A Comprehensive Guide on Section 139 of the Income Tax Act

Section 139 of the Income Tax Act consists of several provisions that guide an individual or non-individual taxpayer who fails to file the Income Tax Returns within the due date to file the same as per the instructions mentioned in sub-sections of Section 139.

Want to know more details about this Section? If yes, then keep reading!

What Are the Sub-sections of Section 139?

Go through the following sub-sections of Section 139 of the Income Tax Act 1961:

1. Section 139(1): Voluntary and Mandatory Income Tax Returns

This sub-section is valid for voluntary and mandatory Income Tax Returns and is applicable in the following situations:

Voluntary Returns

Entities or individual taxpayers who do not have to file Income Tax Returns mandatorily are considered voluntary returns that are valid tax returns as per the Income Tax Act.

Mandatory Returns

If the total annual income of a taxpayer is above the exemption threshold, then he or she needs to file an Income Tax Return within the due date.

Unlimited Liability Partnership, Limited Liability Partnership, and other eligible firms need to file an Income Tax Return.

Public, private, foreign, or domestic companies placed or operating businesses in India need to file an Income Tax Return.

If the total income of Body of Individuals, Association of Persons, and Hindu Undivided Family is more than the exemption limit, then such taxpayers need to file IT returns.

Residents owning an asset outside India or who have retained the right of their signature for an account located outside India shall need to file IT returns regardless of the tax liability applicable on those earnings.

Individuals must note that under Section 139(1)(c), there are specific categories of taxpayers eligible to enjoy exemption from filing ITR after meeting certain conditions.

After the issuance of the notice under Section 139(1c), it should be put before two Houses of Parliament when sessions are held for at least 30 days. Once both Houses agree and modify the notification, it will come into effect; else notification will become ineffective.

2. Section 139(3) – Filing ITR During Loss

This sub-section focuses on ITR if an entity or individual taxpayer incurs a loss in the previous fiscal year, and only individuals do not need to file the same.

Firms are liable to file an Income Tax Return under the following situations:

If a company experiences loss in income under 'Capital Gains' or 'Profits and Gains of Business and Professions', then it needs to file an ITR given the condition that it wants to adjust this loss with future income. This option is available when the ITR denoting loss is filed within the prescribed due date.

If a firm incurs a loss under 'House or Residential Property', it can carry forward this loss even if it filed an ITR after the due date.

If a firm wishes to adjust the loss with income from another category in a similar fiscal year, it can adjust the same even after filing ITR after the due date.

If a firm files a loss for income tax returns under Section 142(1), it cannot carry forward other losses except for loss incurred under 'House property.' However, firms can take forward unabsorbed depreciation in such cases.

Loss incurred in past years can be adjusted with future income if the firm had filed tax returns for those losses within the due date and were assessed.

3. Section 139(4): Late Filing of Income Tax Returns

This sub-section focuses on the late filing of income tax returns which contains the following provisions:

An assessee can file an ITR within 1 year from the end of the assessment year as per Section 144.

Taxpayers filing ITR after the due date are liable to pay a penalty of ₹ 5,000 as per Section 271F. Penalties are not applicable to tax returns that do not mandatorily require filing as per Section 139(1).

4. Section 139(4)(a): IT Returns of Charitable and Religious Trust

Taxpayers earning income from property owned by a public charity or a religious trust, partly or wholly, or receiving voluntary contributions as per the sub-section 2(24)(ii)(a) and the total income is more than the maximum exemption limit, shall need to file an ITR.

5. Section 139(4)(b): ITR by Political Parties

In case the earnings of a political party is more than the maximum exemption limit, it must file an Income Tax Return. The total income evaluated under this Section is devoid of Section 13(A) provisions.

6. Section 139(4)(c)

This sub-section deals with the institutions whose income is more than the maximum tax exemption limit. However, institutions enjoying other exemptions are not covered here.

Institutions that need to file ITR under this Section are-

Scientific research institutions

News agencies

Institutions stated under Section 10(23A) and Section 10(23B)

Hospitals, universities and other educational institutions

7. Section 139(4)(d)

Applicable for institutions, colleges, universities who are not liable to file ITR or loss under provisions in this Section.

