Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live and central to the assessment machinery. Section 139 prescribes who must file a return, by when, and in what form, and contains the regimes for belated returns (139(4)), revised returns (139(5)), loss returns (139(3)), defective returns (139(9)) and the updated return (139(8A)).
FA 2026: Finance Act, 2026 widens section 139(8A): an updated return may now be furnished even where the taxpayer reduces the amount of loss claimed in the original return-of-loss (previously the updated-return facility was confined to declaring additional income). A parallel amendment appears in the Income-tax Act, 2025.
Recent amendments: Finance Act, 2025 extended the time-limit for filing an updated return to 48 months (from 24 months) from the end of the relevant assessment year, with a graduated additional tax. Section 139(1) carries provisos that compel a return where prescribed high-value conditions are met (large electricity spend, foreign travel, deposits, turnover-linked thresholds).
A. SECTION COMMENTARY
Section 139 is the gateway to the entire assessment code. Sub-section (1) casts the primary obligation: every company and firm must file a return irrespective of income, and every other person whose total income (or the income of another person assessable in his hands) exceeds the maximum amount not chargeable to tax must file on or before the due date. The provisos to sub-section (1) extend the net to persons satisfying prescribed economic tests even where income is below the exemption limit.
Sub-section (3) governs the return of loss: a person who wishes to carry forward business loss, speculation loss, capital loss or loss from owning and maintaining race horses must file within the due date under sub-section (1), the carry-forward of such losses being controlled by sections 80 and 139(3) read with the head-wise provisions. Sub-section (4) permits a belated return up to the end of the relevant assessment year or before completion of assessment, whichever is earlier. Sub-section (5) permits a revised return within the same outer limit where the assessee discovers an omission or wrong statement. Sub-section (9) deals with defective returns and the opportunity to cure the defect.
Sub-section (8A), inserted by the Finance Act, 2022, introduced the updated return — a self-correction facility allowing a taxpayer to file or revise a return on payment of additional tax. The window has been progressively widened (to 48 months by the Finance Act, 2025) and, by the Finance Act, 2026, extended to permit a reduction in the loss claimed, a situation earlier excluded by the proviso to sub-section (8A).
Key litigation themes
The principal judicial battlegrounds under section 139 are: (i) whether a claim not made in the return can be entertained otherwise than by a revised return; (ii) the interaction between the belated-return time-limit in 139(4) and prosecution under section 276CC; (iii) the conditions for carry-forward of loss where the return is late; and (iv) the curability of defects. These are addressed in the authorities below.
B. STATUTORY POSITION (verbatim text)
Reproduced from the local Act (base text to the Finance Act, 2025). Section 139 is lengthy; the full text of all sub-sections, provisos and Explanations is set out below as printed.
139. (1) Every person,—
(a) being a company or a firm; or
(b) being a person other than a company or a firm, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed :
Provided that a person referred to in clause (b), who is not required to furnish a return under this sub-section and residing in such area as may be specified by the Board in this behalf by notification in the Official Gazette, and who during the previous year incurs an expenditure of fifty thousand rupees or more towards consumption of electricity or at any time during the previous year fulfils any one of the following conditions, namely :—
(i) is in occupation of an immovable property exceeding a specified floor area, whether by way of ownership, tenancy or otherwise, as may be specified by the Board in this behalf; or
(ii) is the owner or the lessee of a motor vehicle other than a two wheeled motor vehicle, whether having any detachable side car having extra wheel attached to such two-wheeled motor vehicle or not; or
(iii) ***
(iv) has incurred expenditure for himself or any other person on travel to any foreign country; or
(v) is the holder of a credit card, not being an "add-on" card, issued by any bank or institution; or
(vi) is a member of a club where entrance fee charged is twenty-five thousand rupees or more, shall furnish a return, of his income during any previous year ending before the 1st day of April, 2005, on or before the due date in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed :
Provided further that the Central Government may, by notification in the Official Gazette, specify the class or classes of persons to whom the provisions of the first proviso shall not apply :
Provided also that every company or a firm shall furnish on or before the due date the return in respect of its income or loss in every previous year :
Provided also that a person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of section 6, who is not required to furnish a return under this sub-section and who at any time during the previous year,—
(a) holds, as a beneficial owner or otherwise, any asset (including any financial interest in any entity) located outside India or has signing authority in any account located outside India; or
(b) is a beneficiary of any asset (including any financial interest in any entity) located outside India, shall furnish, on or before the due date, a return in respect of his income or loss for the previous year in such form and verified in such manner and setting forth such other particulars as may be prescribed:
Provided also that nothing contained in the fourth proviso shall apply to an individual, being a beneficiary of any asset (including any financial interest in any entity) located outside India where, income, if any, arising from such asset is includible in the income of the person referred to in clause (a) of that proviso in accordance with the provisions of this Act:
Provided also that every person, being an individual or a Hindu undivided family or an association of persons or a body of individuals, whether incorporated or not, or an artificial juridical person, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year, without giving effect to the provisions of clause (38) of section 10 or section 10A or section 10B or section 10BA or section 54 or section 54B or section 54D or section 54EC or section 54F or section 54G or section 54GA or section 54GB or Chapter VI-A exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed:
Provided also that a person referred to in clause (b), who is not required to furnish a return under this sub-section, and who during the previous year—
(i) has deposited an amount or aggregate of the amounts exceeding one crore rupees in one or more current accounts maintained with a banking company or a co-operative bank; or
(ii) has incurred expenditure of an amount or aggregate of the amounts exceeding two lakh rupees for himself or any other person for travel to a foreign country; or
(iii) has incurred expenditure of an amount or aggregate of the amounts exceeding one lakh rupees towards consumption of electricity; or
(iv) fulfils such other conditions as may be prescribed, shall furnish a return of his income on or before the due date in such form and verified in such manner and setting forth such other particulars, as may be prescribed.
Explanation 1.—For the purposes of this sub-section, the expression "motor vehicle" shall have the meaning assigned to it in clause (28) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988).
Explanation 2.—In this sub-section, "due date" means,—
(a) where the assessee other than an assessee referred to in clause (aa) is—
(i) a company; or
(ii) a person (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force; or
(iii) a partner of a firm whose accounts are required to be audited under this Act or under any other law for the time being in force or the spouse of such partner if the provisions of section 5A applies to such spouse, the 31st day of October of the assessment year;
(aa) in the case of an assessee, including the partners of the firm or the spouse of such partner (if the provisions of section 5A applies to such spouse), being such assessee, who is required to furnish a report referred to in section 92E, the 30th day of November of the assessment year;
(b) in the case of a person other than a company, referred to in the first proviso to this sub-section, the 31st day of October of the assessment year;
(c) in the case of any other assessee, the 31st day of July of the assessment year.
Explanation 3.—For the purposes of this sub-section, the expression "travel to any foreign country" does not include travel to the neighbouring countries or to such places of pilgrimage as the Board may specify in this behalf by notification in the Official Gazette.
Explanation 4.—For the purposes of this section "beneficial owner" in respect of an asset means an individual who has provided, directly or indirectly, consideration for the asset for the immediate or future benefit, direct or indirect, of himself or any other person.
