ITR-U Under Section 139(8A): A Costly Last Resort After 31st December for Missed Belated and Revised Returns

ITR-U: The High-Cost Compliance Window Beyond 31st December

A taxpayer who misses the 31st December deadline for filing a belated or revised return exits the normal compliance cycle. The only remaining recourse thereafter is the updated return mechanism under section 139(8A), but at a significantly higher cost.

A. Belated Return – Permissible Only up to 31st December
Where a return is not furnished within the due date under section 139(1), a belated return may be filed under section 139(4) but only up to the statutory outer limit.
The outer limit for filing a belated return is 31st December of the relevant Assessment Year.
Once 31st December lapses:

• No return can be filed under section 139(1) or 139(4).

• Revision under section 139(5) becomes legally impossible.

• The assessee exits the ordinary return-filing framework.
  This position remains unchanged even after the amendment introducing section 139(8A).

B. Revised Return – Contingent Right
A revised return is not an independent right; it is available only if an original/belated return exists under section 139(1) or 139(4).
The time limit for filing a revised return is also 31st December of the Assessment Year.
If no return exists by 31st December, the right to revise never comes into existence.

C. Updated Return – A Penal Compliance Window (Section 139(8A))
The updated return mechanism allows filing up to 48 months from the end of the relevant Assessment Year.
This is not an extension of the original return system; it is a distinct disclosure framework designed to tax income that escaped assessment after the normal timelines close.
ITR-U functions as a corrective window, not a benefit or relief mechanism.

D. Mandatory Additional Tax on Updated Returns
Before filing ITR-U, the assessee must pre-pay:

• Tax on updated income, and

• Interest under sections 234A, 234B and 234C (as applicable)

In addition, graduated additional tax is levied on the aggregate of tax + interest:

E. Restrictions on Filing ITR-U
An updated return cannot be filed if it:

• Results in a refund

• Reduces tax liability

• Converts income to loss

• Reduces or increases a declared loss

ITR-U is further barred when:

• Assessment, reassessment, search or survey is initiated

• Information under international exchange is received

• Prosecution proceedings have commenced

Conclusion:
ITR-U is not a substitute for timely compliance. It is a late-stage corrective measure with embedded financial consequences. Once 31st December is crossed, the choice is no longer between filing late or ignoring the return; it becomes a choice between disclosure with cost or prolonged non-compliance risk.


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https://www.mytaxexpert.co.in/uploads/1766977821_51.UpdatedReturn.pdf