Revise return

[Asked by Guest]

Amendment in Section 40(a)(ia) Dear Freinds, There has been a retrospective change in above said section,now for amount disallowed on account of deposit of TDS after March 2007 in our returns for the A/Y 2007-08 shall we show it as allowable in our current returns to be filed on or before 30th September 2008 (i.e in return of A/Y 2008-09) as we used to do in past or shall we revise A/Y 2007-08 return and allow the exp. in that year itself. Regards

[DEV KUMAR KOTHARI]

Amended is to remove certain difficulties and not to create more. Return of A.Y. 2005-06 , 2006-07 could be revised only by 31.03.07 or 3 or the date of completion of assessment if made earlier. Thus it is not possible to file revised return for these two years because the FA was passed after 31.03.08. A.Y. 2007-08 In case return was not filed before due date u/s 139 (1) or in terms of notice issued u/s 142 (1), then also it cannot be revised.Therefore it is impossible to give effect of amendments made vide the FA 2008 by revising return for A.Y. 2005-06 and 2006-07 and in case of late return { other than in response to notice u/s 142 (1)} for A.Y.2008-09. The amendment vide FA 2008 was brought to remove difficulties and not to create more difficulties. Claim should be made only in one year. Therefore if claim was not made in earlier year, due to non deposit of TDS, as per law then prevailing, it can be claimed in subsequent year when the tax is deposited. If the assessee gets more benefit by claiming deduction in earlier year by way of interest on refund, reduction of interest payable by assessee or in any other manner, the assessee can make claim by revising return, if permissible or filing rectification petition, taking additional grounds in appeal or in a revision petition as may be advisable in any given case. If assessee get more advantage by claiming such sums in a subsequent year ( e.g. in case of losses- so that life of loss is prolonged or when it is not prudent to disturb settled matter of earlier year), he can claim in subsequent year in which TDS is actually deposited.

[DEV KUMAR KOTHARI]

You can revise your return for A.Y. 2007-08 and can make a claim. Then you ccurtail your claim in A.Y. 2008-09 to that extent. You can take recorse of s. 154 and 264 also in A.Y. 2007-08. If an early allowance is beneficial. Or claim in A.Y. 2008-09, if not claimed in earlier year.

AI Summary

TDS deposit timing affects deductibility: claim deduction in the year tax is deposited or revise earlier return if permitted.
Amendment to Section 40(a)(ia) is subject to statutory revision and assessment bars; deductions disallowed for non-deposit of TDS can be claimed in the year the tax is actually deposited, unless a permissible revision or corrective remedy (such as rectification, appeal grounds or revision petition) is available to secure an earlier-year allowance. Claim must be made in one year only, and taxpayers should choose revision or subsequent-year claim based on which yields greater benefit.