Explanation 5.—For the purposes of this section "beneficiary" in respect of an asset means an individual who derives benefit from the asset during the previous year and the consideration for such asset has been provided by any person other than such beneficiary.
Explanation 6.—For the purposes of this sub-section,—
(a) "banking company" shall have the meaning assigned to it in clause (i) of the Explanation to section 269SS;
(b) "co-operative bank" shall have the meaning assigned to it in clause (ii) of the Explanation to section 269SS.
(1A) Without prejudice to the provisions of sub-section (1), any person, being an individual who is in receipt of income chargeable under the head "Salaries" may, at his option, furnish a return of his income for any previous year to his employer, in accordance with such scheme as may be specified by the Board in this behalf, by notification in the Official Gazette, and subject to such conditions as may be specified therein, and such employer shall furnish all returns of income received by him on or before the due date, in such form (including on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media) and manner as may be specified in that scheme, and in such case, any employee who has filed a return of his income to his employer shall be deemed to have furnished a return of income under sub-section
(1), and the provisions of this Act shall apply accordingly.
(1B) Without prejudice to the provisions of sub-section (1), any person, being a company or being a person other than a company, required to furnish a return of income under sub-section (1), may, at his option, on or before the due date, furnish a return of his income for any previous year in accordance with such scheme as may be specified by the Board in this behalf by notification in the Official Gazette and subject to such conditions as may be specified therein, in such form (including on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media) and in the manner as may be specified in that scheme, and in such case, the return of income furnished under such scheme shall be deemed to be a return furnished under sub-section (1), and the provisions of this Act shall apply accordingly.
(1C) Notwithstanding anything contained in sub-section (1), the Central Government may, by notification in the Official Gazette, exempt any class or classes of persons from the requirement of furnishing a return of income having regard to such conditions as may be specified in that notification.
(3) If any person who has sustained a loss in any previous year under the head "Profits and gains of business or profession" or under the head "Capital gains" and claims that the loss or any part thereof should be carried forward under sub-section (1) of section 72, or sub-section (2) of section 73, or sub-section (2) of section 73A or sub-section (1) or sub-section (3) of section 74, or sub-section (3) of section 74A, he may furnish, within the time allowed under sub-section (1), a return of loss in the prescribed form and verified in the prescribed manner and containing such other particulars as may be prescribed, and all the provisions of this Act shall apply as if it were a return under sub-section (1).
(4) Any person who has not furnished a return within the time allowed to him under sub-section (1), may furnish the return for any previous year at any time before three months prior to the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.
(4A) Every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes, or of income being voluntary contributions referred to in sub-clause (iia) of clause (24) of section 2, shall, if the total income in respect of which he is assessable as a representative assessee (the total income for this purpose being computed under this Act without giving effect to the provisions of sections 11 and 12) exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).
(4B) The chief executive officer (whether such chief executive officer is known as Secretary or by any other designation) of every political party shall, if the total income in respect of which the political party is assessable (the total income for this purpose being computed under this Act without giving effect to the provisions of section 13A) exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and all the provisions of this Act, shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).
(4C) Every—
(a) research association referred to in clause (21) of section 10;
(b) news agency referred to in clause (22B) of section 10;
(c) association or institution referred to in clause (23A) of section 10;
(ca) person referred to in clause (23AAA) of section 10;
(d) institution referred to in clause (23B) of section 10;
(e) fund or institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) or any university or other educational institution referred to in sub-clause (iiiab) or sub-clause (iiiad) or sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (iiiac) or sub-clause (iiiae) or sub-clause (via) of clause (23C) of section 10;
(ea) Mutual Fund referred to in clause (23D) of section 10;
(eb) securitisation trust referred to in clause (23DA) of section 10;
(eba) Investor Protection Fund referred to in clause (23EC) or clause (23ED) of section 10;
(ebb) Core Settlement Guarantee Fund referred to in clause (23EE) of section 10;
(ec) venture capital company or venture capital fund referred to in clause (23FB) of section 10;
(f) trade union referred to in sub-clause (a) or association referred to in sub-clause (b) of clause (24) of section 10;
(fa) Board or Authority referred to in clause (29A) of section 10;
(g) body or authority or Board or Trust or Commission (by whatever name called) referred to in clause
(h) infrastructure debt fund referred to in clause (47) of section 10, shall, if the total income in respect of which such research association, news agency, association or institution, person or fund or trust or university or other educational institution or any hospital or other medical institution or trade union or body or authority or Board or Trust or Commission or infrastructure debt fund or Mutual Fund or securitisation trust or venture capital company or venture capital fund is assessable, without giving effect to the provisions of section 10, exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).
(4D) Every university, college or other institution referred to in clause (ii) and clause (iii) of sub-section (1) of section 35, which is not required to furnish return of income or loss under any other provision of this section, shall furnish the return in respect of its income or loss in every previous year and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).
(4E) Every business trust, which is not required to furnish return of income or loss under any other provisions of this section, shall furnish the return of its income in respect of its income or loss in every previous year and all the provisions of this Act shall, so far as may be, apply if it were a return required to be furnished under sub-section (1).
(4F) Every investment fund referred to in section 115UB, which is not required to furnish return of income or loss under any other provisions of this section, shall furnish the return of income in respect of its income or loss in every previous year and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).
(5) If any person, having furnished a return under sub-section (1) or sub-section (4), discovers any omission or any wrong statement therein, he may furnish a revised return at any time before three months prior to the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.
(6) The prescribed form of the returns referred to in sub-sections (1) and (3) of this section, and in clause (i) of sub-section (1) of section 142 shall, in such cases as may be prescribed, require the assessee to furnish the particulars of income exempt from tax, assets of the prescribed nature and value, held by him as a beneficial owner or otherwise or in which he is a beneficiary , his bank account and credit card held by him, expenditure exceeding the prescribed limits incurred by him under prescribed heads and such other outgoings as may be prescribed.
(6A) Without prejudice to the provisions of sub-section (6), the prescribed form of the returns referred to in this section, and in clause (i) of sub-section (1) of section 142 shall, in the case of an assessee engaged in any business or profession, also require him to furnish the report of any audit referred to in section 44AB, or, where the report has been furnished prior to the furnishing of the return, a copy of such report together with proof of furnishing the report, the particulars of the location and style of the principal place where he carries on the business or profession and all the branches thereof, the names and addresses of his partners, if any, in such business or profession and, if he is a member of an association or body of individuals, the names of the other members of the association or the body of individuals and the extent of the share of the assessee and the shares of all such partners or the members, as the case may be, in the profits of the business or profession and any branches thereof.
(7) ***
(8)(a) Where the return under sub-section (1) or sub-section (2) or sub-section (4) for an assessment year is furnished after the specified date, or is not furnished, then whether or not the Assessing Officer has extended the date for furnishing the return under sub-section (1) or sub-section (2) the assessee shall be liable to pay simple interest at fifteen per cent per annum, reckoned from the day immediately following the specified date to the date of the furnishing of the return or, where no return has been furnished, the date of completion of the assessment under section 144, on the amount of the tax payable on the total income as determined on regular assessment, as reduced by the advance tax, if any, paid, and any tax deducted at source :
Provided that the Assessing Officer may, in such cases and under such circumstances as may be prescribed, reduce or waive the interest payable by any assessee under this sub-section.
