Understanding Consequences In Case Of Return Filed After Due Date

WEEKEND MCQ SELF CHALLENGE #0015 - CONSEQUENCES IN CASE OF RETURN FILED AFTER DUE DATE

Dear Professional Seniors & Friends,

Welcome to this wonderful weekend MCQ self challenge!

This weekend's challenge is on special focus on consequences in case of return filled after the due date having 5 MCQS to be self-answered by participants to take a challenge. The detailed answers to these MCQs shall be posted by our tax consultant in Gurgaon on next day for the self-assessment of the participants. This post shall be of immense use to the participant.

Weekend MCQ 15.1: Mr. X aged 55 years having income from house property filed the return for AY 2017-18 on 30th October 2017. However, he paid full tax liability of Rs 15,000 on 25th July 2017. What is the interest applicable assuming the due date to file the return is 31st July 2017 and no TDS, or advance tax has been paid by him?

A) Interest under Sections 2348 & C will be applicable.

8) Interest under Section 2344 will be applicable.

C) Both A and B.

D) None of the above

Weekend MCQ 15.2: What if in the above question? Mr.Xis has brought forward losses of business of Rs 50,000 from AY 2015-167

(A) A loss of Rs 50,000 cannot be carried forward.

(8) A loss of Rs 50.000 cannot be carried forward but can be set off.

(C) Loss of Rs 50,000 can't be carried forward and set off.

(D) Loss of Rs 50,000 can be carried forward and set off.

Weekend MCQ 15.3: What if in the above question, Mr. X has brought forward depreciation of Rs 75,000 from AY 2015-167

(A) Depreciation of Rs 75,000 cannot be carried forward.

(B) Depreciation of Rs 75.000 cannot be carried forward but can be set off.

(C) Depreciation of Rs 75,000 can't be carried forward and set off.

(D) Depreciation of Rs 75,000 can be carried forward and set off

Weekend MCQ 15.4: What if in the above question, Mr. X has brought forward losses of house property of Rs 90,000 from AY 2015-167

(A) House Property Loss of Rs 90,000 cannot be carried forward.

(B) House Property Loss of Rs 90,000 cannot be carried forward but can be set off.

(C) House Property Loss of Rs 90,000 can't be carried forward and set off.

(D) House Property Loss of Rs 90,000 can be carried forward and set off

Weekend MCQ 15.5: Which among the following is not correct in relation to carrying forward losses even after filing a return after the due date?

(A) Claim can be made to the proper officer to carry forward loss if the delay is genuine.

(B) Claim can be filed within a period of 6 years.

(C) Claim in excess of Rs 50 lakhs shall not be entertained at any level.

(D) All of the above.

Answer MCQ Self Challenge # Weekend Dhamaka

This post of MCQ is on the provisions relating to consequences in case of return filed after due date

Answer to MCQ 15.1: A)

Practical Analysis for MCQ 15.1

• It has been held by the Hon'ble Supreme Court in the case of CIT vs Pranoy Roy, 308 ITR 231 (2009) that the interest under section 234A of the Act on default in furnishing return of income shall be payable only on the amount of tax that has not been deposited before the due date of filing of the income-tax return
• CBDT also reviewed the same order of the High court and it was confirmed vide Circular No: 02/2015 dated 10th Feb 2015 that no interest under section 234A of the Act is chargeable on the amount of self-assessment tax paid by the assessee before the due date of filing of return of income
• Based on the above analysis, the correct answer to MCQ 151 A) Interest under Section 2348 & C will be applicable as these are not based on the return filing date but interest under Section 234A will not be applicable.
  

Answer to MCQ 15.2: C)

Answer to MCQ 153: D)

Answer to MCQ 15.4:D)

Practical Analysis for MCQ 15.2 to 15.4

• Section 199(3) read with Section 80 provides that loss claimed in the following sections shall not be carried forward and set off Return of Income is filed after the due date ie
• Section 72-Losses of Business
• Section 73-Losses in Speculation Business
• Section 73A - Losses of Specified Business
• Section 74 - Losses of Capital Gains
• Section 74A-Losses of Other Sources
  
• Point here to note is that the section restricts carry forward and set off of losses only and does not in any way restrict the unabsorbed depreciation. So unabsorbed depreciation can be carry forward and set off even if the return is fed after the due date.
  
• Also the section put restrictions on carry forward and set off for all nature of losses except losses from house property.
  
• Based on the above analysis. the correct answer to MCG 152 C) Loss of Rs 50.000 can't be carried forward and set off.
  
• Correct answer to MCQ 15.3: D) Depreciation of Rs 75.000 can be carried forward and set off.
  
• Correct answer to MCQ 15,4: D) House Property Loss of Rs 90,000 can be carried forward and set off.
  

Answer to MCQ 15.5: C)

Practical Analysis for MCQ 15.5

• Now that from the above MCQ we understand that losses of business cannot be carried forward and set off if the return is tied after the due date.
• Let us look at a section of Income Tax 119(2)(b) which provides condonation of delay in filing refund claim and claim of carry forward losses.
• The said section is well supported by department circular 9/2015 dated 9/6/15 which provides as follows-
• Application for condonation of delay in filing return can be submitted to principal officer within 6 years from the end of AY for which such application is made.
• Application will be accepted if the loss declared is correct and genuine and also if the case is of genuine hardship on merits.
• The applications/claims for amounts exceeding Rs 50 lakhs shall not be considered by the proper officer but can be considered by the board.
• Based on the above analysis correct answer to MCQ 155: (C) Claim in excess of Rs 50 lakhs shall not be entertained at any level.

(Disclaimer: The objective of the MCQ post is just to discuss the concept, it may happen, by change of facts, the answer may be different. Please do not treat this as a professional opinion; you can definitely have your own opinion.)

Sincere Regards

CA Sanjay Kumar Agrawal

Mobile: 9810116321