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CMA Final · Direct Tax Laws and International Taxation · Return of Income

Anil furnished his return for the tax year on time and later wishes to furnish an updated return. Which of the following situations does NOT bar him from furnishing an updated return under section 263(6)?

He can furnish it where the updated return increases tax liability and no bar applies. Section 263(6) bars updated returns that reduce tax, increase refunds, repeat an earlier updated return, follow pending or completed assessment, or follow search or survey.

  1. AThe updated return would reduce the total tax liability determined on his original return
  2. BAn updated return for the same tax year has already been furnished
  3. CA survey under section 253, other than sub-section (4) of that section, was conducted in his case for that tax year
  4. DThe updated return would increase his tax liability, and no assessment proceedings are pending for that yearCorrect

Explanation

Clause (c) bars an updated return that reduces tax liability, one where an updated return was already filed, or one where assessment proceedings are pending or completed. Clause (d) bars it where a survey of the stated kind has been conducted. An updated return that raises tax with none of these bars present remains permitted.

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