Explanation 1.—For the purposes of this sub-section, "specified date", in relation to a return for an assessment year, means,—
(a) in the case of every assessee whose total income, or the total income of any person in respect of which he is assessable under this Act, includes any income from business or profession, the date of the expiry of four months from the end of the previous year or where there is more than one previous year, from the end of the previous year which expired last before the commencement of the assessment year or the 30th day of June of the assessment year, whichever is later;
(b) in the case of every other assessee, the 30th day of June of the assessment year.
Explanation 2.—Where, in relation to an assessment year, an assessment is made for the first time under section 147, the assessment so made shall be regarded as a regular assessment for the purposes of this sub-section.
(i) in a case where the interest is increased, the Assessing Officer shall serve on the assessee, a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly;
(ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded.
(c) The provisions of this sub-section shall apply in respect of the assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, and references therein to the other provisions of this Act shall be construed as references to the said provisions as they were applicable to the relevant assessment year.
(8A) Any person, whether or not he has furnished a return under sub-section (1) or sub-section (4) or sub-section (5), for an assessment year (herein referred to as the relevant assessment year), may furnish an updated return of his income or the income of any other person in respect of which he is assessable under this Act, for the previous year relevant to such assessment year, in the prescribed form, verified in such manner and setting forth such particulars as may be prescribed, at any time within forty-eight months from the end of the relevant assessment year:
Provided that the provision of this sub-section shall not apply, if the updated return,—
(a) is a return of a loss; or
(b) has the effect of decreasing the total tax liability determined on the basis of return furnished under sub-section (1) or sub-section (4) or sub-section (5); or
(c) results in refund or increases the refund due on the basis of return furnished under sub-section (1) or sub-section (4) or sub-section (5), of such person under this Act for the relevant assessment year:
Provided further that a person shall not be eligible to furnish an updated return under this sub-section, where—
(a) a search has been initiated under section 132 or books of account or other documents or any assets are requisitioned under section 132A in the case of such person; or
(b) a survey has been conducted under section 133A, other than sub-section (2A) of that section, in the case of such person; or
(c) a notice has been issued to the effect that any money, bullion, jewellery or valuable article or thing, seized or requisitioned under section 132 or section 132A in the case of any other person belongs to such person; or
(d) a notice has been issued to the effect that any books of account or documents, seized or requisitioned under section 132 or section 132A in the case of any other person, pertain or pertains to, or any other information contained therein, relate to, such person, for the assessment year relevant to the previous year in which such search is initiated or survey is conducted or requisition is made and any assessment year preceding such assessment year:
Provided also that no updated return shall be furnished by any person for the relevant assessment year, where—
(a) an updated return has been furnished by him under this sub-section for the relevant assessment year; or
(b) any proceeding for assessment or reassessment or recomputation or revision of income under this Act is pending or has been completed for the relevant assessment year in his case; or
(c) the Assessing Officer has information in respect of such person for the relevant assessment year in his possession under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (13 of 1976) or the Prohibition of Benami Property Transactions Act, 1988 (45 of 1988) or the Prevention of Money-laundering Act, 2002 (15 of 2003) or the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (22 of 2015) and the same has been communicated to him, prior to the date of furnishing of return under this sub-section; or
(d) information for the relevant assessment year has been received under an agreement referred to in section 90 or section 90A in respect of such person and the same has been communicated to him, prior to the date of furnishing of return under this sub-section; or
(e) any prosecution proceedings under the Chapter XXII have been initiated for the relevant assessment year in respect of such person, prior to the date of furnishing of return under this sub-section; or
(f) he is such person or belongs to such class of persons, as may be notified by the Board in this regard:
Provided alsothat no updated return shall be furnished by any person where any notice to show-cause under section 148A has been issued in his case after thirty-six months from the end of the relevant assessment year:
Provided alsothat the fourth proviso shall not apply where an order is passed under sub-section (3) of section 148A determining that it is not a fit case to issue notice under section 148:
Provided also that if any person has sustained a loss in any previous year and has furnished a return of loss in the prescribed form within the time allowed under sub-section (1) and verified in the prescribed manner and containing such other particulars as may be prescribed, he shall be allowed to furnish an updated return where such updated return is a return of income:
Provided also that if the loss or any part thereof carried forward under Chapter VI or unabsorbed depreciation carried forward under sub-section (2) of section 32 or tax credit carried forward under section 115JAA or under section 115JD is to be reduced for any subsequent previous year as a result of furnishing of return of income under this sub-section for a previous year, an updated return shall be furnished for each such subsequent previous year.
(9) Where the Assessing Officer considers that the return of income furnished by the assessee is defective, he may intimate the defect to the assessee and give him an opportunity to rectify the defect within a period of fifteen days from the date of such intimation or within such further period which, on an application made in this behalf, the Assessing Officer may, in his discretion, allow; and if the defect is not rectified within the said period of fifteen days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in any other provision of this Act, the return shall be treated as an invalid return and the provisions of this Act shall apply as if the assessee had failed to furnish the return :
Provided that where the assessee rectifies the defect after the expiry of the said period of fifteen days or the further period allowed, but before the assessment is made, the Assessing Officer may condone the delay and treat the return as a valid return.
Explanation.—For the purposes of this sub-section, a return of income shall be regarded as defective unless all the following conditions are fulfilled, namely :—
(a) the annexures, statements and columns in the return of income relating to computation of income chargeable under each head of income, computation of gross total income and total income have been duly filled in;
(aa) ***
(b) the return is accompanied by a statement showing the computation of the tax payable on the basis of the return;
(bb) the return is accompanied by the report of the audit referred to in section 44AB, or, where the report has been furnished prior to the furnishing of the return, by a copy of such report together with proof of furnishing the report;
(c) the return is accompanied by proof of—
(i) the tax, if any, claimed to have been deducted or collected at source and the advance tax and tax on self-assessment, if any, claimed to have been paid :
Provided that where the return is not accompanied by proof of the tax, if any, claimed to have been deducted or collected at source, the return of income shall not be regarded as defective if—
(a) a certificate for tax deducted or collected was not furnished under section 203 or section 206C to the person furnishing his return of income;
(b) such certificate is produced within a period of two years specified under sub-section (14) of section 155;
(ii) the amount of compulsory deposit, if any, claimed to have been made under the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974 (38 of 1974);
(ca) the return is accompanied by the proof of payment of tax as required under section 140B, if the return of income is a return furnished under sub-section (8A);
(d) where regular books of account are maintained by the assessee, the return is accompanied by copies of—
(i) manufacturing account, trading account, profit and loss account or, as the case may be, income and expenditure account or any other similar account and balance sheet;
(ii) in the case of a proprietary business or profession, the personal account of the proprietor; in the case of a firm, association of persons or body of individuals, personal accounts of the partners or members; and in the case of a partner or member of a firm, association of persons or body of individuals, also his personal account in the firm, association of persons or body of individuals;
(e) where the accounts of the assessee have been audited, the return is accompanied by copies of the audited profit and loss account and balance sheet and the auditor's report and, where an audit of cost accounts of the assessee has been conducted, under section 233B of the Companies Act, 1956 (1 of 1956), also the report under that section;
(f) where regular books of account are not maintained by the assessee, the return is accompanied by a statement indicating the amounts of turnover or, as the case may be, gross receipts, gross profit, expenses and net profit of the business or profession and the basis on which such amounts have been computed, and also disclosing the amounts of total sundry debtors, sundry creditors, stock- in-trade and cash balance as at the end of the previous year:
Provided that the Board may, by notification in the Official Gazette, specify that any of the conditions specified in clauses (a) to (f) to the Explanation shall not apply to such class of assessees or shall apply with such modifications, as may be specified in such notification.
