How to file Income Tax return when window to file the tax return is closed by Income Tax portal

Income Tax Return (ITR) is a formal document used by individuals and entities to report their total taxable income for a specified financial year. It serves as a declaration of income earned, deductions claimed, exemptions availed, and taxes paid. The ITR is essential for determining the taxpayer’s net tax liability, ensuring compliance with tax regulations for the relevant fiscal period. As per the income tax laws, it is compulsory to file income tax return if your income is more than the basic exemption limit. The income tax-rate is pre-decided for taxpayers.

Filing an ITR is a crucial responsibility for both individuals and business entities. It provides several benefits, both short-term and long-term, to ensure compliance with tax regulations, optimize finances, and even provide financial advantages. Here is the list of few benefits of filings ITR.

• ITR filing is mandatory for individual and businesses whose income exceeds the basic exemption limit. Non-filing leads to penalties, fines, etc.
• ITR filing is also necessary when excess tax paid or deducted through advance tax and TDS. Filing of return allows to claim refund of that amount.
• ITR filing on time you can carry forward any losses to subsequent year and set-off with future income which directly reduces your ax liability.
• ITR filing serves as proof of income which can be further used for applying loans, visas or government schemes. Bank often ask for ITR to verify the income.
• ITR filing often avoids unnecessary notices from income tax department regarding non-filing of return. Non-filers may attract unnecessary investigations and audits.

In India, the income tax filing deadline for individuals is typically July 31st of the assessment year, which is the year following the financial year in which the income was earned unless the date extended by the government. However, if an assessee who requires an audit, the due date extends to October 31^st of the assessment year. Assessee must report all income, claim eligible deductions, and ensure the accurate calculation of taxes owed. Additionally, individuals must link their Permanent Account Number (PAN) with their Aadhaar for smooth filing.

If an assessee fails to file their income tax return and the filing portal is closed, what should they do?

An assessee who has failed to file their respective ITR for the relevant assessment year and the window for filing the same is also closed on the income tax portal, then there are still options available to file income tax return.

1. File a Belated Return

If last date to file income tax return has expired, then assessee can file a belated return under section 139(4). The due date for filing the same is 31^st December  of the relevant assessment year, however beyond that ITR cannot be filed. Most of the people miss teactual deadline. The reason in most of the cases is that the individual assessee generally is not aware of it. It actually happens largely in NRIs cases where they have income taxable in India and TDS has also been deducted but have failed to file ITR. It results in loss of TDS refund which could have been claimed by filing the ITR. If an assessee files a belated return after the due date, they will be liable to pay late fee under Section 234F of the income tax act. The fee is ₹1,000 if the total income is up to ₹5 lakh, and ₹5,000 if the total income exceeds ₹5 lakh. Additionally, if there is any pending tax liability, the assessee is also required to pay interest under Sections 234A, 234B, and 234C of the income tax act.

2. Filing ITR with condonation of delay.

Another option with assessee to file ITR even if the last date of filing has been missed. Section 119 (2)(b) provides CBDT with power to authorize income tax authority to admit an application or claim of any refund after the expiry of period specified by the Act. To operationalize this provision, CBDT issued a circular (No.11/2024) dated 01.10.2024 vide F.No. 312/63/2023-OT which contains the comprehensive guidelines on the conditions for condonation of delay and the procedure to be followed for deciding such matters.

Here is the detailed procedure for those who find difficulties in filing delayed return, and whose TDS refund has been stuck due to anomalies of the law.

Stepwise procedure

Step-1:  File a manual application to the jurisdictional chief commissioner/principal chief commissioner of the income tax. You can check your jurisdiction in ‘My Profile’ under the tab ‘PAN details’. The application shall be properly addressed to the commissioner and shall contain all the material fact. There must be a valid reason for non-filing the ITR within the due date along with supporting documents. Also, attach a draft computation and mention the amount of refund along with supporting e.g. Form 26AS or Form 16/16A or tax payment challan etc.

Step-2:  After submitting an application as above, the jurisdictional commissioner or chief commissioner as the case may be, shall ask for the information regarding your claim. A notice will be issued by the department which can be accessed through ‘e-proceeding portal’ and a reply to the notice may also be submitted online.

Step-3: After due verification of all the information provided by the assessee, the commissioner or principal commissioner as the case may be, shall decide upon merit in accordance with law and shall pass an order under section 119(2)(b). The order will be available under ‘e-proceeding’ tab only and shall also be emailed on the registered email id of the assessee.

Step-4: After receiving such order, assessee may proceed with filling return as depicted in following images.

Select assessment year and ITR Form and under filing type select ‘u/s 119(2)(b). Thereafter, below screen will appear,

Attach the ITR XML and mention the order number and date of order and submit. The ITR will be filed. The ITR shall thereafter will be processed normally as if the return is filed u/s 139.

