Direct Tax Alert - The time limit for verification of ITR revised to 30 days

BACKGROUND

When a taxpayer is filing a tax return, he has an option to either digitally sign the tax return or e-verify it or submit the  duly signed ITR-V to CPC subsequently. The Central Board of Direct Taxes (CBDT) issued a Circular¹ in 2009 to notify the Income Tax Return (ITR) forms for Assessment Year 2009-10 and prescribed the manner of furnishing ITR. The said circular provided that once the ITR is filed online, the ITR-V should be sent to CPC, Bangalore within 30 days of uploading the return electronically. Subsequently, this limit of 30 days was extended to 120 days.

Recently, the CBDT has issued a Notification² to reduce this timeline back to 30 days. We, at BDO in India, have summarized this notification and provided our comments on the impact of the same hereunder:

What has changed

• The taxpayer shall be required to e-verify or submit ITR-V to CPC within 30 days from the date of uploading the tax return electronically. This new timeline applies to tax returns uploaded on or after 1 August 2022.
• The Notification clarifies that where the ITR is electronically uploaded before 1 August 2022, the earlier time limit of 120 days shall continue to apply in respect of such returns.

What will be the date of furnishing the ITR?

Sr. No.	ITR-V submission	Date of furnishing Tax Return
1	ITR-V submitted within 30 days of uploading ITR	Date of filing ITR to be considered as the date of furnishing tax return
2	ITR-V submitted post 30 days	Date of e-verification / ITR-V submission to be considered as the date of furnishing tax return

 

What are the consequences if the ITR-V is not submitted within 30 days?

Where the taxpayer fails to comply with the timeline requirement of submitting the ITR-V within 30 days after uploading the tax return, in such cases the date of e-verification/ITR-V submission shall be treated as the date of furnishing the tax return and all consequences of late filing of return under the Income Tax Act,1961 (IT Act) shall apply.

What is the mode of sending the ITR-V to CPC, Bangalore?

The verified ITR-V in the prescribed format and the prescribed manner should be sent by speed post only to the Centralised Processing Centre, Income Tax Department, Bengaluru - 560500, Karnataka.

Where the taxpayer sends the ITR-V to CPC, Bangalore, which date shall be considered for determining 30 days?

The date of dispatch of Speed Post of verified ITR-V shall be considered for the purpose of determination of 30 days period.

BDO COMMENTS

The taxpayers should take note of this important update. While the time limit has been reduced to 30 days for those tax returns filed from 1 August 2022 onwards, the ITR-V for tax returns filed on or before 31 July 2022 will continue to enjoy the time limit of 120 days. It may be noted that, unlike the earlier Notification which considered the date of receipt of ITR-V within 120 days by CPC Bangalore as sufficient compliance by the taxpayer, this Notification states that the date of dispatch of ITR-V via Speed Post shall be regarded for the purpose of determination of the period of 30 days since there could be adverse consequences of delay beyond 30 days. Hence, it is imperative that any taxpayer who wishes to send ITR-V to CPC - Bangalore, should retain the acknowledgement generated by Post Office. Further, unlike earlier where the tax return was regarded as a void tax return if the ITR-V is not received within time, this notification provides that it shall be deemed that the tax return is filed on the date of verification. Accordingly, the consequences related to the belated filing of a tax return shall follow. While the notification is silent on whether the tax return shall be void if the verification is not done, the tax authorities may consider a return as not filed if the ITR-V is not submitted within 30 days of the uploading the return or 31 December of the relevant financial year, whichever is later.

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