Page 9 - DTPA Journal Aug 18

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

imposed, the Assessing Officer was required to give the The provision is such that it does not dwell into the
assessee an opportunity to being heard. reasons for delay but also deducts the fee automatically
before affording any opportunity in any manner to the
6. PENALTY UNDER SEC. 271F NOT IMPOSABLE IF
ASSESSEE PROVES THAT THERE WAS assessee to furnish his explanation.Hence, Section
234F entails a clear violation of the principles of natural
REASONABLE CAUSE FOR THE SAID FAILURE justice.
:
Section 273B. provides that notwithstanding anything 10. SECTION 234F IS ATTRACTED EVEN IF TAX
contained in the different provisions for imposing LIABILITIES ARE FULLY DISCHARGED BY WAY OF
penalty inclusinfg section, no penalty shall be ADVANCE TAX, TDS OR SELF ASSESSMENT TAX :
imposable on the person or the assessee, as the case It is pertinent to note that Section 234F of the Income
may be, for any failure referred to in the said provisions Tax Act, 1961 is attracted even if the taxpayer has
if he proves that there was reasonable cause for the discharged his entire tax liability to the Government by
said failure.Section 271F was deleted after Section
234F came into forcew.e.f. asst. year 2018-19. Section way of Advance Tax, TDS, Self Assessment etc.
234F, in turn, has now been challenged as harsh, Therefore, an assessee is punished by virtue of Section
oppressive, unreasonable and arbitrary and on the 234F even if he has fulfilled his tax responsibilities. In
view of the same, Section 234F is illogical, unjustified
various other grounds, discussed hereinafter.
and harsh.
7. Reasons due to which one may not be able to 11 . N O I N T E L L I G E N T O R R AT I O N A L
furnish the return in time :It may be mentioned that an CLASSIFICATION OF TAXPAYERS UNDER
assessee may not be able to furnish the return within SECTION 234F
stipulated date due to many reasons like Illness,
accident, Survey, Search & Seizure, Marriage in family, Section 234F only makes a single differentiation when it
foreign travel, demise of a family member, Absence of comes to determining the amount of late fee to be paid
accountant, Inconvenience to auditor or Advocate, i.e. those earning less than Rs. 5 lakh and those whose
Flood, Fire or any other natural calamity and so income exceeds Rs 5 lakh. Such classification violates
on. the right to equality under Article 14 of the Constitution
thus, aperson earning Rs.5.01 lakhs is treated on the
8. PENALTY DISGUISED AS “FEE” UNDER SEC. same pedestal with a person earning in several Crores.
234F
While that being so, the provisions of section 234F
It may be noticed that Section 234F uses the word “Fee” infringes the corner-stone of equality enshrined under
in prescribing what is effectively a penalty. Whereas article 14 of the Indian Constitution which postulates not
“Fees” connote that there is an element of quid pro quo, only that equals should be treated equally.
with a person paying for the provision of a service,
Section 234F does not entail the provision of any such 12. NO EXEMPTION FOR SENIOR CITIZENS OR
reciprocal arrangement. Levy of Late Fee under D I F F E R E N T LY A B L E D P E R S O N S E T C .
sectionsection 234F is a fee sans any service rendered, The provision of levy of Late Fee under section 234F is
clearly unmindful of the difficulties faced by senior
it is illogical, irrational and liable to be held citizens and the differently-abled persons. Further, it
unconstitutional.In the absence of any work or service does not provide any leeway for the delay in filing IT
given by the Department to the taxpayer, No fees ought
to be collected from the taxpayer. Returns due to genuinely acceptable reasons such as
sickness, chronic ailments, maternity, wedding,
9. VIOLATION OF PRINCIPLES OF NATURAL accident, examination, foreign travel, death in the family
JUSTICE etc.

The imposition of the penalty in the guise of Late Fee via 13. DIFFICLTY IN CASE OF E-FILING OF
Section 234F is being carried out without giving the RETURNS
income tax assessee an opportunity of being heard,
thereby violating the principle of audialterampartem. The taxpayer is likely to be inconvenienced due to the
fact that most of the IT Returns can only be e-filed. In
There is an imposition of penalty for the failure to furnish this context, Section 234F has not provided for any
tax returns within prescribed due date without even exceptions like on what has to be done in case of
giving an opportunity to the defaulting assessee to technical delays in transactions are attributed to the
explain his case and therefore levy of such Late Fee is Government due to non-functioning of Income Tax
irrational on the fact of it and palpably arbitrary and in Return filing Website and the delay cannot be
flagrant violation of principles of natural justice. attributable to the assessee. It has been seen in
practical life that there is an inordinate delay in
Adding to the problem, the late fee is deducted downloading and filing the ITRs in the e-portal of the
automatically from taxes paid while filing the Return.

www.dtpa.org Direct Taxes Professionals' Association - Journal | 06