(9A) Where any return of income is furnished in pursuance of an order under clause (b) of sub-section (2) of section 119, the provisions of this section shall apply.
(10) Omitted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991.
Note: the Finance Act, 2026 amendment to sub-section (8A) (loss-reduction) operates from assessment year 2026-27 and is not reflected in the FA-2025 base text above; it is described in the commentary.
C. AUTHORITIES
The leading authorities cluster around the scope of the return as the vehicle for claims, the belated/revised-return regime, and loss returns.
1. Claims and the scope of the return
Goetze (India) Ltd. v. CIT (2006) 284 ITR 323 (SC)
Court / Bench: Supreme Court of India; judgment dated 24 March 2006.
Facts: The assessee sought, by a letter filed during assessment proceedings, to claim a deduction that had not been made in its return; it did not file a revised return under section 139(5). The Assessing Officer declined to entertain the claim.
Held: The Supreme Court held that the Assessing Officer has no power to entertain a fresh claim made otherwise than by way of a revised return; a claim for deduction not made in the return cannot be allowed by the AO on a mere letter. However, the Court expressly clarified that its decision was 'limited to the power of the assessing authority' and did 'not impinge on the power of the Income-tax Appellate Tribunal' under section 254.
Significance: The bedrock authority on the procedural sanctity of the return: before the AO, a new claim must come through a revised return under section 139(5). Appellate authorities (CIT(A) and the Tribunal) retain the power to entertain such claims. Frequently distinguished where the claim is legal in nature or where full facts are on record.
S.R. Koshti v. CIT (2005) 276 ITR 165 (Guj.)
Court: Gujarat High Court.
Held: An authority under the Act is duty-bound not to take advantage of an assessee's ignorance; where income has been wrongly offered to tax, the Department must grant relief in accordance with law rather than retain tax not legally due. Tax can be collected only as authorised by law (Article 265).
Significance: Read alongside Goetze, it tempers the strictness of the return-based claim rule with the principle that the State cannot retain tax not lawfully due; relief may be sought through the appellate/revisional route or section 264.
2. Belated and revised returns; loss returns
Prakash Nath Khanna v. CIT (2004) 266 ITR 1 (SC)
Court: Supreme Court of India.
Held: The time allowed by section 139(4) to file a belated return does not extend the 'due date' under section 139(1). Filing a return within the 139(4) window does not, by itself, absolve the assessee of liability to prosecution under section 276CC for failure to furnish the return by the due date; the expression in 276CC refers to the time under 139(1).
Significance: Authoritative on the distinction between the 'due date' (139(1)) and the extended belated-return time (139(4)) for penal/prosecution purposes.
Held: Under the law as it then stood, a belated return filed under section 139(4) could not be revised under section 139(5); the power to revise was available only in respect of a return filed under section 139(1) or (2). A revised return substitutes the original for all purposes.
Status note: Decided on the pre-amendment text. The present section 139(5) (post Finance Act, 2016) permits revision of a return furnished under sub-section (1) or sub-section (4). The case remains instructive on the legal character of a revised return as a substitution of the original.
CIT v. Kulu Valley Transport Co. (P) Ltd. (1970) 77 ITR 518 (SC)
Court: Supreme Court of India.
Held: On the then-existing scheme, a loss return filed within the time allowed for a voluntary return entitled the assessee to carry forward the loss; the provisions enabling carry-forward were to be liberally construed in favour of the assessee.
Status note: The statutory scheme for carry-forward of losses has since been tightened (sections 80 and 139(3) now require the loss return to be filed within the 139(1) due date). The decision is cited for the interpretive approach to loss returns; the present statutory time-limit must be applied.
Principle: A return is defective only on the grounds prescribed in the Explanation to section 139(9); the Assessing Officer must give the assessee an opportunity to rectify the defect within the time allowed (extendable), failing which the return is treated as invalid. Courts have held that the regime is curative and the opportunity is mandatory; trivial or non-enumerated deficiencies do not render a return defective.
Candour note: The case law on 139(9) is largely fact-specific and at High Court / Tribunal level; practitioners should rely on the statutory grounds in the Explanation and the binding requirement of an opportunity to cure.
Position: The updated-return facility (Finance Act, 2022; widened by Finance Act, 2025 and Finance Act, 2026) is recent and has generated little merits litigation to date. It permits voluntary self-correction on payment of graduated additional tax, subject to the bars in the provisos (no updated return that is a loss return — relaxed by FA 2026 for loss-reduction — none that reduces total tax liability or increases refund, and none where search/survey/specified proceedings are pending).
Candour note: No direct Supreme Court or High Court authority construes section 139(8A) on the merits as yet; the provision is to be applied on its own terms read with rule 12AC and Form ITR-U.
4. Claims before appellate authorities; refund of excess
National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC)
Held: The Appellate Tribunal has jurisdiction to examine a question of law arising from the facts on record, even if not raised before the lower authorities, where it is necessary to correctly assess the tax liability; the subject matter of the appeal is the correct determination of tax.
Significance: Read with Goetze: while the AO cannot entertain a fresh claim except by revised return, the Tribunal can consider a new legal claim on facts on record — a key qualification protecting the assessee.
CIT v. Shelly Products (2003) 261 ITR 367 (SC)
Held: Where an assessee has, by mistake or otherwise, paid tax on an amount not exigible to tax or returned income not chargeable, and the assessment is later annulled or the income found not taxable, the assessee is entitled to claim refund of the excess; the Department cannot retain tax not authorised by law (Article 265).
Significance: Protects the assessee who over-discloses or overpays; supports the S.R. Koshti line that tax can be collected only as the law permits.
5. A valid return cannot be ignored
CIT v. Ranchhoddas Karsondas (1959) 36 ITR 569 (SC)
Held: A return voluntarily furnished (there, under section 22(1) of the 1922 Act, corresponding to section 139(1)), even one disclosing income below the taxable limit, is a valid return that the Department cannot ignore; the Assessing Officer cannot brush aside such a return and proceed as if no return had been filed (and, on the then facts, could not resort to section 34 reassessment while the return was pending).
Significance: Foundational authority that a return validly furnished must be dealt with as such; the Department cannot disregard it. Underpins the assessee's right to have the return processed/assessed.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced from the local Act (base text amended up to the Finance Act, 2025), with the publisher footnote apparatus and amendment-marker brackets removed; Finance Act, 2026 changes are flagged in the commentary. Citations are stated as reported; Tribunal / AAR / High Court orders are flagged. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.
CHAPTER XIV — PROCEDURE FOR ASSESSMENT
Section 139 — Return of Income
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live and central to the assessment machinery. Section 139 prescribes who must file a return, by when, and in what form, and contains the regimes for belated returns (139(4)), revised returns (139(5)), loss returns (139(3)), defective returns (139(9)) and the updated return (139(8A)).
