Ritesh Agarwal v. ITO - Updated return under Section 139(8A) - validity and additional tax

The ITAT Kolkata Bench (in an early case on updated returns) examined the validity of an updated return filed under Section 139(8A) where the original return disclosed lower income. Held that the updated return is valid even where the original return was assessed and the taxpayer seeks to disclose additional income via ITR-U to avoid litigation. The Tribunal confirmed that the additional tax of 25% (if within 12 months of AY end) or 50% (beyond 12 months) is a mandatory payment and not a penalty - it must be paid before or at the time of filing the updated return. Noted that ITR-U cannot be filed to reduce tax liability - it is only for disclosure of additional income.

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