time barred return

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Querist : Anonymous

Querist : Anonymous (Querist)

06 October 2010 can a time barred nil return be filled ? if yes what the procedure ? is there any penalty for filling nil return after the time barred period?

Ajay Mishra

Ajay Mishra (Expert)
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06 October 2010 Dear Friend

An individual not having taxable income need not file a voluntary return, though his total income falls below the limit only after availing deductions for approved investments under Sec. 80C or deductions for health insurance premia under Sec. 80D or disability under Sec. 80DD or medical treatment for specified ailments under Sec. 80DDB or interest on loan for higher education under Sec. 80E or deduction for donations under Sec. 80G.
Voluntary returns are required to be filed by every firm or company irrespective of the fact that they may not have taxable income. As for others, voluntary return has to be filed by persons including individuals who have no taxable income only because of incentives available to them as for new industrial undertakings etc. under Sections 80IA, 80IAB, 80IB, 80IC, 80ID and 80IE as listed under Sec. 80AC. If they do not file the returns in time, they will lose the deductions and become liable to tax, notwithstanding their eligibility for any such deduction, because of their failure to file return in time.
A person with a loss from business has to file the return in time, if he wants the loss to be determined and carried forward and adjusted against future income.
The due date for filing voluntary return under Sec. 139(1) is July 31 for the preceding financial year. It is extended up to September 30 for a company, others who are liable for tax audit or any other statutory audit and working partners of firms, which are liable for such audit.
Firms and companies which are obliged to file returns even without taxable incomes are liable for penalty of a sum of Rs. 5,000 under Sec. 271F but such penalty can be spared, if such return is filed belatedly, but within the same assessment year or has a reasonable cause for non-filing within the time as provided under Sec. 273B.
There are various consequences for non-filers with taxable income. (1) A notice may be issued under Sec. 142(1) or under Sec. 148 calling for return. (2) Non-filing of return may render a person in business liable for survey. If the conditions for search are satisfied, there could possibly be a search as well, because non-filing of return in time may well be a tilting factor combined with other reasons for authorisation of search. (3) Where a return is not filed in time, such non-filers would be courting a best judgment assessment on estimate basis after a show cause notice under Sec. 144. Such assessments may result in a larger liability than otherwise warranted. (4) A delayed return provides for automatic levy of interest on tax payable for the period of delay under Sec. 234A. If there is also short payment of advance tax, there would be interest under Sec. 234B as well. Both interests will run concurrently.
With delay of every month, both such interests get jacked up. (5) Explanation 3 to Sec. 271(1)( c ) has a deeming provision by which the entire income of a non-filer will be treated as income concealed by him so as to attract penalty equal to tax payable by him as tax on concealed income.
This penalty may be avoided, if return is filed later, but a return filed after the receipt of notice under Sec. 142(1) or 148 will not save such penalty. (6) There is scope for prosecution for those who fail to furnish a return without reasonable cause, either voluntarily or when required on notice. Such failure may result in imprisonment for periods between three months to three years with fine, if the tax relating to such omission is less than Rs. 1 lakh and six months to seven years with fine, if more than Rs. 1 lakh.

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