You need attach nothing to the returns

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You need attach nothing to the returns

Sandeep Shanbhag/ DNA MONEY | 2008-07-25 08:43:34

Income Tax

When one of our clients, Prakash Rege called in to say that he was being asked to submit his Form 16 as an annexure with his tax return for FY07-08, my initial thought was, there must have been a mistake. Either Rege had misunderstood or the official accepting the return at the tax office was new and not familiar with the new tax return filing process.

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For, the law does not any more require annexures like Form 16, rent and dividend receipts, or TDS certificates etc to be attached while filing returns. The change was made last year, when the I-T department did away with the SARAL form and replaced it with new forms. There are eight forms in all, each applicable to a particular category of taxpayer (individual, firm, company etc) and are classified as ITR series 1 to 8.

As per the finance ministry, the new forms had to be introduced as the name SARAL was only euphemism, which never served its purpose. Though in theory it was a one-page form, it required to be accompanied by several annexures to serve as a back-up and supporting evidence. He went on to add that the new forms are annexure-less and amenable to e-filing.

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However, what I thought was a sporadic incident turned out to be quite the opposite. Feedback similar to Rege’s was being received from various quarters – taxpayers and chartered accountants alike. Apparently, tax officials were indeed insisting on annexures, especially the Form 16 and TDS statements (Form 16A).

In fact, when DNA visited the Bandra-Kurla office of the tax department in May, a clerk confirmed that tax returns for the assessment year 2008-09 were being accepted only if the annexures were attached. This was indeed surprising and frankly illegal since Rule 12, sub rule (2) of Income Tax Rules clearly state that no annexures are to be attached with the tax return. Moreover, the practice of requiring annexures was what got SARAL discontinued in the first place.

Thankfully, the Central Board of Direct Taxes (CBDT) has issued a circular (No 6 dated. July 18, 2008) that seeks to lay the controversy and confusion to rest. This circular is being reproduced verbatim as it is quite self-explanatory and clearly specifies the government’s stand on this issue:

i) “The CBDT, vide notification S.O. No. 752(E), dated 28.3.2008 have notified return forms for the assessment year 2008-09. With a view to enabling tax payers to file returns in the electronic mode, these returns (except ITR-7) have been made annexure-less. The instructions for filling up the return forms clearly stipulate that “No document (including TDS/TCS certificate, report of audit) should be attached to this form. Official receiving the return has been instructed to detach all documents enclosed with this form and return the same to the assessee.”

ii) It has come to the notice of the board that in spite of the directions contained in the instructions for filing the return forms, the practice of accepting returns along with annexures is still continuing. This practice goes against the expressed policy of the government and is not in consonance with the legal provisions. Therefore, it is emphasised that chief commissioners of income tax must ensure strict compliance with the provisions of law. It may be reiterated that all annexures accompanying the income tax return forms should be detached and returned to the taxpayers by the receiving official.

iii) Further, while processing such returns under section 143(1), the credit for tax deducted at source (TDS)/Tax collected at source (TCS) shall be allowed on the basis of details furnished in the relevant schedules of the return forms subject to Instruction No.6/2008 dated June 18, 2008 issued by the Central Board of Direct Taxes in respect of assessment year 2007-08 or any similar instructions as may be issued for assessment year 2008-09.

No disallowance of claim for TDS/TCS shall be made by the assessing officer only on the ground that the TDS/TCS certificates have not been filed along with the return of income or Form ITR-V. The same procedure shall also apply in respect of challans relating to advance tax and self assessment tax.

iv) Assessees are advised to retain with themselves all annexures relating to computation of income, TDS/TCS certificates, counterfoil of challans relating to payment of advance tax and self assessment tax, audit reports and any other document which they would have otherwise liked to file in support of their claims. The original documents and certificates may be produced by them as and when called for by the assessing officer.

v) The board came to know that ITR-V verification forms are being received without giving them a receipt number. Since ITR-V verification form is an acknowledgement, the same should be received by giving a return receipt number, as if it were a return. Separate counters may be set up to receive such ITR-V verification forms. These ITR-V verification forms should be kept in safe custody.

To conclude

The circular finally lays all doubts to rest. Your tax return does not require any attachment, annexure or supporting document to be submitted along with. However, point No. (iv) above is important.