Move seen as major step towards paperless environment
The guidelines New return Form No 1, applicable to corporate taxpayers, is now required to be compulsorily filed electronically. However, if the corporate return is not digitally signed, it will be necessary to file the paper return by following a two-step procedure.
Kolkata , July 31
Income-tax circles apprehend that the introduction of mandatory electronic filing of corporate returns along with the new return forms may have been done in a hurried manner.
Senior tax practitioners, sharing the view, feel there has been distinct lack of preparedness, in general, in moving swiftly towards total e-filing of I-T returns.
It is, however, acknowledged by the tax experts that the new income-tax forms have been thoughtfully designed to do away with all kinds of attachments and facilitate electronic filing. Form No I and Form 2 are for combined return of income and fringe benefits.
In short, the department has taken the first major step towards a paperless environment, feels one top tax lawyer.
The new return Form No 1, applicable to corporate taxpayers, is now required to be compulsorily filed electronically.
However, if the corporate return is not digitally signed, it will be necessary to file the paper return by following a two-step procedure:
First, the returns and the schedules thereto must be transmitted electronically (without digital signature) to the department's Web site and the acknowledgement number and the date of electronic transmission issued by the I-T department should be entered in the certificate below the verification of the return, after which it should be filed with the department.
The software for electronic filing of returns in Form No 1, 2, 3 and Form No 3B will be available on the Web site only from the middle of September.
The new return forms are now available on the department's Web site (incometaxindiafiling.gov.-in).
According to Mr Narayan Jain, senior tax advocate and Guest Faculty at WB NUJS, it is now mandatory, as per fourth proviso to Section 139 (1) of I-T Act, to file a return with effect from assessment year 2006-07, even though there was a perception among senior officers of the I-T department that it was not mandatory to accept a non-taxable return.
Apex court clarification
He said the apex court had amply clarified that a return was not a mere scrap of paper. "It is a return such as the assessee considers represents his true income and cannot be ignored."
The extension of due date for furnishing returns of income and fringe benefits (to October 31, 2006) for all non-corporate assessees (including partners of firms and charitable trusts and institutions), according to department sources, has been allowed mainly to enable the taxpayers to fully familiarise themselves with the new return forms.