One-Time Relaxation For Verification of Income Tax Returns

The Central Board of Direct Taxes (CBDT) via a circular No.21/2021 dated December 28, 2021, has announced that all the income tax returns that were filed last year and are pending for verification, either due to non-submission of ITR-V or e-verification, can be verified till February 28, 2022. Once the ITR is verified, then these tax returns will be processed by the tax department by June 30, 2022. The current article briefly covers the original provisions attached to the verification of income tax returns and the Government’s One-Time Relaxation For Verification of Income Tax Returns.

Synopsis of CBDT Circular

Going through the records, the Central Board of Direct Taxes recently noticed that a vast number of income tax returns are pending only because of the non-submission of duly signed ITR-V. To overcome the same, the Government has announced a one-time relaxation for verification of the income tax return for the last year, which is pending only for want of ITR-V.

Verification of Income Tax Return

Verification of return is a crucial step to complete the process of filing of Income-tax return. After successfully filing the income tax return, a taxpayer must verify it within the time limit of 120 days. If a return is filed but not verified within such permitted time, it shall be deemed as an invalid return. Such an ITR will not be taken up for processing by the tax department till it is verified. It will be assumed that you have not filed your income tax return for that particular year.

Provisions relating to verification of income tax returns

In respect of an Income-tax Return (ITR) which is filed electronically without a digital signature, the taxpayer is required to verify it using any one of the following modes within the time limit of 120 days from the date of uploading the ITR:

Through Aadhaar OTP
By logging into an e-filing account through net banking
EVC through Bank Account Number
EVC through Demat Account Number
EVC through Bank ATM
By sending a duly signed physical copy of ITR-V through the post to the CPC, Bengaluru

Noticeably, the first five options/ ways, narrated above, are electronic verification, and the last i.e., the sixth option, is offline verification. In case the taxpayer has selected the sixth option, the taxpayer is required to send a copy of ITR-V to the Income Tax Department within 120 days of uploading/ filing the return to CPC, Bengaluru through speed post.

One-time relaxation

The Central Board of Direct Taxes has come up with one-time relaxation to verify e-filed Income Tax Returns for Assessment Year 2020-2021. The purpose, applicability, and non-applicability of one-time relaxation are explained hereunder.

Purpose of One-time Relaxation

Following are the two main purposes of one-time relaxation-

To resolve the grievance of the taxpayers associated with non-submission of ITR-V of the previous assessment year
To regularize the results, which have either become non-est (i.e., invalid) or are pending because of non-receipt of ITR-V.

Applicability of One-time Relaxation

The one-time relaxation is available only if the following two conditions are satisfied-

The returns for the relevant Assessment Year are electronically uploaded within the time limit specified under section 139 of the Income Tax Act
ITR-V of the same is pending submission

Non-applicability of one-time relaxation-

The one-time relaxation shall not be available to the cases, wherein, the income tax department, during the intervening period, has already taken recourse to other possible measures to ensure filing of the taxpayer’s income tax return.

New deadlines to complete ITR pending E-Verification

If both the above conditions are satisfied, then, as a measure of relaxation, the taxpayer is permitted to complete the verification of any of the pending returns for the Assessment Year 2020-2021 by February 28, 2022 If the taxpayer fails to duly submit a copy of ITR-V, the e-return filed shall be considered invalid. It is worth noting that verification of electronically filed returns is important since the taxpayer doesn’t sign the return at the time of filing. Further, in case the return is filed using the ‘Digital Signature Certificate’, the verification of the same is not required.

Prerequisites for ITR Verifications

Prerequisites for Different ITR Verifications Methods are tabulated here:

Sl.No	e-Verification Method	Prerequisite
1	Digital Signature Certificate	Valid and active DSC Em-signer utility installed and running on your PC Plugged-in DSC USB token in your PC DSC USB token procured from a Certifying Authority provider The DSC USB token is a Class 2 or Class 3 certificate.
2	OTP on Mobile Number registered	PAN should be linked with Aadhaar
3	Bank Account EVC / Demat Account EV	Pre-validated and EVC-enabled bank / demat account
4	Net Banking	PAN should be linked with bank account Net Banking should be enabled for the preferred bank account

Procedure to verify ITR

As mentioned above, In respect of an Income-tax Return (ITR) which is filed electronically without a digital signature, the taxpayer is required to verify it using any one of the following modes within the time limit of 120 days from the date of uploading the ITR:

