An income tax return is a form where taxpayers have to declare their taxable incomes from all sources, eligible deductions, and tax payments if any. This is called ITR Filing Procedure.

If you have paid more taxes than “payable”, you are entitled to Income tax refund. If the reverse is the case, you should pay remaining amount before filing your Income tax return. Cases, where more taxes have been paid beforehand, are TDS or Advance Tax paid by you. In such a scenario, you should show correct incomes and taxes in your Tax Returns.

Income tax return forms range from ITR 1 to ITR 7, used for different types of income and different types of entities. Depending on the type of forms, there are various disclosure requirements.

Filing ITR in India is completely online and paperless. There is no need for you to submit physical return at the local income tax offices. All documents, wherever necessary need to be submitted online. Income tax return is to be filed for a particular Financial Year (i.e. April to March) irrespective of Accounting Year adopted by you.

(a) Filings of Returns

Who can file ITR 1 Form?

ITR 1 Form is for individuals that have income up to Rs.50 lakh lakhs. The individuals earning income from the following sources can file ITR 1 Form:

1. Salaried person- Salary refers to the remuneration or consideration that a person receives for the services he or she has to render under the contract of employment. The Income Tax Act,1961 includes the following under the salary income
2. Wages
3. Pension
4. Annuity
5. Advance salary paid
6. Leave Encashment
7. Fee, prerequisites, commission, profits besides or in lieu id the salary or wages
8. Transferred balance in recognized provident fund
9. Annual accretion to the recognized provident fund
10. Central Government contribution or an employer contribution to Pension account as mentioned in Section 80 CCD of the Income Tax Act.
11. One house property: If the taxpayer is the owner of a property from which he or she is earning rent, the rent proceeds become taxable.
12. However, if the taxpayer is using the owner of a property from which he or she is earning rent, the rent proceeds become taxable. However, if the taxpayer is using the property for running some business or profession the same would be taxable under the heading “Income from business or profession”.
13. Other sources (does not include income earned from winning lottery or racehorses)
14. Agricultural income (Upto to Rs. 5000)

Who can file Form ITR-2?

ITR form 2 can be filed by individuals and the HUF who are not eligible to file form ITR-1 receiving income from the “profits and gains from business or profession”. Thus persons having come from the following sources are eligible to file Form ITR 2:

1. Income from Salary/Pension
2. Income from House property ( can be from more than one house property)
3. Income from Capital gains
4. Income from other sources (Lottery, bets on horses, and other gambling)
5. Foreign Assets/Foreign Income
6. Agricultural income more than Rs.5000
7. A resident is not an ordinary resident and an NRI.
8. Also, a director of any company and an individual who is invested in unlisted equity shares of a company should file their returns in ITR-2

Who can file ITR 3?

ITR 3 For is to be filed by the individuals and the HUFs who earn income from carrying a profession or from a proprietary business. ITR 3 Form can be used when the income of the assesse falls in the categories that are mentioned below:

1. Income from carrying a profession
2. Income from proprietary business
3. Apart from this, the returns of the business can also include the house property, the salary or pension, and the income from other sources.

Who is Eligible to file Form ITR 4?

Individuals whose income comes from the following sources have to file ITR 4 Form:

1. Business Income under Section 44AD/Section 44AE.
2. Income from a profession as per Section 44ADA.
3. Income up to Rs. 50 lakh from Salary or Pension.
4. Income up to Rs. 50 lakh from One house property (that does not include the brought forward loss o loss that is to be brought forward under this head)
5. Income from other sources up to Rs.50 lakh (does not include winning from lottery or horse races)
6. Form ITR 4 can also be filed by the freelancers if the income is not exceeding Rs.50 lakh.

Who is eligible to file ITR 5 Form?

ITR 5 can be filed by the following people :

1. A firm
2. A Limited Liability Partnership
3. Association of Persons
4. Body of Individuals
5. Artificial Judicial Persons that are referred to in Section 2 (31) (vii)
6. The local authority that is referred to in Section 160(1) (ii) or 160 (1) (iv)
7. Cooperative Society
8. Societies that are registered under Societies Registration Act, 1860 or under any state law trust ( except the trusts that are eligible for ITR 7 Form Filing)
9. Estate of the deceased person
10. Business trust referred to in Section 139 (4E)
11. Investment fund referred to in Section 139 (4F)

Who is eligible to file ITR 6 Form?

1. ITR 6 Form is to be filed by every company irrespective of its structure registered under the Companies Act 2013 or the earlier Companies Act 1956. However, the companies whose source of income comes from the property that is held for religious or charitable purposes are not required to file ITR 6 Form.
2. If the sales, turnover, or gross receipts are more than Rs.1 crore in the preceding financial year the entity must get the accounts audited from a certified Chartered Accountant.

Who is eligible for ITR 7 Form filing?

1. ITR 7 u/s 139 (4A)

Individuals having income from the property that is used solely or partially for charitable or religious purposes and such property is to be held under a legal obligation or trust.

2. ITR 7 u/s 139 (4B)

This section applies specifically to the political parties. Under Section 13 A the political parties are exempted from filing the income tax return provided that the parties are filing the annual returns through Form ITR 7.

