Page 8 - DTPA Journal Aug 18

DTPA - J | 2017-18 | Volume 3 | August 2018

Section 234F needs urgent

review and withdrawal

Narayan Jain, LL.M., Advocate

th
1. INTRODUCTION : context it may be relevant to refer to the 6 proviso to
section 139(1) which provides as under :
Section 234F, inserted through the Finance Act, 2017
with effect from assessment year 2018-19 is being “Provided also that every person, being an individual or
highly debated. Itsconstitutionalityhas been recently a Hindu undivided family or an association of persons or
challenged in Madras High Court. Section 234F a body of individuals, whether incorporated or not, or an
prescribes a fee for delay in filing IT Returns. Let us artificial juridical person, if his total income or the total
analysevarious dimensions and see whether imposition income of any other person in respect of which he is
of Late Fee under section 234F is justified or not. assessable under this Act during the previous year,
without giving effect to the provisions of section
2. SECTION 234F :
10A or section 10B or section 10BA or Chapter VI-A
The text is reproduced hereunder : exceeded the maximum amount which is not
chargeable to income-tax, shall, on or before the
"234F. Fees for default in furnishing return of due date, furnish a return of his income or the
income.—(1) Without prejudice to the provisions of this income of such other person during the previous year, in
Act, where a person required to furnish a return of the prescribed form and verified in the prescribed
income under section 139, fails to do so within the time manner and setting forth such other particulars as may
prescribed in sub-section (1) of said section, he shall be prescribed.”
pay, by way of fee, a sum of,—
That means the above proviso requires persons to
(a) Rs.5,000, if the return is furnished on or before the furnish the Return of Income if Gross Total Income
31st day of December of the assessment year; (without giving effect to the provisions of section
10A or section 10B or section 10BA or Chapter VI-
(b) Rs.10,000 in any other case
A)of an Individual exceeds Exemption Limit. If the
Provided that if the total income of the person does not Gross Total Income as aforesaid,is below exemption
exceed Rs.5 lakh, the fee payable under this section limit, one is not required to furnish the Income Tax
shall not exceed Rs.1,000. Return in case of Individuals and Hindu Undivided
Family. The general impression that one is required to
(2) The provisions of this section shall apply in respect file his Income Tax Return if the income is taxable, is a
of return of income required to be furnished for the misnomer.
assessment year commencing on or after the 1st day of
April, 2018.". 5. PENALTY UNDER SEC. 271F FOR LATE FILING
OF RETURN PRIOR TO INSERTION OF SECTION
3. LATE FEE IMPOSABLE UNDER SECTION234F AT 234F :
A GLANCE
Prior to the insertion of Section 234F, the erstwhile
As per this provision, Income tax assessees failing to Section 271F came into play on default in filing of IT
file their Income Tax Returns within the prescribed time Returns in certain cases. Section 271F (effect from the
would have to pay a fee for default. The amount of the 1st day of June, 2002), reads as under :
late fee to be paid is as follows,
"271F. Penalty for failure to furnish return of
1. UptoRs 1,000 for a person whose total income income.— If a person who is required to furnish a return
does not exceed between Rs 5 lakh of his income, as required under sub-section (1) of
2. Rs 5,000 for persons with an annual income higher section 139 or by the provisos to that sub-section, fails
than Rs 5 lakh if the ITR is filed before December 31 of to furnish such return before the end of the relevant
the assessment year assessment year, the Assessing Officer may direct
that such person shall pay, by way of penalty, a sum of
3. Rs. 10, 000 in any other case
Rs.5,000.”
However where a person is not required to furnish a As per Section 271F, if there is a default in filing IT
return of income under section 139, Late Fee shall Returns, the Assessing Officer was conferred the
not be chargeable. discretion to impose a penalty of Rs.5,000 on the
4. SIXTH PROVISO TO SECTION 139(1) :In this assessee. Importantly, before such a penalty is

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