FA 2026: Finance Act, 2026 widens section 139(8A): an updated return may now be furnished even where the taxpayer reduces the amount of loss claimed in the original return-of-loss (previously the updated-return facility was confined to declaring additional income). A parallel amendment appears in the Income-tax Act, 2025.
Recent amendments: Finance Act, 2025 extended the time-limit for filing an updated return to 48 months (from 24 months) from the end of the relevant assessment year, with a graduated additional tax. Section 139(1) carries provisos that compel a return where prescribed high-value conditions are met (large electricity spend, foreign travel, deposits, turnover-linked thresholds).
A. SECTION COMMENTARY
Section 139 is the gateway to the entire assessment code. Sub-section (1) casts the primary obligation: every company and firm must file a return irrespective of income, and every other person whose total income (or the income of another person assessable in his hands) exceeds the maximum amount not chargeable to tax must file on or before the due date. The provisos to sub-section (1) extend the net to persons satisfying prescribed economic tests even where income is below the exemption limit.
Sub-section (3) governs the return of loss: a person who wishes to carry forward business loss, speculation loss, capital loss or loss from owning and maintaining race horses must file within the due date under sub-section (1), the carry-forward of such losses being controlled by sections 80 and 139(3) read with the head-wise provisions. Sub-section (4) permits a belated return up to the end of the relevant assessment year or before completion of assessment, whichever is earlier. Sub-section (5) permits a revised return within the same outer limit where the assessee discovers an omission or wrong statement. Sub-section (9) deals with defective returns and the opportunity to cure the defect.
Sub-section (8A), inserted by the Finance Act, 2022, introduced the updated return — a self-correction facility allowing a taxpayer to file or revise a return on payment of additional tax. The window has been progressively widened (to 48 months by the Finance Act, 2025) and, by the Finance Act, 2026, extended to permit a reduction in the loss claimed, a situation earlier excluded by the proviso to sub-section (8A).
Key litigation themes
The principal judicial battlegrounds under section 139 are: (i) whether a claim not made in the return can be entertained otherwise than by a revised return; (ii) the interaction between the belated-return time-limit in 139(4) and prosecution under section 276CC; (iii) the conditions for carry-forward of loss where the return is late; and (iv) the curability of defects. These are addressed in the authorities below.
B. STATUTORY POSITION (verbatim text)
Reproduced from the local Act (base text to the Finance Act, 2025). Section 139 is lengthy; the full text of all sub-sections, provisos and Explanations is set out below as printed.
139. (1) Every person,—
(a) being a company or a firm; or
(b) being a person other than a company or a firm, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed :
Provided that a person referred to in clause (b), who is not required to furnish a return under this sub-section and residing in such area as may be specified by the Board in this behalf by notification in the Official Gazette, and who during the previous year incurs an expenditure of fifty thousand rupees or more towards consumption of electricity or at any time during the previous year fulfils any one of the following conditions, namely :—
(i) is in occupation of an immovable property exceeding a specified floor area, whether by way of ownership, tenancy or otherwise, as may be specified by the Board in this behalf; or
(ii) is the owner or the lessee of a motor vehicle other than a two wheeled motor vehicle, whether having any detachable side car having extra wheel attached to such two-wheeled motor vehicle or not; or
(iii) ***
(iv) has incurred expenditure for himself or any other person on travel to any foreign country; or
(v) is the holder of a credit card, not being an "add-on" card, issued by any bank or institution; or
(vi) is a member of a club where entrance fee charged is twenty-five thousand rupees or more, shall furnish a return, of his income during any previous year ending before the 1st day of April, 2005, on or before the due date in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed :
Provided further that the Central Government may, by notification in the Official Gazette, specify the class or classes of persons to whom the provisions of the first proviso shall not apply :
Provided also that every company or a firm shall furnish on or before the due date the return in respect of its income or loss in every previous year :
Provided also that a person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of section 6, who is not required to furnish a return under this sub-section and who at any time during the previous year,—
(a) holds, as a beneficial owner or otherwise, any asset (including any financial interest in any entity) located outside India or has signing authority in any account located outside India; or
(b) is a beneficiary of any asset (including any financial interest in any entity) located outside India, shall furnish, on or before the due date, a return in respect of his income or loss for the previous year in such form and verified in such manner and setting forth such other particulars as may be prescribed:
Provided also that nothing contained in the fourth proviso shall apply to an individual, being a beneficiary of any asset (including any financial interest in any entity) located outside India where, income, if any, arising from such asset is includible in the income of the person referred to in clause (a) of that proviso in accordance with the provisions of this Act:
Provided also that every person, being an individual or a Hindu undivided family or an association of persons or a body of individuals, whether incorporated or not, or an artificial juridical person, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year, without giving effect to the provisions of clause (38) of section 10 or section 10A or section 10B or section 10BA or section 54 or section 54B or section 54D or section 54EC or section 54F or section 54G or section 54GA or section 54GB or Chapter VI-A exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed:
Provided also that a person referred to in clause (b), who is not required to furnish a return under this sub-section, and who during the previous year—
(i) has deposited an amount or aggregate of the amounts exceeding one crore rupees in one or more current accounts maintained with a banking company or a co-operative bank; or
(ii) has incurred expenditure of an amount or aggregate of the amounts exceeding two lakh rupees for himself or any other person for travel to a foreign country; or
(iii) has incurred expenditure of an amount or aggregate of the amounts exceeding one lakh rupees towards consumption of electricity; or
(iv) fulfils such other conditions as may be prescribed, shall furnish a return of his income on or before the due date in such form and verified in such manner and setting forth such other particulars, as may be prescribed.
Explanation 1.—For the purposes of this sub-section, the expression "motor vehicle" shall have the meaning assigned to it in clause (28) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988).
Explanation 2.—In this sub-section, "due date" means,—
(a) where the assessee other than an assessee referred to in clause (aa) is—
(i) a company; or
(ii) a person (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force; or
(iii) a partner of a firm whose accounts are required to be audited under this Act or under any other law for the time being in force or the spouse of such partner if the provisions of section 5A applies to such spouse, the 31st day of October of the assessment year;
(aa) in the case of an assessee, including the partners of the firm or the spouse of such partner (if the provisions of section 5A applies to such spouse), being such assessee, who is required to furnish a report referred to in section 92E, the 30th day of November of the assessment year;
(b) in the case of a person other than a company, referred to in the first proviso to this sub-section, the 31st day of October of the assessment year;
(c) in the case of any other assessee, the 31st day of July of the assessment year.
Explanation 3.—For the purposes of this sub-section, the expression "travel to any foreign country" does not include travel to the neighbouring countries or to such places of pilgrimage as the Board may specify in this behalf by notification in the Official Gazette.
Explanation 4.—For the purposes of this section "beneficial owner" in respect of an asset means an individual who has provided, directly or indirectly, consideration for the asset for the immediate or future benefit, direct or indirect, of himself or any other person.
Explanation 5.—For the purposes of this section "beneficiary" in respect of an asset means an individual who derives benefit from the asset during the previous year and the consideration for such asset has been provided by any person other than such beneficiary.
