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Sunday, March 19, 2017

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Proposed Amendments in Section 271 F and Section 234 F for avoiding hardships to taxpayers

The Finance Bill, 2017 proposes to levy fees of Rs.5,000 in a case where the return is furnished after the due date but on or before 31St December of the relevant assessment year and Rs.10,000, in other cases.

Section 271 F
Proposed Amendments in Section 271 F and Section 234 F for avoiding hardships to taxpayers
The Finance Bill, 2017 proposes to levy fees of Rs.5,000 in a case where the return is furnished after the due date but on or before 31St December of the relevant assessment year and Rs.10,000, in other cases. However, it is also proposed to restrict the fees to Rs.1,000, where the total income does not exceed five lakh rupees.

Current provisions provide for a penalty of Rs.5,000 under section 271 F in the case where the return is furnished after the end of relevant assessment year provided there is no reasonable cause for such delay.

The proposal is made with a view to ensure that returns are filed within the due dates specified in section 139(1). However, fees proposed under section 234F will be leviable on all assesses who have furnished return beyond the due date specified under section 139(1) irrespective of the reason for such delay and whether all the taxes have been paid through TDS or Advance Tax.


Also, the assessee cannot justify his cause for delay under any appeal against the same as there is no proposed provision to consider the reasonable cause for delay on the part of the assessee.

 Delay in the filing of return is in contravention of law for which penalty should be attracted. The same can be waived if reasonable cause is proved.

Suggestion:

It is suggested that proposed fees under section 234F for delayed filing of return may be withdrawn and necessary amendments are made in section 271F.

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