Income tax query - 271f

A person having a small newspaper agency business has not filed IT Return for past 7 years. Now he wants loan from a Bank to buy a shop, and the Bank Manager has insisted to submit IT Returns for last 3 years i.e. AY 2010-11, 2011-12 & 2012-13 because neither his income was above the Tax Slab limit nor any Refund was to be claimed by him (no Tax was Deducted at source).

Can this be a valid ground for AO, for not imposing penalty of Rs. 5000/- u/s 271F for AY 2010-11 & 2011-12? Please mention if there is any decided case Law in this regard.

What if in the same case there was TDS and Refund to be claimed??

 

Thank you!!

Replies (1)

Hi Rakesh,

If income is below slab limit, then it is not mandatory on the part of the assessee to file return of income. Hence, no penalty shall be levied u/s 271F.

If Tax is deducted, then an assessee can only claim such deduction from the department by filing income tax return. Hence, in case of TDS, you have to pay the penalty.

Regards

Prateek

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