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It is suggested that proposed fees under section 234F for delayed filing of return may be withdrawn and necessary amendments be made in section 271F.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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29 responses to “Section 234F Fee for delayed filing of return to cause undue hardship”

  1. RAJ KUMAR JAIN says:

    The no of Income Tax return filing will be doubled as most of the salaried class was not filing the return . Last year all got 12 months time and now it is one month as the form was released in June. As almost all the Income returns are filed by Chartered Accountants or Tax practitioners who cannot increase the resources temporary for one month keeping the quality of work. The assessees have to pay penalty for this. So practically 234F should be levied only after September.

  2. K. ISAAC JESUDHAS says:

    FOR THE LAST 58 YEARS, THE TIME LIMIT IS 2 YEARS AND NOW IT IS 2 MONTHS BECAUSE THE FORM ITSELF IS INTRODUCED IN JUNE. THE BUDGET 2017 WAS ANNOUNCED IN FEB 2017 AND WHY THE DELAY OF GIVING THE FORM SO LATE. THEN THE DEPARTMENT SHOULD BE CHARGED LATE FEE FOR INTRODUCING THE FORM LATE.

  3. B. K. Verma says:

    The new penalty clause is very harsh. The govt. should know that the time gap of receiving form 16 and 16 A and submission of return by C/A is inadequate. Further intt. is also charged for late filing of returns. However if govt. wants to impose penalty it should be after 30th September

  4. VIJAY MUNGALE says:

    WHY NOT SOME ADVOCATE HELP & FILE A PIL AGAINST THIS DRACONIAN SECTION 234F AND WHY NOT WE ALL TOGETHER FIGHT HARD AGAINST THE IMPLEMENTATION OF THIS SECTION.THE TIME HAS COME NOW TO GET THE HIT OF THIS PENAL PROVISION.

  5. shailendra jain says:

    my question is an assessee whose taxable income for the Assessment Year 2017-18, is Rs6,00,000/= and he files his I.T. return of 5th August 2017, will he be liable to pay late fee Rs.5,000/=

    • Dinesh Kumar says:

      U/S 234F is not attracted for A.Y.2017-18.U/S 234F will be applicable from 1st april 2018 for A.Y. 2018-19.If Assessee Taxable is less than Rs 5 lacs then penalty Rs 1000 for Individual /HUF.
      Thanks
      Dinesh kumar
      CA-Student

  6. sumit sharma says:

    if my GTI is 290000
    and if file ITR on 1 dec ie after due date 31st july
    wheathe sec 234E would be attractcted or not

    • Dinesh Kumar says:

      U/S 234E of Income Tax Act 1961 has applicable for TDS/TCS return late filing of return .But your based question If assessee taxable income income is less than Rs 5 lacs then late filing of fees 1000 for A.Y.2018-19 is aplliable from 1St April 2018.
      Thanks
      Dinesh kumar
      CA-students

  7. NARENDRA KUMAR says:

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

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