271F and filing income that does not exist

Hello,

Practically, there are many people who haven't filed any returns until now but want to take a housing loan. For that reason, generally(correct me if I'm wrong) any bank will require at least 3 years of Income Tax Return of that person. So for that it is a common practice to file 2 returns together and the 3rd return in the following april/may..Many of these people do not have income that matches even the basic exemption limit or sometimes even half of it.

I have the following queries in this regard:

Please consider a dummy example of a male individual named ABC. He wants to take a housing loan but hasn't filed his return yet and hence he files his returns for the financial years 9-10 and 10-11 i.e. Assessment Years 10-11 and 11-12 in March 2012. He then files his 3rd return for Assessment Year 12-13 in May 2012.

1) Can he be penalised u/s 271F for return for Assessment Year 10-11 even though he wasn't obligated to file a return u/s 139(1) since his GTI is less than Rs.150000?

2) Despite of him not having any major income, if he shows say Rs.145000 as Business Income(say labour charges) which is quite usual, what are the risks? What are the chances of his case coming in scrutiny? (hoping for a practical answer at CCI forum for this query)

As per section 271F

271F. 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.]

139. (1) Every person,-

(a) being a company or a firm; or

(b) being a person other than a company or a firm,

if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax,

shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed :

As per plain reading of the section Sec 271 F do not attract on returns income of which is below the maximum amount which is not chargeable to tax.

Do not have fear of scrutiny, such person surely not have indulge in any tax avoidance practices.