3. ITR 7 u/s 139 (4C)

Under this the ITR 7 is to be filed by the following entities:

• Association that is conducting scientific research.
• News agency
• Association u/s 10 (23A)
• Other enlisted institues u/s 10 (23B)

4. ITR 7 u/s 139 (4D)

Schools, colleges, and institutions are not covered under any section of the Income Tax Act and are required to file the ITR 7 under this regulation.

5. ITR 7 u/s 139 (4E)

Filing the returns of the income done by a business trust.

6. ITR 7 u/s 139 (4F)

Is to be filed by any investment fund that is referred to in section 115 UB. There is no necessity to furnish the returns of income or loss under any provision of this section.

(b) Filing of Appeals

This article has been is to focus on the provision and procedures relating to Filing the Appeals. One Law Dictionary defines ‘appeal’ as a proceeding taken to rectify an erroneous decision of a court by submitting the question to a higher court, or court of appeal. Right to appeal under income tax law is a creation of statute and not an inherent right. Appeal can be filed only against orders listed in the Income Tax Act

Income tax liability is determined at the level of Assessing Officer first. A tax payer aggrieved by various actions of Assessing Officer can appeal before Commissioner of Income Tax (Appeals). Further appeal can be preferred before the Income Tax Appellate Tribunal. On substantial question of law, further appeal can be filed before the High Court and even to the Supreme Court. With the ladder up approach appeal procedures are explained below:

1. Appeal before Commissioner (Appeals)
2. Appeal before Income Tax Appellate Tribunal
3. Appeal before High Court
4. Appeal before Supreme Court

1. Appeal before Commissioner (Appeals)

When appeal can be filed before Commissioner (appeals)

When a tax payer is adversely affected by Orders as under passed by various Income tax authorities: Order passed against the taxpayer in a case where the taxpayer denies the liability to be assessed under Income Tax Act. Intimation issued under section 143(1)/ (1B) where adjustments have been made in income offered to tax in the return of income. Intimation issued under section 200A(1) where adjustments are made in the filed statement. Assessment order passed under section 143(3) except in case of an order passed in pursuance of directions of the Dispute Resolution Panel An assessment order passed under section 144. Order of Assessment, Re-assessment or Re-computation passed after reopening the assessment under section 147 except an order passed in pursuance of directions of the Dispute Resolution Panel An order referred to in section 150. An order of assessment or reassessment passed under section 153A or under section 158BC in case of search/seizure. Order made under section 92CD(3). Rectification order passed under section 154 or under section 155. Order passed under section 163 treating the taxpayer as agent of non-resident. Order passed under section 170(2)/(3) assessing the successor of the business in respect of income earned by the predecessor. Order passed under section 171 recording the finding about partition of a Hindu Undivided Family. Order passed by Joint Commissioner under section 115VP(3) refusing approval to opt for tonnage-tax scheme to qualifying shipping companies. Order passed under section 201(1)/206C(6A) deeming person responsible for deduction of tax at source as assesse-in-default due to failure to deduct tax at source or to collect tax at source or to pay the same to the credit of the Government. Order determining refund passed under section 237. Order imposing penalty under section(s) 221 / 271 / 271A / 271AAA /271F / 271FB / 272A / 272AA / 272B/ 272BB/ 275(1A)/ 158B FA(2) / 271B / 271BB / 271C / 271CA / 271D / 271E / 271AAB.

Time for filing appeal

Within 30 days from the date of service of notice of demand relating to assessment or penalty order. The Commissioner (Appeals) may admit an appeal after the expiration of period of 30 days, if he is satisfied that there was sufficient cause for not presenting the appeal within the period of 30 days.

2. Appeal before Income Tax Appellate Tribunal

When appeal can be filed before ITAT

Tax payer can file appeal before the Income Tax Appellate Tribunal against the following orders: 1) Order by Commissioner(Appeals) u/s 250/154/271/ 271A/272A; 2) Order by Commissioner u/s 12AA on registration application by a charitable or religious trust 3) Order by Commissioner u/s 263 revising Assessing Officer’s order considered prejudicial to the interest of revenue; 4) Order by Commissioner u/s 154 to rectify an order u/s 263 5) Penalty order passed by Commissioners u/s 271 or section 272A; 6) Penalty order passed by Chief Commissioner u/s 272A; 7) Order passed by Assessing Officer u/s 143(3)/147 in pursuance of direction of Dispute;

Time for filing appeal

Within 60 days of the date on which order appealed against is communicated to the taxpayer or the Commissioner

3. Appeal before High Court

Appeal against Appellate Tribunal’s order lies with the High Court, Where the High Court is satisfied that the case involves a substantial question of law. Appeal to the High Court against Appellate Tribunal’s order can be filed by the tax payer or Principal Chief Commissioner/Principal Commissioner/Chief Commissioner/Commissioner within 120 days of receipt of the order and in the form of memorandum of appeal, precisely stating the substantial question of law involved. If the High Court is satisfied that a substantial question is involved, it would formulate that question. High Court hears the appeal only on the question of law so formulated; however, the respondents can argue at the time of hearing that case does not involve such question of law. Appeal filed before High Court is heard by bench of not less than two Judges and decision is by majority.

4. Appeal before Supreme Court

Appeal against High Court’s order in respect of Appellate Tribunal’s order lies with the Supreme Court in those cases, which are certified to be fit one for appeal to the Supreme Court. Special leave can also be granted by the Supreme Court under Article 136 of the constitution of India against the order of the High Court.