Forgot to Claim Deduction or Filed Wrong ITR? Correct Your ITR with Revised Return u/s 139(5)

If you have made a mistake in filing your Income Tax Return (ITR), do not worry. The Income-tax Act, 1961 provides scope to correct such mistakes. In this article, we will discuss in detail what can be done if you discover an error in your ITR.

Taxpayers have two principal options in such situations:

1. Revised Return u/s 139(5)
2. Rectification of Return u/s 154

This article will primarily deal with Revised Return u/s 139(5), which is the more substantive and commonly used provision. Rectification under Section 154, being a narrower remedy, will be discussed separately in another article. For that, you may click on the relevant link where all my other articles are available, including one dedicated to rectification of ITR.

Through a revised return, you can rectify several mistakes such as:

• Non-claiming of eligible deductions,
• Non-reporting of certain incomes,
• Incorrect statements or misclassification,
• Omission of TDS/TCS credits.

We will now examine in detail each statutory and practical aspect of this provision.

1. Statutory Text and Core Rule

• Exact wording of Section 139(5): "If any person, having furnished a return under sub-section (1) or sub-section (4), discovers any omission or any wrong statement therein, he may furnish a revised return at any time before three months prior to the end of the relevant assessment year or before the completion of the assessment, whichever is earlier."
• Deadline Rule: The time limit for filing a revised return is up to three months prior to the end of the assessment year (i.e., 31st December of the AY), or before completion of assessment, whichever is earlier. This timeline was introduced by the Finance Act, 2021, replacing the earlier "end of the AY" deadline.

2. Who May File and What Can Be Revised

• Eligible Persons: Any assessee who has filed:
• An on-time return under Section 139(1), or
• A belated return under Section 139(4).

CBDT tutorials confirm that belated returns are also revisable.

• Not Eligible: Returns filed in response to notices under Sections 142(1), 148, 153A, etc. cannot be revised under Section 139(5).
• Scope of Revisions: Any omission or wrong statement can be corrected, including:
• Income reporting errors,
• Deduction/exemption claims,
• TDS/TCS credits,
• Head of income classification,
• Selection of wrong ITR form.

The revised return completely substitutes the original return.

3. Time Limits with Current Assessment Year Examples

• General Rule:
• Up to 31st December of the relevant AY, or
• Before completion of assessment, whichever is earlier.
• Assessment Completion vs Intimation:
• Intimation u/s 143(1) is not an assessment; hence, revision is still possible after receipt of 143(1).
• Illustrative Calendarised Dates:

If scrutiny assessment u/s 143(3), best judgment assessment u/s 144, or reassessment u/s 147 is completed earlier, the right to revise ceases on that earlier date.

4. Legal Constraints and Leading Case Law

4.1 Substitution Effect - No Transformation into Loss Return

• A revised return substitutes the original return in law.
• However, a revised return cannot be used to convert an on-time return u/s 139(1) into a loss return u/s 139(3) for the purpose of carrying forward losses.
• Supreme Court Rulings:
• Wipro Ltd. v. CIT
• Shriram Investments Holdings Ltd. (2024)

Key Ratio: Section 139(5) cannot be invoked to secure carry forward of losses if a valid Section 139(3) return was not filed within due date.

4.2 Fresh Claims - AO vs Appellate Forums

• Before AO: Fresh claims cannot be allowed by the Assessing Officer unless made through a valid revised return.
• Goetze (India) Ltd. v. CIT (2006) 284 ITR 323 (SC).
• Before CIT(A)/ITAT: Appellate authorities can admit new claims even without a revised return.
• CIT v. Pruthvi Brokers & Shareholders (2012) 349 ITR 336 (Bom HC).

Thus, if a deduction/exemption is missed in the original return, the safe and proper course is to file a revised return.

4.3 Intimation u/s 143(1)

• Intimation is not an assessment.
• Filing a revised return after such intimation is fully permissible within the 139(5) time limit.

4.4 Options Requiring Exercise by Due Date

• Certain options, such as opting for specific tax regimes (e.g., u/s 115BAC) or particular exemptions, must be exercised on or before the due date u/s 139(1).
• A later revised return cannot cure failure to exercise such options in time.
• Case Law: Shriram Investments Holdings Ltd. (2024) relying on Wipro Ltd.

