Under Section 139C of the Income Tax Act, 1961, the Central Board of Direct Taxes (CBDT) has the authority to exempt certain taxpayers from submitting documents, statements, or audit reports along with their return, provided these are furnished on demand during assessment.
1. Key Provisions of Section 139C
(A) CBDT’s Rule-Making Power
The Board may issue rules to:
- Specify classes of personsexempted from attaching documents (e.g., salaried employees, small taxpayers) .
- Define which documents (e.g., receipts, audit reports) need not be filed initiallybut must be produced if demanded by the Assessing Officer (AO).
(B) Grandfathering of Old Rules
- Rules issued under the omitted proviso to Section 139(9)(before its deletion in 2007) are deemed valid under Section 139C.
2. Scope of Exemptions
- Documents Covered:
- Audit reports (e.g., Form 3CA/3CB, 10B).
- Investment proofs (e.g., 80C, 80D receipts).
- Income-related statements (e.g., capital gains details).
- Exception: Section 139D(electronic filing) overrides these exemptions for digitally mandated filings.
3. Practical Implications
- Reduced Compliance Burden: Taxpayers in notified categories (e.g., salaried individuals with TDS) need not upload documents unless asked.
- On-Demand Submission: AO may require exempted documents during scrutiny.
- E-Filing Simplification: Aligns with the move toward annexure-less returnsfor certain taxpayers.
4. Penalties for Non-Compliance
- Failure to produce documents when demandedmay lead to:
- Defective return noticeunder Section 139(9).
- Best judgment assessmentunder Section 144
