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Weekend MCQ Self Challenge #0015 – Consequences in case of Return Filed After Due Date

Consequences in case of Return Filed After Due Date

 

Dear Professional Seniors & Friends,
Welcome to this wonderful weekend MCQ self challenge!

This weekend challenge is on special focus on consequences in case of return filed after due date having 5 MCQs to be self answered by participants to take self challenge. The detailed answer of these MCQs shall be posted on Monday for the self assessment of the participants. This post shall be of immense use of 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 has paid full tax liability of Rs 15,000 on 25th July 2017. What are the interest applicable assuming due date to file return is 31st July 2017 and no TDS, advance tax has been paid by him.

A) Interest under Section 234B & C will be applicable.
B) Interest under Section 234A will be applicable.
C) Both A and B.
D) None of the above.

Weekend MCQ 15.2: What if in the above question, Mr. X is having brought forward losses of business of Rs 50,000 from AY 2015-16?

(A) Loss of Rs 50,000 cannot be carried forward.
(B) Loss of Rs 50,000 cannot be carried forward but can be set off.
(C) Loss of Rs 50,000 cant 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 above question, Mr. X is having brought forward depreciation of Rs 75,000 from AY 2015-16?
(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 cant 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 above question, Mr. X is having brought forward losses of house property of Rs 90,000 from AY 2015-16?

(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 cant 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 carry forward of losses even after filing return after due date?

(A) Claim can be made to 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.

Sincere Regards

CA Sanjay Kumar Agrawal
Mobile: 9810116321

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Answer MCQ Self Challenge # Weekend Dhamaka

 

Dear Professional Seniors & Friends,

Warm Greetings!

 

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)

Answer to MCQ 15.2 : C)

Answer to MCQ 15.3 : D)

Answer to MCQ 15.4 : D)

Answer to MCQ 15.5 : C)

 

 

Practical Analysis for MCQ 15.1

 

  • It has been held by the Hon’ble Supreme Court in the case of CIT vs Prannoy Roy, 309 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 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, correct answer to MCQ 15.1 : A) Interest under Section 234B & C will be applicable as these are not based on return filing date but interest under Section 234A will not be applicable.

 

 

Practical Analysis for MCQ 15.2 to 15.4

 

  • Section 139(3) read with Section 80 provides that loss claimed in following sections shall not be carried forward and set off if Return of Income is filed after the due date i.e.
  • 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 restrict to 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 filed after due date.

 

  • Also the section put restriction on carry forward and set off for all nature of losses except losses from house property.

 

  • Based on the above analysis, correct answer to MCQ 15.2 : 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.

 

Practical Analysis for MCQ 15.5

  • Now that from the above MCQ, we have understand that losses of business cannot be carry forward and set off if the return is filed after due date.
  • Let us look 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 submiited to prinicipal 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 that the case is of genuine hardship on merits.
  • The applications/claims for amount 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 15.5 : (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 professional opinion; you can definitely have your own opinion.)

 

Sincere Regards

 

CA Sanjay Kumar Agrawal

Mobile: 9810116321

 

To access MCQ posts regularly, please Join Telegram Channel:
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