Explanation 6.—For the purposes of this sub-section,—
(a) "banking company" shall have the meaning assigned to it in clause (i) of the Explanation to section 269SS;
(b) "co-operative bank" shall have the meaning assigned to it in clause (ii) of the Explanation to section 269SS.
(1A) Without prejudice to the provisions of sub-section (1), any person, being an individual who is in receipt of income chargeable under the head "Salaries" may, at his option, furnish a return of his income for any previous year to his employer, in accordance with such scheme as may be specified by the Board in this behalf, by notification in the Official Gazette, and subject to such conditions as may be specified therein, and such employer shall furnish all returns of income received by him on or before the due date, in such form (including on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media) and manner as may be specified in that scheme, and in such case, any employee who has filed a return of his income to his employer shall be deemed to have furnished a return of income under sub-section
(1), and the provisions of this Act shall apply accordingly.
(1B) Without prejudice to the provisions of sub-section (1), any person, being a company or being a person other than a company, required to furnish a return of income under sub-section (1), may, at his option, on or before the due date, furnish a return of his income for any previous year in accordance with such scheme as may be specified by the Board in this behalf by notification in the Official Gazette and subject to such conditions as may be specified therein, in such form (including on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media) and in the manner as may be specified in that scheme, and in such case, the return of income furnished under such scheme shall be deemed to be a return furnished under sub-section (1), and the provisions of this Act shall apply accordingly.
(1C) Notwithstanding anything contained in sub-section (1), the Central Government may, by notification in the Official Gazette, exempt any class or classes of persons from the requirement of furnishing a return of income having regard to such conditions as may be specified in that notification.
(3) If any person who has sustained a loss in any previous year under the head "Profits and gains of business or profession" or under the head "Capital gains" and claims that the loss or any part thereof should be carried forward under sub-section (1) of section 72, or sub-section (2) of section 73, or sub-section (2) of section 73A or sub-section (1) or sub-section (3) of section 74, or sub-section (3) of section 74A, he may furnish, within the time allowed under sub-section (1), a return of loss in the prescribed form and verified in the prescribed manner and containing such other particulars as may be prescribed, and all the provisions of this Act shall apply as if it were a return under sub-section (1).
(4) Any person who has not furnished a return within the time allowed to him under sub-section (1), may furnish the return for any previous year at any time before three months prior to the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.
(4A) Every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes, or of income being voluntary contributions referred to in sub-clause (iia) of clause (24) of section 2, shall, if the total income in respect of which he is assessable as a representative assessee (the total income for this purpose being computed under this Act without giving effect to the provisions of sections 11 and 12) exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).
(4B) The chief executive officer (whether such chief executive officer is known as Secretary or by any other designation) of every political party shall, if the total income in respect of which the political party is assessable (the total income for this purpose being computed under this Act without giving effect to the provisions of section 13A) exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and all the provisions of this Act, shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).
(4C) Every—
(a) research association referred to in clause (21) of section 10;
(b) news agency referred to in clause (22B) of section 10;
(c) association or institution referred to in clause (23A) of section 10;
(ca) person referred to in clause (23AAA) of section 10;
(d) institution referred to in clause (23B) of section 10;
(e) fund or institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) or any university or other educational institution referred to in sub-clause (iiiab) or sub-clause (iiiad) or sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (iiiac) or sub-clause (iiiae) or sub-clause (via) of clause (23C) of section 10;
(ea) Mutual Fund referred to in clause (23D) of section 10;
(eb) securitisation trust referred to in clause (23DA) of section 10;
(eba) Investor Protection Fund referred to in clause (23EC) or clause (23ED) of section 10;
(ebb) Core Settlement Guarantee Fund referred to in clause (23EE) of section 10;
(ec) venture capital company or venture capital fund referred to in clause (23FB) of section 10;
(f) trade union referred to in sub-clause (a) or association referred to in sub-clause (b) of clause (24) of section 10;
(fa) Board or Authority referred to in clause (29A) of section 10;
(g) body or authority or Board or Trust or Commission (by whatever name called) referred to in clause
(46) of section 10;
(h) infrastructure debt fund referred to in clause (47) of section 10, shall, if the total income in respect of which such research association, news agency, association or institution, person or fund or trust or university or other educational institution or any hospital or other medical institution or trade union or body or authority or Board or Trust or Commission or infrastructure debt fund or Mutual Fund or securitisation trust or venture capital company or venture capital fund is assessable, without giving effect to the provisions of section 10, exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).
(4D) Every university, college or other institution referred to in clause (ii) and clause (iii) of sub-section (1) of section 35, which is not required to furnish return of income or loss under any other provision of this section, shall furnish the return in respect of its income or loss in every previous year and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).
(4E) Every business trust, which is not required to furnish return of income or loss under any other provisions of this section, shall furnish the return of its income in respect of its income or loss in every previous year and all the provisions of this Act shall, so far as may be, apply if it were a return required to be furnished under sub-section (1).
(4F) Every investment fund referred to in section 115UB, which is not required to furnish return of income or loss under any other provisions of this section, shall furnish the return of income in respect of its income or loss in every previous year and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).
(5) If any person, having furnished a return under sub-section (1) or sub-section (4), discovers any omission or any wrong statement therein, he may furnish a revised return at any time before three months prior to the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.
(6) The prescribed form of the returns referred to in sub-sections (1) and (3) of this section, and in clause (i) of sub-section (1) of section 142 shall, in such cases as may be prescribed, require the assessee to furnish the particulars of income exempt from tax, assets of the prescribed nature and value, held by him as a beneficial owner or otherwise or in which he is a beneficiary , his bank account and credit card held by him, expenditure exceeding the prescribed limits incurred by him under prescribed heads and such other outgoings as may be prescribed.
(6A) Without prejudice to the provisions of sub-section (6), the prescribed form of the returns referred to in this section, and in clause (i) of sub-section (1) of section 142 shall, in the case of an assessee engaged in any business or profession, also require him to furnish the report of any audit referred to in section 44AB, or, where the report has been furnished prior to the furnishing of the return, a copy of such report together with proof of furnishing the report, the particulars of the location and style of the principal place where he carries on the business or profession and all the branches thereof, the names and addresses of his partners, if any, in such business or profession and, if he is a member of an association or body of individuals, the names of the other members of the association or the body of individuals and the extent of the share of the assessee and the shares of all such partners or the members, as the case may be, in the profits of the business or profession and any branches thereof.
(7) ***
(8)(a) Where the return under sub-section (1) or sub-section (2) or sub-section (4) for an assessment year is furnished after the specified date, or is not furnished, then whether or not the Assessing Officer has extended the date for furnishing the return under sub-section (1) or sub-section (2) the assessee shall be liable to pay simple interest at fifteen per cent per annum, reckoned from the day immediately following the specified date to the date of the furnishing of the return or, where no return has been furnished, the date of completion of the assessment under section 144, on the amount of the tax payable on the total income as determined on regular assessment, as reduced by the advance tax, if any, paid, and any tax deducted at source :
Provided that the Assessing Officer may, in such cases and under such circumstances as may be prescribed, reduce or waive the interest payable by any assessee under this sub-section.
