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Persons carrying on agency business or earning commission income should revise their return for A.Y 2011-12, if original return filed u/s 44AD
In the Finance Bill 2012 section 44AD has been amended retrospectively w.e.f A.Y. 2011-12 to the effect that presumptive scheme under the said section is not applicable to:
1. Persons carrying on profession as referred to in section 44AA(1) or
2. Persons earning income in the nature of commission or brokerage income or
3. Persons carrying on any agency business.
The said amendment has been made with retrospective effect from A.Y. 2011-12. Retrospective amendment is either made to validate an earlier levy or to make clear the legislative intent.
Professionals are not covered under the presumptive scheme of section 44AD that was very much clear from the definition of eligible business as the word specially business was mentioned therein and business cannot include professions.
However, whether agency business or income from commission was covered under presumptive scheme under section 44AD or not, it was not clear from the wording of section 44AD and definition of eligible business contained in the explanation to the said section as word business has only been mentioned in the definition of eligible business and agency business could have been interpreted as business by any rational person.
Therefore there must have been certain cases where the assessees carrying on some agency business or earning income from commission may have filed their return of income under the presumptive income scheme of section 44AD. In such cases if such assessee's(carrying on agency business or earning income from commission) turnover or income exceeds the limits prescribed u/s 44AA then such assessee would be required to maintain regular books of accounts and he should have filed his return of income as per balance sheet and books of accounts.
Therefore such assessee should revise his return of income and file his return in accordance with his books of account and balance sheet, as such assessee carrying on agency business is not covered u/s 44AD.
Thus after the retrospective amendment in section 44AD w.e.f A.Y. 2011-12, the assessees carrying on agency business or earning income from commission should revise their return of income of A.Y. 2011-12, if they have filed their return of income persuming them to be covered under section 44AD.