It is every taxpayer's endeavor to file the tax return within the due date specified. However, there are occasions when due to certain contingencies the deadline for filing the income tax return is missed.

For such cases, the Income Tax Act, 1961 (the Act) permitted filing of a belated income tax return on or before the expiry of 24 months from the last date of the financial year.

Illustratively, a belated return for financial year ended 31 March 2016 is permitted to be filed on or before 31 March 2018. A penalty of INR 5,000 can however be levied under section 271F of the Act for the delay in filing the return of income, where the return of income is filed after 12 months from the end of the relevant financial year (in addition to any interest due under section 234A for delay in furnishing the income tax return and under sections 234B and 234C for delay in payment of advance tax).

Amendment by Finance Act, 2016
However, the taxpayers would now need to be mindful of the following amendments made vide Finance Act, 2016 which would be applicable to the filing of the belated income tax return for financial year ended 31 March 2017:-

Section 139(4) of the Act, which deals with filing of a belated income tax return, has been amended to provide that a belated income tax return can now only be filed on or before the expiry of 12 months from the last date of the financial year, as against 24 months permitted earlier. The said amendment is applicable from financial year ended 31 March 2017 and onwards.

In view of the said amendment, taxpayers who have not yet filed a return for financial year ended March 2017 should note that they now have only up till 31 March 2018 to file a belated return and should therefore initiate the process for filing the income tax return swiftly. Penalty of Rs. 5,000 under section 271F of the Act is triggered if the return is filed after 12 months from the end of the financial year. As the due date for filing the belated return has been reduced to 12 months, if the belated return for year ended 31 March 2017 is filed on or before 31 March 2018, then the provision of section 271F would not be apply. Accordingly, there should be no penalty leviable under section 271F of the Act on filing the said belated return on or before 31 March 2018. However, there would be applicable interest due under sections 234A, 234B and 234C of the Act if there was any short payment of advance tax or there is any tax still due.

Belated return can be revised
Section 139(5) of the Act, which deals with filing of revised return, has been amended to provide that a belated return can now be revised. This is a noteworthy relief to the taxpayer and the said amendment is applicable from financial year ended 31 March 2017 and onwards.

In view of the said amendment, if a belated return for financial year ended 31 March 2017, has been filed by 31 March 2018 a taxpayer should be able to revise the return.

Amendment by Finance Act, 2017
The Finance Act, 2017 has however further amended the provisions of section 139(5) of the Act to provide that a revised return can be filed only on or before the expiry of 12 months from the last date of the financial year, as against 24 months permitted earlier. Circular No. 2 of 2018 issued by Central Board of Direct Taxes (CBDT) dated 15 February 2018 in paragraph 60.13 has clarified that the above amendment by Finance Act, 2017 would be applicable from financial year ended 31 March 2018 and subsequent years. The Memorandum explaining the proposals of Finance Bill, 2017 wherein the said amendment was proposed by the Finance Minister also specified that amendment is proposed to be applicable from financial year ended 31 March 2018 and subsequent years.

Considering the clarification from the CBDT a view is tenable that for financial year ended 31 March 2017, once a belated return is filed, the said return could be revised on or before 31 March 2019.

In view of the mandatory requirement to e-file the income tax return, it is hoped that the income tax department would keep the facility open for filing the revised return for financial year ended 31 March 2017, till 31 March 2019 keeping in mind the legislative intent of the amendment.

In a nutshell, taxpayers who have not yet filed their income tax return for financial year ended 31 March 2016 and for the financial year ended 31 March 2017 need to act fast so as not to miss the approaching deadline to file belated returns. Also to note is that a revised return for the financial year ended 31 March 2016 is also due to be filed on or before 31 March 2018.