Live Course on Drafting of Appeal and Reply of Penalty Notice by CA Sachin Sinha. Register Now!!

Regarding non filing of i.t. return of pvt. ltd. company

Baldev Sharma (Service) (42 Points)

15 December 2015

A private limited company incorporated on 25th Feb 2014 and Close its First Books of Accounts on 31st march 2015 (First Financial Year from Feb - 2014 to March 2015) Now Management have received a Letter from I.T. Department for Non Filling of Income Tax Return for A. Y. 2014-15 (There is no any Transaction during the period)(25th Feb 2014 to March 2014) only Pan Application Process and Service Tax No. Application is done and business start from April - 2014

Is Compulsory to File Return and if yes then withou books of account close

Please advise me

Reply
Follow
Share

8 Replies

jaya krishna (Chartered Accountant) (262 Points)
Replied 15 December 2015

yes you can file nil return. if preliminary expenses incureed u can show that expenses.

Ankit Taprania (CA FINAL ) (542 Points)
Replied 15 December 2015

your is a case of company and a company is mandatorly required to file return after its incorporation even if no bussiness is done in whole year. So file NIL return in response to notice . And yes you can show preliminary expenses if incurred.

CA Rizwan Saifi (Founder @ CharteredHelp) (117 Points)
Replied 15 December 2015

It is mandatory to file Income tax return of each financial year in case of company irrespective of the starting date of company in a particular financial year...

CA Reshma K N (CHARTERED ACCOUNTANT) (96 Points)
Replied 15 December 2015

HI Mr. Baldev,

Please note that the definition of the term 'financial year' in the Company law and Income Tax law is altogether different.

Provisions of the Companies Act allows you to close books for the first time on 31st March, 2015 whereas provisions of Section 2(34) read with Section 3 and Section 2(9) of the Income Tax Act, 1961 states that the financial year or the previous year shall be a period upto 12 months ending on 31st March.

Hence irrespective of whether you actually close the books of accounts or not, for the purpose of income tax, u need to perpare the financials and atleast upload a Nil return.

Ketan Kapoor (Audit) (124 Points)
Replied 16 December 2015

Once a company has been incorporated, filing of return of income becomes mandatory. Definition of financial year/assessment year in companies act and the income tax act are entirely different. There is no corelation in both of them, since they have been mentioned in separate acts.

You still have time. File nil return for the first year if you have no transaction in the first year. If you have received a notice from the Income Tax Deptt., then file your return in response to that notice. You can claim some expenses, like prelim expenses, etc. if you have them in your balance sheet for the relevant previous year. It does not matter if you have not closed your books for that period. Prepare a fair computation, and file a return. That would be the best way forward. Don't be worried, you may receive a scrutiny notice after that as well, but that is normal. If you file a true and fair return, you would have no trouble in future.

Baldev Sharma (Service) (42 Points)
Replied 17 December 2015

Thanks a lot to all

Baldev Sharma (Service) (42 Points)
Replied 17 December 2015

Thanks a lot to all

karthy (manager) (23 Points)
Replied 09 June 2018

I have started pvt ltd company on 2012. through pvt ltd company bank account i have received 2 transactions (last on 2014) only. I didn't file I.T. Now companies act sent me a notification mail for inactive status. What can i do now? my auditor told just leave it. they will close the pvt ltd company name. But my question is, Is there any penalty in future for that 2 transactions?