Explanation 1.—For the purposes of this sub-section, "specified date", in relation to a return for an assessment year, means,—
(a) in the case of every assessee whose total income, or the total income of any person in respect of which he is assessable under this Act, includes any income from business or profession, the date of the expiry of four months from the end of the previous year or where there is more than one previous year, from the end of the previous year which expired last before the commencement of the assessment year or the 30th day of June of the assessment year, whichever is later;
(b) in the case of every other assessee, the 30th day of June of the assessment year.
Explanation 2.—Where, in relation to an assessment year, an assessment is made for the first time under section 147, the assessment so made shall be regarded as a regular assessment for the purposes of this sub-section.
(b) Where as a result of an order under section 147 or section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 or an order of the Settlement Commission under sub-section (4) of section 245D, the amount of tax on which interest was payable under this sub-section has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and—
(i) in a case where the interest is increased, the Assessing Officer shall serve on the assessee, a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly;
(ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded.
(c) The provisions of this sub-section shall apply in respect of the assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, and references therein to the other provisions of this Act shall be construed as references to the said provisions as they were applicable to the relevant assessment year.
(8A) Any person, whether or not he has furnished a return under sub-section (1) or sub-section (4) or sub-section (5), for an assessment year (herein referred to as the relevant assessment year), may furnish an updated return of his income or the income of any other person in respect of which he is assessable under this Act, for the previous year relevant to such assessment year, in the prescribed form, verified in such manner and setting forth such particulars as may be prescribed, at any time within forty-eight months from the end of the relevant assessment year:
Provided that the provision of this sub-section shall not apply, if the updated return,—
(a) is a return of a loss; or
(b) has the effect of decreasing the total tax liability determined on the basis of return furnished under sub-section (1) or sub-section (4) or sub-section (5); or
(c) results in refund or increases the refund due on the basis of return furnished under sub-section (1) or sub-section (4) or sub-section (5), of such person under this Act for the relevant assessment year:
Provided further that a person shall not be eligible to furnish an updated return under this sub-section, where—
(a) a search has been initiated under section 132 or books of account or other documents or any assets are requisitioned under section 132A in the case of such person; or
(b) a survey has been conducted under section 133A, other than sub-section (2A) of that section, in the case of such person; or
(c) a notice has been issued to the effect that any money, bullion, jewellery or valuable article or thing, seized or requisitioned under section 132 or section 132A in the case of any other person belongs to such person; or
(d) a notice has been issued to the effect that any books of account or documents, seized or requisitioned under section 132 or section 132A in the case of any other person, pertain or pertains to, or any other information contained therein, relate to, such person, for the assessment year relevant to the previous year in which such search is initiated or survey is conducted or requisition is made and any assessment year preceding such assessment year:
Provided also that no updated return shall be furnished by any person for the relevant assessment year, where—
(a) an updated return has been furnished by him under this sub-section for the relevant assessment year; or
(b) any proceeding for assessment or reassessment or recomputation or revision of income under this Act is pending or has been completed for the relevant assessment year in his case; or
(c) the Assessing Officer has information in respect of such person for the relevant assessment year in his possession under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (13 of 1976) or the Prohibition of Benami Property Transactions Act, 1988 (45 of 1988) or the Prevention of Money-laundering Act, 2002 (15 of 2003) or the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (22 of 2015) and the same has been communicated to him, prior to the date of furnishing of return under this sub-section; or
(d) information for the relevant assessment year has been received under an agreement referred to in section 90 or section 90A in respect of such person and the same has been communicated to him, prior to the date of furnishing of return under this sub-section; or
(e) any prosecution proceedings under the Chapter XXII have been initiated for the relevant assessment year in respect of such person, prior to the date of furnishing of return under this sub-section; or
(f) he is such person or belongs to such class of persons, as may be notified by the Board in this regard:
Provided alsothat no updated return shall be furnished by any person where any notice to show-cause under section 148A has been issued in his case after thirty-six months from the end of the relevant assessment year:
Provided alsothat the fourth proviso shall not apply where an order is passed under sub-section (3) of section 148A determining that it is not a fit case to issue notice under section 148:
Provided also that if any person has sustained a loss in any previous year and has furnished a return of loss in the prescribed form within the time allowed under sub-section (1) and verified in the prescribed manner and containing such other particulars as may be prescribed, he shall be allowed to furnish an updated return where such updated return is a return of income:
Provided also that if the loss or any part thereof carried forward under Chapter VI or unabsorbed depreciation carried forward under sub-section (2) of section 32 or tax credit carried forward under section 115JAA or under section 115JD is to be reduced for any subsequent previous year as a result of furnishing of return of income under this sub-section for a previous year, an updated return shall be furnished for each such subsequent previous year.
(9) Where the Assessing Officer considers that the return of income furnished by the assessee is defective, he may intimate the defect to the assessee and give him an opportunity to rectify the defect within a period of fifteen days from the date of such intimation or within such further period which, on an application made in this behalf, the Assessing Officer may, in his discretion, allow; and if the defect is not rectified within the said period of fifteen days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in any other provision of this Act, the return shall be treated as an invalid return and the provisions of this Act shall apply as if the assessee had failed to furnish the return :
Provided that where the assessee rectifies the defect after the expiry of the said period of fifteen days or the further period allowed, but before the assessment is made, the Assessing Officer may condone the delay and treat the return as a valid return.
Explanation.—For the purposes of this sub-section, a return of income shall be regarded as defective unless all the following conditions are fulfilled, namely :—
(a) the annexures, statements and columns in the return of income relating to computation of income chargeable under each head of income, computation of gross total income and total income have been duly filled in;
(aa) ***
(b) the return is accompanied by a statement showing the computation of the tax payable on the basis of the return;
(bb) the return is accompanied by the report of the audit referred to in section 44AB, or, where the report has been furnished prior to the furnishing of the return, by a copy of such report together with proof of furnishing the report;
(c) the return is accompanied by proof of—
(i) the tax, if any, claimed to have been deducted or collected at source and the advance tax and tax on self-assessment, if any, claimed to have been paid :
Provided that where the return is not accompanied by proof of the tax, if any, claimed to have been deducted or collected at source, the return of income shall not be regarded as defective if—
(a) a certificate for tax deducted or collected was not furnished under section 203 or section 206C to the person furnishing his return of income;
(b) such certificate is produced within a period of two years specified under sub-section (14) of section 155;
(ii) the amount of compulsory deposit, if any, claimed to have been made under the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974 (38 of 1974);
(ca) the return is accompanied by the proof of payment of tax as required under section 140B, if the return of income is a return furnished under sub-section (8A);
(d) where regular books of account are maintained by the assessee, the return is accompanied by copies of—
(i) manufacturing account, trading account, profit and loss account or, as the case may be, income and expenditure account or any other similar account and balance sheet;
(ii) in the case of a proprietary business or profession, the personal account of the proprietor; in the case of a firm, association of persons or body of individuals, personal accounts of the partners or members; and in the case of a partner or member of a firm, association of persons or body of individuals, also his personal account in the firm, association of persons or body of individuals;
(e) where the accounts of the assessee have been audited, the return is accompanied by copies of the audited profit and loss account and balance sheet and the auditor's report and, where an audit of cost accounts of the assessee has been conducted, under section 233B of the Companies Act, 1956 (1 of 1956), also the report under that section;
(f) where regular books of account are not maintained by the assessee, the return is accompanied by a statement indicating the amounts of turnover or, as the case may be, gross receipts, gross profit, expenses and net profit of the business or profession and the basis on which such amounts have been computed, and also disclosing the amounts of total sundry debtors, sundry creditors, stock- in-trade and cash balance as at the end of the previous year:
Provided that the Board may, by notification in the Official Gazette, specify that any of the conditions specified in clauses (a) to (f) to the Explanation shall not apply to such class of assessees or shall apply with such modifications, as may be specified in such notification.
