Need to reform ordinary rule of prosecution and return filing mechanism

Gopal Nathani – [2021] 132 taxmann.com 58 (Article)

In the case of Sasi Enterprises Vs. Assistant Commissioner of Income Tax (2014) 361 ITR 163 (SC) the income tax department made a best judgment assessment under Section 144 of the Act upon the partnership firm, of which Ms. J. Jayalalitha and Mrs. N. Sasikala were partners.

The department also initiated prosecution upon the firm and partners under section 276CC for failure to file return of the firm. Affirming the order of the Madras High Court the Supreme Court held that under section 139 of the Act, it is mandatory on the part of the assessee to file the return on or before the due date and that the Legislature under section 276CC of the Act provides for initiation of prosecution for the offence meaning non-furnishing of return of income.

Also in such a scenario the assessee cannot even get a let-off from penalty for non-filing of ITR by mere reference to delay on part of their erstwhile accountants vide Laxmi Vayaapar Pvt. Ltd. v. ITO [IT Appeal No. 2698 (Kol.) of 2013, dated 8-7-2016], ITAT Kolkata.
Hence this position is therefore not in dispute and the taxpayer should not carry any doubt in this regard and should file his return before the due date in any and every possible situation.

Click Here To Read The Full Article