CBDT allows taxpayers to regularise past I-T returns

The government has given an opportunity to taxpayers to regularise their old income-tax returns that they had filed electronically but could not get them validated by sending a duly signed physical copy by post to the Centralized Processing Centre (CPC) in Bengaluru by September 30, 2020.

This one-time relaxation is available to those taxpayers who could not get their tax returns validated from the assessment year 2015-16 to 2019-20, a finance ministry official said.

The Central Board of Direct Taxes (CBDT) on Monday issued a circular to this effect allowing validation of past returns either through online methods or by sending their signed copies to the CPC by post till September 30.

The circular said a large number of electronically filed income-tax returns (ITRs) are still incomplete pending their validation, without which they could be declared “non-est” (does not exist) in law.

“However, this relaxation shall not apply in those cases, where during the intervening period, Income-tax Department has already taken recourse to any other measure as specified in the Act for ensuring filing of tax return by the taxpayer concerned after declaring the return as non-est,” the circular said.

Rahul Garg, senior tax partner at consultancy firm PwC India, said this is an opportunity for the taxpayers to regularise their tax returns filed for various past years which had the risk of being considered as non-est for want of verification (signed Form ITR-V). “Once the returns are regularised it would save the taxpayer from penalty and prosecution that arises from non filing of the tax return,” he said.

According to Deloitte India partner Sudhakar Sethuraman, instances where taxpayer has missed this step of verification, the return filed is treated as invalid. He said, “Returns pending e-verification (from AY 2015-16 to 2019-2020) can be e-verified by the taxpayers by logging on the e-filing portal. Under the “My Account” tab they can select “e-verify return” and complete the process of e-verification. Alternatively, they can download the ITR-V’s sign the same with blue ink and send the hard copies to CPC Bangalore on or before 30.09.2020,” he said.

Pranjal Kamra, the CEO of legal and financial service firm Finology said ITR verification is an important step while filing income tax returns. “Therefore, CBDT’s one time relaxation is an opportunity for those individuals who have by any chance missed the verification previously,” he said.

The ITRs can also be verified through the e-verification modes such as using Aadhaar and one time password (OTP), net banking or bank ATM, he added.

“Taxpayers who could not verify their returns timely now have a sufficient window to do so. They must use this opportunity to make sure all past returns are duly verified, so they can be processed. If such compliance is not completed by 30th September, a notice may be sent to taxpayers for non-filing,” Archit Gupta, founder and CEO of ClearTax said.