Penalty of Rs. 5,000 for Non-filing of Income Tax Returns: Finance Bill, 2022 empowers CBDT to provide relaxation to Persons facing genuine Hardships [Read Finance Bill]

The Finance Bill, 2022 introduced to the Parliament by the Union Finance Minister Nirmala Sitharaman proposed to empower the Central Board of Direct taxes (CBDT) to provide relaxations to the specified persons facing genuine hardships in filing income tax returns within the prescribed time.

Section 234F of the Act which falls under Chapter XVII-F provides that in case a person fails to furnish return of income under section 139 within the prescribed time, he shall be liable to pay a fee of five thousand rupees. Currently this section is not expressly mentioned in clause (a) of sub-section (2) of section 119 of the Act.

Section 119 of the Act empowers the Board to issue orders, instructions and directions to other income-tax authorities for proper administration of the Act. Clause (a) of sub-section (2) of the said section gives powers to the Board to provide relaxation of provisions of certain sections of the Act such as 115P, 115S, 115WD, , 139, 1211, 234A, 234B, 234C, 234E, etc.by way of general or special orders, in respect of any class of incomes or class of cases, for the purpose of proper administration of the work of assessment or collection of revenue or initiation of proceedings for the imposition of penalties and such other issues, in public interest.

While this section acts as a deterrent against those who do not comply with obligations imposed under the Act, it also leads to an unintended consequence of levying fee on persons who face genuine difficulties in filing return of income within the specified time, like members of the armed forces stationed in remote regions with no access to the requisite infrastructure.

Therefore, considering the genuine hardships faced by certain classes of persons in filing return of income and not to impose a fee for a default which is beyond their control, it is proposed to insert section 234F and include it in the list of sections mentioned in clause (a) of sub-section (2) of section 119 of the Act, so as to enable the Board to issue such orders or instructions, as deemed fit. The new provision will be applicable from April 2022.

To Read the full text of the Finance Bill 2022 CLICK HERE

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