FILING OF INCOME TAX RETURNS

[DR.MARIAPPAN GOVINDARAJAN]

My client is the wife of deceased bank Manager who expired during November 2019. She received the death benefits of her husband to the tune of Re.1 crore. She did not file any return. The Department issued notice during March 2024 showing her fixed deposits in the bank and the said amount has escaped assessment. She filed reply through her auditor attaching the death certificate of her husband, the certificate of employer's showing the details of death benefits which are almost exempted. It was requested on the basis of the documents to withdraw the notice. When this matter comes to me I arranged to file the income tax return for the AY 2025-26. But the income tax return for the previous years could not be filed. What is the remedy in this case?

[Eshaan Singal]

The return can be filed in response to notice u/s 148 i.e. reassessment proceedings.

However, ITR-U can be filed u/s 139(8A), for AY 2022-23 and AY 2023-24, provided there must be tax liability.

[DR.MARIAPPAN GOVINDARAJAN]

Thank you.  I am going to file ITR U

AI Summary

Reassessment notice response and ITR U filing enable late regularisation where tax liability exists and proof supports exemption. A taxpayer receiving death benefits who failed to file earlier returns may file a return in response to a notice issued under reassessment proceedings under section 148; alternatively, where there is tax payable for prior years, ITR U under section 139(8A) permits filing for specified earlier assessment years. The use of ITR U is conditional on an actual tax liability, and documentary proof substantiating the exempt character of receipts should be placed on record in the chosen procedure.