Suggestions on Clause 75 of Finance Bill 2017 – Section 234F – Fee for delayed filing of return Removal of provision levying fees to prevent undue hardship for the genuine assessees

The Finance Bill, 2017 proposes to levy fees of Rs.5,000 in case where 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 penalty of Rs.5,000 under section 271 F in case where return is furnished after 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 assessees 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 assessee.

Further, fee is generally levied in respect of services rendered. Whereas collection of tax by the Government is a sovereign function, as such, there is no rendering of services. Delay in 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It is suggested that proposed fees under section 234F for delayed filing of return may be withdrawn and necessary amendments be made in section 271F.

Source- ICAI Post-Budget Memoranda-2017

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21 responses to “Section 234F Fee for delayed filing of return to cause undue hardship”

  1. NARENDRA KUMAR says:

    It is great step of Ministry, We should follow the rules. why after due date?

  2. SUDHANSU DAS says:

    PRACTICALLY IT IS HARDSHIP FOR THE TAXPAYER NO CHANGE REQUIRED

  3. N. Krishnaswamy says:

    I know that there are business people who want to file delayed returns and are willing to pay the penalty also. They also want to pay the exact tax , interest and penalty along with the return.

  4. Prabha Dadoo says:

    To pay Income Tax is our duty and Dharma.
    Income Tax laws are not very simple.
    2. The law does not distinguish between educated, uneducated, aged or young, any large no. Of such like parameters.
    3. With the complications of the present laws, in most of the cases, the Income Tax payee has to file the return through Income Tax practitioner or CA,where the taxpayer is dependent on these people.
    4. Under educated, Sr. citizens, other people whose cases require. Insulting the CA/ IT lawyer, women etc. should not be required to pay any type of “Penalties” etc, but in order to check male practices Simple 6% interest and INCOME TAX should be paid by earners. Penalties terrorise the tax payers, and lead to HAUNT the earning people, who therefore often Not File Income Tax Return.

  5. V.K.Dadoo says:

    To pay Income Tax is our duty and Dharma.
    Income Tax laws are not very simple.
    2. The law does not distinguish between educated, uneducated, aged or young, any large no. Of such like parameters.
    3. With the complications of the present laws, in most of the cases, the Income Tax payee has to file the return through Income Tax practitioner or CA,where the taxpayer is dependent on these people.
    4. Under educated, Sr. citizens, other people whose cases require. Insulting the CA/ IT lawyer, women etc. should not be required to pay any type of “Penalties” etc, but in order to check male practices Simple 6% interest and INCOME TAX should be paid by earners. Penalties terrorise the tax payers, and lead to HAUNT the earning people, who therefore often Not File Income Tax Return.

  6. C.A.Govind Prasad Garg says:

    Govt. of India is terroring the common tax payer by making tough tax laws.This is due to not protesting by Traders, Tax Bar Association and Common Tax payer.Leader do not protest because they not not know except bad politics. Bureaucrat makes law to torture the Tax payer. I request the Tax Bar Associations to be united and protest bad tax Laws.

  7. govind prasad garg says:

    Penal provision introduced U/S 234Fmust be opposed by Tax Bar Association of Country. It is terrorism and harrasement to tax payer as well as tax practioner. Strike must be proposed in whole of Country

  8. FCA. Sivaram Choudhury says:

    I think most of the tax amendments are made to give unlimited power to the taxman so that the government can use them later for catching and harassing all their oppenents. If anybody complains they can always say “law is doing its duty. They care the least for the common man. They are busy in their personal revenge.

  9. CA VIJAY MUNGALE says:

    Section 234F should be strongly protested till it is withdrawn by all the CA’S, ADVOCATES & TAX PRACTITIONERS as it is going to hit all of them badly. And make their life miserable. In 45 days time frame from 15th june ( tds cert. rec.last date ) to 31st July how many returns a a practitioner can file maximum. No client will be ready to bear the late fees. In view of the continuous due dates following one another this section 234F will amount to tax terrorism nothing else and should be fought hard unitedly till its death.

  10. Tax.Adv.BSKRAO says:

    INCOME-TAX ACT DRACONIAN LAW

    Original Income-Tax law 1961 was well drafted by Ministry of Finance, Govt. Of India. Modi Govt. in budget 2017 has made the Income-Tax law much more complicated. One side Income-Tax Dept. says only assessees mail address should be provided to enable the assesses file return voluntarily. On the other hand, CBDT amending Income-Tax law in such way that compliance should be given through super specialist in Income-Tax law. Simplification of Income-Tax law and Citizens Charter are only guise.

    Three draconian proposals in this Union Budget that Businesses man should be worried about-

    1. Freedom to Govt officials to “Search/ Survey” with no accountability/
    Change Retrospective from 1962… all cases in pipeline

    Section 132 and 132A amended that “the ‘reason to believe’ or ‘reason to suspect’, as the case may be, shall not be disclosed to any person or any authority or the Appellate Tribunal.”

    This is by far the most harsh and bizarre change.

