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Penalty under sec 271F

Balu (Accounts Officer) (50 Points)

26 June 2012

My friends started a business as a partnership firm(Registered) during 2010-11. During the F.Y 2010-11 it was operated for 3 months only and earned a net profit (before tax) of Rs 10000. for the assessment year 2011-12 they did not pay any tax and not filed the return. Now they realised and want to file the return (i.e by the end of june'12). what are the interests they have to pay. and also explain the applicability of sec 271F (penalty). Pls suggest me in this regard.

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Siddarth R Sunder Ram (Finance Professional) (230 Points)
Replied 26 June 2012

The normal time limit under Sec 139 (1) for filing returns would have been Sep 30, 2011. For fliling a belated return, time limit is 1 year from the end of the assessment year or before completion of assessment, whichever is earlier. Assuming that the assessment has not been completed, the time limit for filing belated return is Mar 31, 2013. Interest would be payable @ 1% per month or part of the month for the period of delay (i.e from Oct 1, 2011 to June 30, 2012) under Sec 234A.

As far as penalty under Sec 271F is concerned, penalty of Rs. 5000 is payable if return is not filed before the end of assessment year. In this case, since return has not been filed before Mar 31, 2012, penalty of Rs. 5,000 is payable.