The penalty provision for failure to file ITR within the time limit given in section 139(1) of Income Tax Act, 1961 is given in section 234F of the Act.
Section 234F read as follows :-
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.
Earlier this provision was governed by section 271F which read as follows :-
If a person who is required to furnish a return of his income, as required under sub-section (1) of section 139 or by the provisos to that sub-section, fails to furnish such return before the end of the relevant assessment year, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of five thousand rupees:
But the above provision stands abated by insertion of a proviso to the given section
“Provided that nothing contained in this section shall apply to and in relation to the return of income required to be furnished for any assessment year commencing on or after the 1st day of April, 2018.”
Thus now from the assessment year commencing from 1st day of April, 2018, section 234F is applicable for computing penalty for failure to file ITR.
This section is applicable on all categories of person like Individual, HUF, AOP, BOI, company, firm etc.
Late fees is made applicable as per 2 criteria
a) 5000/- if ITR filed on or before 31st day of December of the assessment year.
b) 10000 in any other case
Also maximum penalty for person whose income doesn’t exceed 5 Lakh rupees can be 1000/-.
Maximum penalty for any case is 10000/-
Section 234F doesn’t provide for the maximum filing time of return. This is provided by section 139(4) that deals with belated return.
As per section 139(4), Any person who has not furnished a return within the time allowed to him under sub-section (1), may furnish the return for any previous year at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.
Thus, return for any financial year needs to be filed within the above deadline. And if the return is filed after 31st December of the relevant assessment year, the penalty levied will be 10000/-.
