Acceptance of Returns of Income/ Fringe Benefits in Paper Form for Assessment Year 2007-08 in Case of Firms Liable to Audit under section 44AB and Companies
Circular No. 3/2007 was issued by the Central Board of Direct Taxes on 25 May 2007. Its subject is Acceptance of Returns of Income/ Fringe Benefits in Paper Form for Assessment Year 2007-08 in Case of Firms Liable to Audit under section 44AB and Companies.
This amends the Income-tax Rules. What it changes is the Rules, not the Act — and a rule can never take away what the section gives.
Permits firms liable to audit under section 44AB and companies, who under sub-rule (3) of the new rule 12 must file electronically in Form ITR-5 or Form ITR-6, to file their return of income or fringe benefits for assessment year 2007-08 on paper for the time being. The Board acts under section 119. Three conditions attach: the return must be in the new Form ITR-5 or ITR-6; no annexure may be enclosed except extra sheets for the house property computation or for tax deducted or collected at source in Schedules HP, TDS-2 or TCS where the space in the form is not enough; and once the software is available the same return must be furnished electronically under digital signature, or the data transmitted electronically with the verification in Form ITR-V, on or before 31 October 2007. Assessing Officers are to report by 15 June 2007 to the Director General of Income-tax (Systems) on the returns received manually up to 31 May 2007.
The software for electronic filing was not ready, and representations pointed out that companies wanting to apply to the Settlement Commission before 31 May 2007, under Chapter XIX-A as it stood before its amendment from 1 June 2007 by the Finance Act, 2007, could not do so because filing a return was a necessary condition for such an application.
ACCEPTANCE OF RETURNS OF INCOME/ FRINGE BENEFITS IN PAPER FORM FOR ASSESSMENT YEAR 2007-08 IN CASE OF FIRMS LIABLE TO AUDIT UNDER SECTION 44AB AND COMPANIES
CIRCULAR NO. 3/2007, DATED 25-5-2007
Vide Income-tax (4th Amendment) Rules, 2007 [S.O. No. 762(E) dated 14th May, 2007], the Central Board of Direct Taxes amended the Income-tax Rules, 1962 substituting rule 12 by a new rule 12 and notifying new return forms for assessment year 2007-08. Sub-rule (3) of the new rule 12, inter-alia, provides that a firm required to furnish the return of income/ fringe benefits in Form ITR-5 and to whom provisions of section 44AB are applicable, or a company required to furnish the return of income/ fringe benefits in Form ITR-6 shall furnish the return electronically in any of the following manner:-
furnishing the return electronically under digital signature; or
furnishing the data in the return electronically and thereafter submitting the verification of the return in Form ITR-V.
2. For furnishing the return electronically in any of the manner mentioned above, the necessary software is not yet ready. The last date for filing returns for the above categories of assessees is 31.10.2007. However, representations have been received in the Board mentioning that the companies who want to file their applications in the Settlement Commission before 31.5.2007 (under the provisions of Chapter XIXA of the Income-tax Act as they stand before their amendment with effect from 1st June, 2007 by the Finance Act, 2007), may not be eligible to do so because they cannot file the return (which is a necessary condition for making an application to the Settlement Commission) for assessment year 2007-08 in the absence of availability of necessary software to be provided by the Income-tax Department for filing the return electronically. Accordingly, it has been requested that, till the software is ready, they may be allowed to file the return manually in paper form with a condition that they will supplement the return by e-filing when the software is ready.
3. To mitigate the hardship pointed out above, the Board, in exercise of powers conferred under section 119 of the Income-tax Act for proper implementation of the said Act, hereby direct the Income-tax authorities to accept the returns of income/ fringe benefits for assessment year 2007-08 in a paper form in case of companies and firms which are, under the provisions of sub-rule (3) of rule 12, liable to file the return electronically, subject to the following conditions:-
These returns shall be filed only in new return forms ITR-5 or ITR-6, as the case may be.
No annexure shall be enclosed with such returns except the extra sheets for computation of income under the head "House Property" or for giving details of tax deducted at source or tax collected at source in Schedules HP, TDS-2 or TCS, respectively, to these forms, if the space provided in such schedules is not sufficient.
Such firms/ companies filing the return manually shall, after the availability of the software, furnish the return electronically under digital signature or furnish the data in the return electronically and thereafter submit the verification of the return in Form ITR-V on or before 31st October, 2007.
4. All the Assessing Officers are directed to send a report by 15th June, 2007 to the Director General of Income-tax (Systems) in respect of such returns received manually upto 31.5.2007.
[F. No. 153/75/2007-TPL]
In an old dispute over whether a 2007-08 paper return was validly filed, or over the maintainability of a Settlement Commission application made on the strength of it.
Rules it names. Rule 12 of the Income-tax Rules, 1962. The 1962 Rules were replaced by the Income-tax Rules, 2026, which renumbered nearly everything: a rule number quoted here almost never means the same rule today.
It mentions. Circular No. 3/2007
Source: the Income Tax Department’s own published text — its page for this instrument.
