Section 234F – Fee for delayed filing of return – Removal of provision levying fees to prevent undue hardship for the genuine assessees
The Finance Act, 2017 vide section 234F levied 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 provided to restrict the fees to Rs.1,000, where the total income does not exceed five lakh rupees.
Erstwhile 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.
The provision is made with a view to ensure that returns are filed within the due dates specified in section 139(1).
However, fees levied 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 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.
It is suggested that fees levied under section 234F for delayed filing of return may be withdrawn and necessary amendments be made in section 271F.