(9A) Where any return of income is furnished in pursuance of an order under clause (b) of sub-section (2) of section 119, the provisions of this section shall apply.
(10) Omitted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991.
Note: the Finance Act, 2026 amendment to sub-section (8A) (loss-reduction) operates from assessment year 2026-27 and is not reflected in the FA-2025 base text above; it is described in the commentary.
C. AUTHORITIES
The leading authorities cluster around the scope of the return as the vehicle for claims, the belated/revised-return regime, and loss returns.
1. Claims and the scope of the return
Goetze (India) Ltd. v. CIT (2006) 284 ITR 323 (SC)
Court / Bench: Supreme Court of India; judgment dated 24 March 2006.
Facts: The assessee sought, by a letter filed during assessment proceedings, to claim a deduction that had not been made in its return; it did not file a revised return under section 139(5). The Assessing Officer declined to entertain the claim.
Held: The Supreme Court held that the Assessing Officer has no power to entertain a fresh claim made otherwise than by way of a revised return; a claim for deduction not made in the return cannot be allowed by the AO on a mere letter. However, the Court expressly clarified that its decision was 'limited to the power of the assessing authority' and did 'not impinge on the power of the Income-tax Appellate Tribunal' under section 254.
Significance: The bedrock authority on the procedural sanctity of the return: before the AO, a new claim must come through a revised return under section 139(5). Appellate authorities (CIT(A) and the Tribunal) retain the power to entertain such claims. Frequently distinguished where the claim is legal in nature or where full facts are on record.
S.R. Koshti v. CIT (2005) 276 ITR 165 (Guj.)
Court: Gujarat High Court.
Held: An authority under the Act is duty-bound not to take advantage of an assessee's ignorance; where income has been wrongly offered to tax, the Department must grant relief in accordance with law rather than retain tax not legally due. Tax can be collected only as authorised by law (Article 265).
Significance: Read alongside Goetze, it tempers the strictness of the return-based claim rule with the principle that the State cannot retain tax not lawfully due; relief may be sought through the appellate/revisional route or section 264.
2. Belated and revised returns; loss returns
Prakash Nath Khanna v. CIT (2004) 266 ITR 1 (SC)
Court: Supreme Court of India.
Held: The time allowed by section 139(4) to file a belated return does not extend the 'due date' under section 139(1). Filing a return within the 139(4) window does not, by itself, absolve the assessee of liability to prosecution under section 276CC for failure to furnish the return by the due date; the expression in 276CC refers to the time under 139(1).
Significance: Authoritative on the distinction between the 'due date' (139(1)) and the extended belated-return time (139(4)) for penal/prosecution purposes.
Kumar Jagdish Chandra Sinha v. CIT (1996) 220 ITR 67 (SC)
Court: Supreme Court of India.
Held: Under the law as it then stood, a belated return filed under section 139(4) could not be revised under section 139(5); the power to revise was available only in respect of a return filed under section 139(1) or (2). A revised return substitutes the original for all purposes.
Status note: Decided on the pre-amendment text. The present section 139(5) (post Finance Act, 2016) permits revision of a return furnished under sub-section (1) or sub-section (4). The case remains instructive on the legal character of a revised return as a substitution of the original.
CIT v. Kulu Valley Transport Co. (P) Ltd. (1970) 77 ITR 518 (SC)
Court: Supreme Court of India.
Held: On the then-existing scheme, a loss return filed within the time allowed for a voluntary return entitled the assessee to carry forward the loss; the provisions enabling carry-forward were to be liberally construed in favour of the assessee.
Status note: The statutory scheme for carry-forward of losses has since been tightened (sections 80 and 139(3) now require the loss return to be filed within the 139(1) due date). The decision is cited for the interpretive approach to loss returns; the present statutory time-limit must be applied.
3. Defective returns and updated returns
On section 139(9) — defective returns
Principle: A return is defective only on the grounds prescribed in the Explanation to section 139(9); the Assessing Officer must give the assessee an opportunity to rectify the defect within the time allowed (extendable), failing which the return is treated as invalid. Courts have held that the regime is curative and the opportunity is mandatory; trivial or non-enumerated deficiencies do not render a return defective.
Candour note: The case law on 139(9) is largely fact-specific and at High Court / Tribunal level; practitioners should rely on the statutory grounds in the Explanation and the binding requirement of an opportunity to cure.
On section 139(8A) — updated return
Position: The updated-return facility (Finance Act, 2022; widened by Finance Act, 2025 and Finance Act, 2026) is recent and has generated little merits litigation to date. It permits voluntary self-correction on payment of graduated additional tax, subject to the bars in the provisos (no updated return that is a loss return — relaxed by FA 2026 for loss-reduction — none that reduces total tax liability or increases refund, and none where search/survey/specified proceedings are pending).
Candour note: No direct Supreme Court or High Court authority construes section 139(8A) on the merits as yet; the provision is to be applied on its own terms read with rule 12AC and Form ITR-U.
4. Claims before appellate authorities; refund of excess
National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC)
Held: The Appellate Tribunal has jurisdiction to examine a question of law arising from the facts on record, even if not raised before the lower authorities, where it is necessary to correctly assess the tax liability; the subject matter of the appeal is the correct determination of tax.
Significance: Read with Goetze: while the AO cannot entertain a fresh claim except by revised return, the Tribunal can consider a new legal claim on facts on record — a key qualification protecting the assessee.
CIT v. Shelly Products (2003) 261 ITR 367 (SC)
Held: Where an assessee has, by mistake or otherwise, paid tax on an amount not exigible to tax or returned income not chargeable, and the assessment is later annulled or the income found not taxable, the assessee is entitled to claim refund of the excess; the Department cannot retain tax not authorised by law (Article 265).
Significance: Protects the assessee who over-discloses or overpays; supports the S.R. Koshti line that tax can be collected only as the law permits.
5. A valid return cannot be ignored
CIT v. Ranchhoddas Karsondas (1959) 36 ITR 569 (SC)
Held: A return voluntarily furnished (there, under section 22(1) of the 1922 Act, corresponding to section 139(1)), even one disclosing income below the taxable limit, is a valid return that the Department cannot ignore; the Assessing Officer cannot brush aside such a return and proceed as if no return had been filed (and, on the then facts, could not resort to section 34 reassessment while the return was pending).
Significance: Foundational authority that a return validly furnished must be dealt with as such; the Department cannot disregard it. Underpins the assessee's right to have the return processed/assessed.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced from the local Act (base text amended up to the Finance Act, 2025), with the publisher footnote apparatus and amendment-marker brackets removed; Finance Act, 2026 changes are flagged in the commentary. Citations are stated as reported; Tribunal / AAR / High Court orders are flagged. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.