On 8th Nov. 2016, the Indian Govt demonetised the Rs. 500 and Rs. 1000 notes in order to curb the flow of black money in the system. The Govt has released the new currency notes and all old notes have to be deposited with the bank on or before 30th Dec 2016.

A lot of people have started searching for ways on how they can utilise their black money held in the form of cash without attracting any penalty. Some people tried to purchase Gold through their black money held in the form of old currency notes but the Govt cracked-down on this way by conducting raids on Jewellers. Several Jewellers have been caught who were trying to sell Gold at a premium in exchange for old currency notes.

Some bankers were also exchanging new notes in exchange for old notes but the Govt has cracked down on these bankers as well. A lot of raids have been conducted on Banks across the country and substantial evidence has been found against some bankers who were trying to exchange notes for a commission.

The above 2 methods were the most common methods through which people were using the old currency notes. However, the Govt is now very active and is ensuring that tax-evaders don’t get away and don’t get any chance to convert their black money.

Some businessmen who were holding cash were also planning to show an inflated sales figure this year in the form cash sales and deposit the same in their banks. They were also planning to show an increase in cash sale of the last year by revising their income tax returns of the last year.

However, the Govt has been very active in plugging all loopholes through which people were trying to get their black money into the banking system. So as to ensure that any unaccounted wealth does not come into the banking channels – the Central Board of Direct Tax (CBDT) has also stated in a notice that:-

“Any instance coming to the Notice of the Income Tax Dept, which reflects manipulation in the amount of Income, cash-in-hand, profits, and fudging of accounts may necessitate scrutiny of such cases.”

Section 139(5) – Revision of Income Tax Returns

Once you have filed an Income Tax Return, you are allowed to revise the same within 1 year from the end of the assessment year or before the assessment of income by the income tax department, whichever is earlier.

Therefore if you have already filed the income tax return for the Financial Year 2014-15 and 2015-16, you can still revise the same if the assessment has not been completed.

If the assessment has not been completed, the last date for filing of income tax return is

YearLast date to file Revised Return
Financial Year 2014-1531st March 2017
Financial Year 2015-1631st March 2018

If the taxpayer who has filed a tax return discovers any omission or wrong statement therein, he may revise his tax return. If the omission was by mistake and was not intentional then any change can be made to information furnished in the original income tax return by filing a revised income tax return.

An income tax return can be revised any number of times before the due date or before completion of assessment. However, the mode of filing the return shall remain the same i.e. if the income tax return was efiled originally, the revised return should also be efiled and the acknowledgement number of the previous return should also be mentioned.

The process and the form for filing the revised income tax return is the same as that for the original income tax return. Once, a revised income tax return is filed – it is deemed to replace the original income tax return.

Cases where Revising Income Tax Return may lead to Scrutiny?

Any revision in the income tax return which looks suspicious or looks like an attempt to adjust the unaccounted cash may lead to a scrutiny notice. For example: If you disclose additional cash in hand in the revised return, you may attract the income tax department’s attention.

Any changes in the opening and closing balance of cash, increase in cash sales, reduction in cash expenditure, reporting of any loan or any other cash transaction (incl. gifts) which were not disclosed in the original income tax return but have now been disclosed in the revision income tax return may attract a scrutiny notice.

The notice issued by the CBDT is a warning to those who were planning to revise their income tax returns only to manipulate their returns so as to adjust the unaccounted cash held by them. Any taxpayer who has genuinely revised the income tax return would not be seen with suspicion by the Tax Department.

However, if the changes made in the revised income tax return are genuine and are well explained – such taxpayers may not attract an income tax notice. If you have sufficient documents to support the revision, you can go ahead and file a revised return.