by the taxpayer. For updated returns filed between 36 months and 48 months, 70% of the additional tax is payable by the taxpayer.A taxpayer is required to select the period during which ITR-U is filed from the drop-down once filed must be verified as well.
