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August 28, 2014

Consequences for non filing of Return/ Notice for non-filing of retrurn



Notice for Non Filing of Return
If you have missed filing IT returns on time, you can file it within 1 year from the end of relevant assessment year u/s 139(4). If you are standing in a period 1 year after assessment year then you can’t file return even u/s 139(4) online or manual. Even if manual return is deposited and accepted by Income tax Department by oversight such return won’t have any santity/standing. 

Now for that assessment year return can only be filed in response to notice received from Income Tax Department. However if there is any tax due as per your calculation, it is better to pay it immediately. Even if you cannot file return after it is time barred, you can still pay taxes for that assessment year. Remember under Section 148 assessing officer can reopen a case up to six years from the end of the relevant assessment year if he has reasons to suspect income evasion. If the amount in question is less than `1 lakh, only returns that are up to four years old can be reopened.

A notice under Section 142(1)(i) (issued in case of non filing of return) requiring to file a return can be issued anytime. Please note that notice under Section 142(1)(ii) is a completely different section for producing the account/documents can be issued even to the person who has filed the return.

Let’s focus on notice under Section 142(1)(i) (issued in case of non filing of return)  the main objective of this notice is to
a) Require the assesse to furnish the return of his income.
b) Reason for non-filing of return

This notice can be issued for the purpose of assessment and can be issued anytime without any time limit. If the notice under section 142 (1)(i) has been issued and the assessment proceedings have started ; the Assessing Officer has  to complete the assessments under  after issuing notice section 143/144:- 

1) If you do not file the return even in response to notice u/s 142(1)(i) then AO is well authorised to take your case u/s 144 in which he can make the assessment to the best of his knowledge.
But as a CA I would always advise to file a return in response to notice u/s 142(1)(i) which can be seen in the following point.

2) Now let us examine that what AO is supposed to do once you have filed the return in response to notice u/s 142(1)(i)

I-T Section
Time frame for issue of notice by AO
Analysis
143 (1)
Up to 1 year after completion of relevant assessment year
These time frame have already expired since you are standing in period 1 year after assessment year
143 (2)
Up to 6 months after completion of relevant assessment year

Further as per Sec 153(1) specifying time frame for completion of assessment

153. [(1) No order of assessment shall be made under section 143 or section 144 at any time after the expiry of—
(a) two years from the end of the assessment year in which the income was first assessable; or
(b) one year from the end of the financial year in which a return or a revised return relating to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, is filed under sub-section (4) or sub-section (5) of section 139,
whichever is later :]

All the aforesaid information is based on my personal observation; you are advised to obtain second opinion of your CA on the matter. 

You can read further articles here on my blog



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