[Opinion] Whether Non-Filer of ITR is Liable for Prosecution Irrespective of Intention or Motive of the Assessee?

Mukesh Kohli – [2025] 172 taxmann.com 492 (Article)

Sometimes we professional face a situation that after submission of Tax Audit Report or Transfer Price Report of the assesse, the Assessee cannot file its/his/her return of Income because its/his/her does not have sufficient funds to pay off its Income Tax liability resulting non-filling of Income Tax return or there may be other reasons which are not in the control of the assessee.

Now question arises whether the Assessee is liable to prosecution irrespective of intention of the Assessee.

Let us see Section 139(1), 139(4), 139(8A), 276CC, 278E and Section 119(2)(b) of the Income Tax Act, 1961 to get the answer:

Section 139(1)

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 92 form and verified in the prescribed manner and setting forth such other particulars as may be prescribed.

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.

Section 139(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.

Section 139(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 twenty-four 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).

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