Following further points shall also be applicable under section 119(2)(b),

• If the amount of refund claim is not more than Rs. 1 crores for any one assessment year then the Principal Commissioner of Income tax/Commissioners of Income tax shall be vested with the power of acceptance or rejection of application/claim filed u/s 119(2)(b) of the act.
• If the refund claim is exceeds Rs. 1crore but is not more than Rs. 3 crores for any assessment year then Chief Commissioner of Income tax / shall have the power to accept or reject the application filed u/s 119(2)(b) of the act.
• If refund claim exceeds Rs. 3 crores then Principal Chief Commissioner shall have the power to accept or reject the applications filed under section of 119(2)b of the act.
• No condonation of application for cliam of refunds/loss cannot be filed after five years from the end of the assessment year for which such application/cliam is made. The time-limit for filing such application within five years from the end of the assessment year will be applicable for applications filed on or after 01.10.2024.
• The Commissioner of Income tax, Central Processing Centre (CPC), Bengaluru shall also be vested with power to accept or reject of petitions under section 119(2)(b) of the act seeking condonation in verifying the return of income by sending ITR-V to CPC, Bengaluru within the prescribed time.  
• The condonation application shall be disposed off by the competent authority within six months from the end of the month in which the application is received by the competent authority.
• In light of the amendment to Section 139(9A) of the Act via the Finance Act, 2024, the authorities’ powers to accept or reject applications within the prescribed monetary limits will be exercised in compliance with the conditions outlined. Specifically, while considering applications under Section 119(2)(b), it is essential to ensure that the assessee has been prevented by a reasonable cause from filing the return within the due date, and that the case represents genuine hardship or merits. Furthermore, the authorities will have the discretion to instruct the jurisdictional assessing officer to conduct necessary inquiries as per the Act’s provisions, ensuring that the application is adjudicated based on its merits and in accordance with the law.
• If the refund claim arisen consequent to a court order, the period for which any such proceedings were pending before any court of law shall be ignored while calculating the said period of five years, provided such condonation application is filed within six months from the end of the month in which the court order was issued or the end of financial year whichever is later. 
• A belated application for supplementary claim of refund i.e., claim of additional amount of refund after completion of assessment for the same year, can be admitted for condonation provided other conditions are fulfilled. Apart from above conditions, other conditions are also need to considered for filing the application.

• • The income of the assessee is not assessable in the hands of any other person under any of the provisions of the act.
  • No Interest will be admissible on belated claim of refunds.
  • The refund should be arisen as a result of excess TDS/TCS or excess advance tax or access self-assessment tax as per the provisions of the Act.

3. Updated Return  

A return of income that can be filed by an assessee within a period of 24 months from the end of the relevant assessment year, even if the assessee has not previously filed a return for that year. It is introduced in budget 2022 with the concept to encourage voluntary tax compliance by the assessee. An updated return can be filed by any person, except in certain circumstances of whether they have previously filed an original, belated, or revised return for the relevant assessment year.

When filing an updated return for any relevant assessment year (AY), it’s essential to consider several key factors to ensure compliance with tax laws and avoid penalties. Here are the main factors to take into account.

• Assessee who has either filed ITR within the due date or has not filed his ITR for an assessment year has an option to file an updated return within 24 months from the end of the relevant assessment year. As a result of filing the updated return, an additional amount of tax payment, government will receive.
• Assessee can also file updated ITR, assessee when filing the original return, reported income incorrectly, selecting wrong income head, reduction of carried forward loss, reduction of unabsorbed depreciation, apply wrong tax rate, reduction of tax credit under section 115 JB/115JC and any other reason.
• Assessee who had not filed original return and intends to file an updated return, then assessee must pay the tax due together with interest and late filing fee payable for delay in filing return along with the additional tax leviable on filing of the updated return. This return will also be considered as a proof of payment of applicable tax, additional tax, interest and late filing fee under section 234F of the Income tax act.
• Assessee who had already filed original return on or before due date but wants to file updated return, the assessee would be liable to pay tax due together with interest and late filing fee for delay in furnishing ITR along with additional tax for filing updated return. It may be further be noted that the amount of self-assessment tax along with interest paid in the earlier return would be reduced from the tax payable and the tax shall be increased by the amount of refund (if any) issued in respect of the earlier filed return.
• Additional tax on the updated return which can be either 25% or 50% of the tax amount, depending on the date of filing of such return. Additional tax payable at the time of furnishing updated return which shall be calculated as under: -.

• Assessee file the updated return online through login into the e-filing portal, click on the e-file and select “Income Tax Return” from the dropdown menu. In the “Income Tax Return” section, choose the relevant assessment year and select “Updated Return” as the return filing type. The portal will prompt the assessee to select the reason for filing the updated return, and a valid reason for amendment must be provided as per the provisions of Section 139(8A). Once the required details are filled in, including any new or corrected information, the taxpayer should review the form and submit it electronically. The assessee can pay any additional tax due, if applicable, and the updated return will be processed by the tax authorities. This option allows assessee to file return of income, if not filed and can also rectify errors or omissions in the original filed return and the same must be filed within 12 or 24 months from the end of the relevant assessment year.