As we all are aware that the Finance Act, 2017 has come up with the new Section 234F. As per that section 234F, if a person who is required to furnish a return of his income u/s 139, fails to furnish such return before the end of the relevant assessment year, the assessing officer may levy a penalty as follows:
|Date of Filing||Penalty|
|If the return is furnished after the due date of filing but on or before the 31st day of December||Rs. 5,000|
|In any other case i.e if file after 31st December||Rs. 10,000|
|Note: If the total income of the person does not exceed Rs. 5,00,000/-, the penalty payable under this section shall not exceed Rs. 1,000/-.|
Before introduction of this Section, provisions provide for penalty of Rs.5,000 under section 271F in case where return is furnished after end of relevant assessment year provided there is no reasonable cause for such delay.
Though this new section was introduced 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.
Since Section 234F i.e. Fee for delayed filing of return is providing undue hardship for the genuine assessees, therefore it is suggested that proposed fees under section 234F for delayed filing of return may be withdrawn or necessary amendments need to be made in section 234F.
(Republished with Amendments)