Advocate Akhilesh Kumar Sah

Need to remove harsh/penal provisions in respect of Income Tax Returns due dates for which is July 31

Assessees as well as tax-practitioners are very much worried about the penal provisions in section 234F of the Income Tax Act, 1961 as well as harsh provisions in respect of newly introduced section 80AC of the Act where return of income is not furnished upto due date under section 139(1) of the Act. The provisions are creating anxiety amongst tax-payers and creating the need to Extend Income Tax Return due date & Relax application of Section 234F. Some of the provisions in respect of this are given as follows:

Subject to its Provisos and Explanations, section 139(1) of the Act incorporates that every person,—

(a)  being a company or a firm; or

(b)  being a person other than a company or a firm, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax,
shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed

Explanation 2 of section 139(1) explains that in this sub-section, “due date” means,—

(a)  where the assessee other than an assessee referred to in clause (aa) is—

(i)  a company ; or

(ii)  a person (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force; or

(iii) a working partner of a firm whose accounts are required to be audited under this Act or under any other law for the time being in force, the 30th day of September of the assessment year;

(aa)  in the case of an assessee who is required to furnish a report referred to in section 92E, the 30th day of November of the assessment year;

(b)  in the case of a person other than a company, referred to in the first proviso to this sub-section, the 31st day of October of the assessment year;

(c)  in the case of any other assessee, the 31st day of July of the assessment year.

Section 80AC of the Act incorporates that where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after—

(i)  the 1st day of April, 2006 but before the 1st day of April, 2018, any deduction is admissible under section 80-IA or section 80-IAB or section 80-IB or section 80-IC or section 80-ID or section 80-IE;

(ii)  the 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading “C.—Deductions in respect of certain incomes”,

no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139.

Section 234F of the Act mentions the fee for default in furnishing return of income. It incorporates as follows:

Section 234F (1) Without prejudice to the provisions of this Act, where a person required to furnish a return of income under section 139, fails to do so within the time prescribed in sub-section (1) of the said section, he shall pay, by way of fee, a sum of,—

 (a) five thousand rupees, if the return is furnished on or before the 31st day of December of the assessment year;

(b) ten thousand rupees in any other case:

Provided that if the total income of the person does not exceed five lakh rupees, the fee payable under this section shall not exceed one thousand rupees.

(2) The provisions of this section shall apply in respect of return of income required to be furnished for the assessment year commencing on or after the 1st day of April, 2018.

People of the country are facing different types of penalties in GST and some of the important due dates are in July, of GST. There are TDS problems as well as there are large number of tax-payers who file returns. The server problems are likely to come. Penal provisions should not make the taxing system unfriendly to tax-payers. Also, due dates should be increased/ made flexible looking to the infrastructural and natural problems in many parts of the country. Making compulsory Aadhaar in IT returns and thereafter many time enhancement of dates in respect of the same is an example to the problems related to compulsions in a developing country like India.

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  1. Ravinder says:

    You are right sir. Almost all the banks provide TDS certificates for last quarter only after 15th May. It is reflected in AS 26 only after that. The prescribed time is insufficient for compliance particularly, if one also has income from profession.

  2. VINAY SINHA says:

    Sir: jo log sweksha se Return file karte hai we log return file karna chhor denge 20 25 percent rsturn below taxable wale log file karte hai

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January 2021