5. Practical Strategic Uses of Section 139(5)

A. File Early, Then Stage Revisions

• No numerical cap on revisions, only time-bound restriction.
• Advantageous to file an early conservative return, then revise later once AIS/TIS, Form 67, or proofs are available.

B. Fresh Claims Before AO

• AO cannot entertain new claims otherwise.
• Use revised return for claims such as 80C, 80G, 24(b), exemptions, etc.

C. Appeal Safety-Net

• If time has lapsed, appellate authorities can allow new claims (Pruthvi Brokers case).

D. Change of Head/Character of Income

• For example, securities income can be shifted between Business Income and Capital Gains, consistent with CBDT Circular 6/2016.

E. Foreign Tax Credit (FTC)

• File Form 67 and then revise return.
• Courts have held delay in filing Form 67 should not defeat FTC if filed before assessment.

F. Capital Gains Relief under Section 54 Series

• Eligible exemptions can be claimed if conditions are satisfied.
• Some HCs permit deposit into CGAS before 139(4) due date.

G. Penalty Risk Mitigation

• Section 270A(6) excludes bona fide revised returns filed voluntarily before detection.

H. TDS/TCS Mismatch

• File revised return to align income and TDS data.
• Protect against double taxation via Section 205 (e.g., Yashpal Sahni, Bom HC).

I. Unabsorbed Depreciation

• Carry forward u/s 32(2) available even without a timely 139(3) loss return.
• Virmani Industries Ltd. (SC).

J. Statutory Forms Filed Late

• Apply for condonation u/s 119(2)(b), then revise return to validate claim (e.g., Form 10B/10BB, 10-IC/10-ID).

K. Salary Arrears Relief

• File Form 10E and then revise return to claim relief u/s 89(1).

L. AIS/TIS Mismatches

• Rectify AIS through feedback mechanism and then revise return to match.

6. Interplay with Other Remedies

• Rectification u/s 154: Applicable only for mistakes apparent from record in intimation or order.
• Updated Return u/s 139(8A): If 139(5) deadline missed, an ITR-U may be filed with additional tax. Finance Bill 2025 proposes extending time from 24 to 48 months.
• Condonation u/s 119(2)(b): CBDT may condone delay in refund or loss carry-forward cases (Circular No. 9/2015, 11/2024, 07/2025).

7. Practical Compliance Checklist for CAs

1. Confirm that assessment is not completed and 31st December deadline not crossed.
2. Select correct remedy:
   • Substantive corrections → Section 139(5)
   • Apparent mistake → Section 154
   • Time-barred → Section 139(8A) or 119(2)(b) condonation
3. Upload revised audit reports if applicable (44AB, 92E, 80-IA, etc.).
4. E-verify revised return within 30 days.
5. Ensure no attempt to exercise lapsed options (e.g., 115BAC opt-in/opt-out).

8. Frequently Asked Questions (FAQs)

• Can a belated return be revised? Yes. Section 139(4) is expressly included.
• Can a revised return be filed after receiving intimation u/s 143(1)? Yes, within the 139(5) timeline.
• Can tax regimes be switched via a revised return? Only if law allows exercise of option till due date u/s 139(1).
• Can income be reduced through a revised return? Yes, if legally supportable. But cannot be converted into a loss return for carry-forward.
• Is there any penalty for revision? No penalty merely for revision. However, misreporting/under-reporting consequences u/s 270A may apply if facts warrant.

Conclusion

In this article, we have discussed in detail the scope and advantages of filing a Revised Return under Section 139(5). However, in my considered professional opinion, an assessee should first evaluate whether the mistake can be rectified through Rectification of Mistake under Section 154, as this route is often more beneficial and involves comparatively lesser risks. Only where the error does not fall within the ambit of Section 154 should one resort to filing a revised return under Section 139(5).

Based on my past professional experience, I have observed instances where assessees received notices after filing revised returns. It is important to clarify that there is no statutory presumption that every revised return will automatically result in a notice; however, the possibility of departmental scrutiny cannot be ruled out. Therefore, it is always advisable to consult a qualified professional before proceeding with the filing of a revised return.

The author can also be reached at varunmukeshgupta96@gmail.com