    It was a settled law that you cannot do any survey till you have any reasons to believe there is something bad against the revenue

    The income tax officers should NOT just disturb anybody on mere suspicion, or any anguish, personal or officials, out of their one-sided sweet will.

    If this amendment is allowed, it may lead to virtual “Taxman’s Terror”.

    The law has been changed retrospectively since 1962 !!!
    That is compromising the cases which are subjudice currently

    2. Freedom to ITO, to Attach properties during the survey: ….

    Section 132(9B) added
    If during survey the ITO feels it is important, then he can take permission of the Director General and attach any property for the realization of the tax.

    Already reason need not be disclosed, as shared above in Point No.1.
    And now with rights of “provisional attachment:” …. The things could go out of hand, if checks and balances are not kept in tune.

    If allowed to go this way, it may lead to “Taxman’s Terror”.

    3. Freedom to ITO, to reopen cases upto 10 years old

    For more than a decade the settled law was that in case of Survey, maximum 6 old years can be re-opened. Prior to that was sealed

    Now, they have taken the option to reopen upto 10 years.
    (condition the loss to revenue is Rs 50 lakhs or more and if it exists in form of an Asset)

    These three harsh changes shall be w.e.f. 1st April 2017, after the passage of Finance Bill and notification. We need to take up these issues with the government to ensure a system of accountability, checks and balances for IT department so as not to unleash unnecessary and avoidable harassment and terror.

    Spread the awareness to all citizens of India

  11. geebee says:

    234F Fee for delayed filing of return to cause undue hardship to tax payers as sec.234A already exist for late filing of return. The general people have to approach tax practitioner/CA to file I.T.return and they are not in a position to complete the task in prescribed time due to other compliances of TDS, VAT ,SER. TAX, EXCISE etc.

  12. GANDHI MOHAN BHARATI says:

    SEc 234 F introduces a Draconian Regime. The Government appears only to penalise and not consider genuine hardships.
    What about the people who are under treatment in Hospitals or under Commatic condition; what about who are travelling; What about Soldiers etc.?
    Particularly Defence and Para Military personnel whether on active duty in Boarders are under training have hardly any time to calculate Income Tax; more so when he is fighting Terrorists or sitting in Siachen without Internet connection; what about the sailor in Submarines.
    Though introducing discipline in adopting due dates may be the reason, a provision without any recourse to remedy will earn the wrath of one and all and in my opinion bad in Law.

  13. Adv Prasad Govindrao Farkandkar says:

    I think penal provision for late filling of return is very hard for assessee practically it is not possible to file proper return within due dates and also…

    Penalty on late filling of return may reduce percentage of Taxpayers

  14. Nimesh Kumar says:

    Informative!!

  15. Vijay Paikoti says:

    It is strange that instead of making the taxation laws simpler and easy on the taxpayers to help them with voluntary compliance, the Govt is trying to terrorise the citizens with harsher tax laws, rules and regulations as if the taxpayer citizens are some criminals living in India. By this method the Govt will lose its credibility and no wonder the taxpayers/citizens may revolt against the Govt and its officers some time in future. We are pondering on why we voted for change in Govt last elections if the change that we got was worse than the earlier Govt!

  16. CA Naresh Khanna says:

    Proposed levy of fees U/S 234 E must be deleted. How govt. expect all returned to be filed by 31 st July. TDS certificate are not available on time.There monsoon season in whole of Country. Date of VAT and TDS Return conflicts. More over after All practitioner will be Idle after 31 st July. Not being able to see TAX CREDIT in 26 AS is sufficient enough cause for delay. Why penalize refund cases ?

  17. CA SHRADDHA SOMANI says:

    JO CHAL RAHA HA WO SAHI CHAL RAHA HA. I THINK REMOVED THIS PROVISION.

  18. govind prasad garg says:

    Proposed amendment in Section 234 F is very much hardship to assessee as well as Tax Practitioner. As per law due date of getting of TDS Forms is 15 th June. July is rainy season. In many parts of India Floods remains. TDS return filing and VAT return filing dates shall conflict. How Govt. expect to file All return within one months. This provision should not be applicable to Ind. and HUF because this is not having qualified accounting persons. All tax advocate after 31 July shall be idle and it would be difficult to meet out office expenditure in small towns.

  19. govind prasad garg says:

    Section 234 F must be deleted.It shall create hardship to assessee as well as to Tax Practitioner.

  20. Dwarkadas Bhutada says:

    Credit of TDS made by Tax deductors in Fome 26AS may be one of the reason for delay in return. One has to claim the credit of TDS made in the return of income. If the claim is not made then the credit for the TDS will not be given. hence the new provisions should be removed are modified accordingly.

  21. govind prasad garg says:

    Proposed levy of fees U/S 234 E must be delayed. How govt. expect that all returned must be filed upto 31 st July.TDS certificate shall be obtained on or after 15 th June as per law.There mansoon season in whole of Country. Date of VAT and TDS Return conflicts. More over after All practitioner shll be Idle after 31 st July. How office expenditure shall be meet out. There must be strong protest of this Section This would badly affect assessee as well as practitioner. There is already penal provision U/S 234 A.At least individual and HUF must be excluded.

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