8. Section 139(4)(f)

As per this sub-section, taxpayers need to furnish ITR for investment funds as mentioned under Section 115UB.

9. Section 139(5): Revised Income Tax Return

This sub-section is applicable when a taxpayer makes a mistake while filing initial tax returns. Take a look:

Suppose an entity or an assessee files their original income according to Section 139(1) conditions. In that case, they can file revised ITR for correcting or omitting any errors within 1 year after the conclusion of the given assessment year or before the end of an assessment, whichever comes earlier.

Late tax returns and intentional mistakes during filing ITR do not qualify for revision.

10. Section 139(9): Defective Income Tax Returns

If an assessee does not submit supporting documents while filing ITR, he or she can correct the same within 15 days of getting notified. However, a taxpayer can extend this limit of rectifying the same under specified conditions by forwarding a request.

How to File Defective IT Returns Under Section 139(9)?

Take a look at the following stepwise guide to file a defective income tax return under Section 13(9) of the Income Tax Act:

Step 1: Individuals need to log in with their credentials to the official website of the Income Tax Department.

Step 2: Choose the 'E-file' tab. If any notice related to defective returns is issued, it will be displayed. Now, taxpayers must select 'Submit' under the response tab to submit their response.

Step 3: If an Assessing Officer issues a notice related to a defective return, a different page will open after selecting 'E-file'.

Step 4: Choose an appropriate ITR form, upload an XML file and submit. Once completed, a message will appear.

Step 5: If a CPC issues a notice related to defective returns, a different page will display.

Step 6: Select 'Yes' or 'No' from the column available as 'Do you agree with the defect?' as per the requirement. Choose an appropriate ITR form and attach the relevant XML file.

Step 7: If the error code is 31 and individuals have opted 'No' in the option stated above, furnish additional data and submit. Select 'View' or choose 'Transaction' D' to see or know details of the submitted response respectively.

What Are the Error Codes Under Section 139?

Go through the following error codes that a taxpayer will receive for defective tax returns under Section 139 of the Income Tax Act:

Error Code 8

If an individual files ITR-4S when the total presumptive earning under Section 44AD is below 8% of gross receipts, then it is a defective return.

Error Code 14

When taxpayers furnish a negative Net Profit or Gross Profit section, it is a defective tax return.

Error Code 31

If an assessee makes an income under 'Profits and Gains of Businesses and Profession' and has not provided a Profit and Loss Account and Balance Sheet, it is a defective tax return.

Error Code 38

It applies to the tax that is payable as stated in the ITR but is not paid.

What Are the Due Dates to File ITR Under Section 139?

itr image — (source: thehindubusinessline)

Section 139 prescribes the following due dates within which taxpayers need to file their ITR:

31st July

This is valid for all the following taxpayers who do not need to perform an audit on their accounting books:

Salaried employee

Self-employed professional

Consultant or freelancer

30th September

This due date is valid for all following taxpayers and entities who need to perform an audit of their earnings:

Business entities

Consultant or a working partner in a corporation

Self-employed professional

What Is the Relation of ITR Form 7 with Section 139?

The Income Tax Department issues this ITR Form 7, and every entity, individual and institution needs to fill it to file ITR under sub-sections of 139(4)(b), 139(4)(a), 139(4d) and 139(4c). In this way, ITR Form 7 is related to Section 139.

Individuals can fill it in via:

Digital signature
Paper format
Bar code
The information, which is sent electronically followed by verification through ITR-V Form

With this, the article about Section 139 of the Income Tax Act comes to an end. Knowing about this Section's provisions will help taxpayers file ITR even after the expiry of the due date and remain tax compliant.

Frequently Asked Questions

✓ Are the due dates of filing ITR under Section 139 of the Income Tax Act extended?

Yes, the Government can extend the due dates under Section 139 of the Income Tax Act. For instance, 31st July can be extended up to 31st August. The Government can, at its discretion, extend 31st September as well.

✓ What is error code 38 under Section 139 of the Income Tax Act?

Error code 38 is applicable when the payable tax stated in the ITR is not paid.