What Are The Consequences Of Not Filing A Belated Or Revised Return On Time

Every return filed after the due date is treated as a belated return. A belated return can be filed three months before the expiry of the relevant assessment year. Similarly, a return filed to remove the error or omissions made in the original return is deemed a revised one. “A revised return can also be filed three months before the expiry of the relevant assessment year. However, the time limit provided for filing an updated return is 24 months from the end of the relevant assessment year,” says Rahul Singh, senior manager, Taxmann, tax and corporate advisor.

Accordingly, December 31, 2024, is the last date to file a revised or belated income return for the Assessment Year 2024-25.

The following are the consequences for non-filing of belated/updated returns. 

No refund

Failure to file a belated return result in the denial of the refund, as filing a return is the only available mechanism for claiming a refund of excess tax deducted at source (TDS) paid. 

Prosecution 

A prosecution is launched under section 276CC if a person fails to furnish the return of income, which he is required to furnish under Section 139(1) or in pursuance of a notice issued by the Income-tax authorities. Such an offense is punishable with rigorous imprisonment of three months to seven years and with a fine.

Best Judgement Assessment

“If a person fails to file the return of income, the Assessing Officer (AO) is empowered to invoke section 144 of the Income-tax Act and may proceed to make an assessment based on the information available to him,” says Singh. 

Essentially, in such cases, the AO is authorized to make an assessment based on the available information, including the taxpayer’s financial records, previous returns, and other relevant data. This method is used when the taxpayer does not comply with filing requirements, and the AO believes that income has been under-reported or inadequately disclosed. The outcome of a Best Judgement Assessment can result in higher tax liabilities, penalties, and interest.

Penalty proceedings

Not filing a return of income amounts to under-reporting of income. Thus, a penalty may be levied under section 270A at the rate of 50 per cent of the tax payable on under-reported income.

Hence, it is essential to file your belated or revised return by the 31 December deadline.