Through Aadhaar OTP

To verify your ITR using the Aadhaar-based one-time password (OTP), the mobile number must be linked to Aadhaar and registered as such in the Unique Identification Authority of India (UIDAI) database and the PAN must be linked with Aadhaar

On the 'e-Verify' page, select 'I would like to verify using OTP on the mobile number registered with Aadhaar' and click 'Continue'.
A pop-up will appear on the screen. Non-filer will be required to select the tick box saying 'I agree to validate my Aadhaar details' and click on 'Generate Aadhaar OTP'.
An SMS with the 6-digit OTP will be sent to the registered mobile number.
Enter the OTP received in the box where it is required and click on submit. On successful submission, the ITR will be verified. OTP is valid only for 15 minutes.

Net-banking

The second method of verifying ITR is via Net Banking. On the 'e-Verify' page, select 'Through Net Banking' and click on 'Continue'.
Select the bank through which the taxpayer wants to verify your ITR and click on 'Continue'.
A pop-up will appear on the screen containing a disclaimer. Read and click on 'Continue'.
Next, the taxpayer will be required to log in to Net Banking of your bank account. Select the 'e-Verify' option which is usually under the 'Tax' tab.
The taxpayer will be redirected to the e-filing website of the income tax department.
Go to the respective ITR form and click on e-Verify. The tax return will be e-verified successfully.

Bank account

The third option of verifying ITR is by generating Electronic Verification Code (EVC) via one's bank account. The taxpayer must have a pre-validated bank account to be able to generate EVC. Do keep in mind that pre-validation of a bank account is a must for receiving an income tax refund. On the e-Verify page, select 'Through Bank Account' and click on 'Continue'. The EVC will be generated and sent to the mobile number and email ID registered with the mobile number and email ID registered with the pre-validated and EVC-enabled bank account. Enter the EVC received on the mobile number and email ID and click on e-Verify.

Demat account

The process of verifying ITR via a Demat account is similar to verification via a bank account as mentioned above. On the e-Verify page, select 'Through Demat Account' and click 'Continue'. The EVC will be generated and sent to your mobile number and email ID registered with your pre-validated and EVC-enabled Demat account. Enter the EVC received on your mobile number and email ID registered with your Demat Account and click e-Verify.

Bank ATM

The EVC can also be generated via a bank ATM card. This facility is available only via limited banks which are - Axis Bank, Canara Bank, Central Bank of India, ICICI Bank, IDBI Bank, Kotak Mahindra Bank, and State Bank of India Visit your bank's ATM and swipe your ATM card; enter your ATM PIN and select Generate EVC for Income tax filing. An EVC will be sent to your mobile number and email ID registered with the e-filing portal. Do keep in mind that your PAN must be registered with the bank. Go to the 'e-verify returns' option. Select the ITR to verify it and select the option 'I already have an Electronic Verification Code (EVC). Enter the EVC code and click on e-Verify.

Sending signed ITR-V/Acknowledgement Receipt

If the taxpayer cannot verify the ITR using any of the electronic methods mentioned above, then they can send a signed copy of ITR-V (Acknowledgement receipt) to the tax department. If you wish to send ITR-V for verifying your tax return, remember the points below. ITR-V is a one-page document that must be signed in blue ink. It must be sent either via speed post. Address of CPC Bangalore for speed post: 'CPC, Post Box No - 1, Electronic City Post Office, Bangalore - 560100, Karnataka, India'.

The taxpayers are not required to send any supporting document along with ITR-V.
The taxpayer will receive an intimation via SMS on the registered mobile phone and email ID once the ITR is received by the tax department. This intimation is only for receipt of ITR-V, the intimation for processing of tax return is separate.

Other Announcements

The CBDT has also issued directions that-Verification of such returns shall be processed by 30.06.2022, and intimation of processing of such returns shall be sent as per the laid down procedure.
In refund cases, the provision of section 244A(2) would apply while determining the interest on refund.
In case the taxpayer concerned does not get her/his return regularized by furnishing a valid verification (either ITR-V or EVC/OTP) by 28.02.2022, necessary consequences as provided in law for non-filing the return may follow

The Government’s present one-time relaxation is undoubtedly a good opportunity for the non-filers to regularize their pending income tax return and receive the pending income tax refund, if any, stuck up due to non-filing ITR-V. But it is vital for the non-filers to take note that for availing the one-time relaxation, the taxpayer is required to complete the verification i.e., submit the copy of duly signed ITR-V to CPC by February 28, 2022