Thank you for your reply to my query under subject "ITR not filed for 2007-08", which I had posted on October 28.
I will appreciate it if you could give your opinion on this case: the employee received a letter from the IT dept a couple of months back saying she had spent over 4 lakhs on her credit card and that she should furnish proof of submission of ITR.
The employee, a UK national with a PIO status, had not filed returns as she was not aware that ITR is mandatory even after TDS has been deducted by the employer.
When another letter from the dept arrived, she contacted a person doing a CA course for help in filing returns for 2007-08, 2008-09 and 2009-10.
The employee gave the CA “power of attorney” to facilitate the process.
The CA got back saying ITR for 2008-09 and 2009-10 had been filed but the IT dept had sent a notice under Sec 148 for 2007-08. The penalty, he said, would be over Rs. 4 lakhs (Rs 2 lakhs as the tax liability for that yr after TDS was deducted by the company + Rs. 2 lakhs as penalty + interest for the subsequent months till Oct this year).
Here’s the reason why the employee did not file ITR for 2007-08 and 2008-09 -
1) The employee, a UK national with a PIO status, was not aware that filing of IT returns is mandatory in India even after TDS has been deducted by the employer.
2) The employee had worked for 7 months in 2007-08 before quitting her job to return home (London) after the birth of her son. Also, she would not have been able to pursue IT issues as she was staying alone in India at that time. Her income for the 7 months was around Rs. 8 lakhs and TDS around Rs. 66,000.
She has been told by the CA that the IT dept officer dealing with her account is ready to close the case for a huge sum (bribe).
Kindly advice as to what should be done and whether the reasons mentioned above (1 & 2) can be used to get the Sec 148 NOTICE recalled.
If the Notice cannot be revoked/changed, does the IT dept allow paying of the penalty amount in installments?
30 October 2010
If the relation is like employer and employee , no matter a person is working under a contract term , the amount will be taxable under the head of salary.
Just file the late return, Since TDS was alraedy deducted . Donnot pay any interest initially.
Querist :
Anonymous
Querist :
Anonymous
(Querist)
08 November 2010
Dear Mr Bhagat,
Thank you for your reply to my query under subject "ITR not filed for 2007-08", which I had posted on October 28.
I will appreciate it if you could give your opinion on this case: the employee received a letter from the IT dept a couple of months back saying she had spent over 4 lakhs on her credit card and that she should furnish proof of submission of ITR.
The employee, a UK national with a PIO status, had not filed returns as she was not aware that ITR is mandatory even after TDS has been deducted by the employer.
When another letter from the dept arrived, she contacted a person doing a CA course for help in filing returns for 2007-08, 2008-09 and 2009-10.
The employee gave the CA “power of attorney” to facilitate the process.
The CA got back saying ITR for 2008-09 and 2009-10 had been filed but the IT dept had sent a notice under Sec 148 for 2007-08. The penalty, he said, would be over Rs 4 lakhs (Rs 2 lakhs as the tax liability for that yr after TDS was deducted by the company + Rs 2 lakhs as penalty + interest for the subsequent months till Oct this year).
Here’s the reason why the employee did not file ITR for 2007-08 and 2008-09 -
1) The employee, a UK national with a PIO status, was not aware that filing of IT returns is mandatory in India even after TDS has been deducted by the employer.
2) The employee had worked for 7 months in 2007-08 before quitting her job to return home (London) after the birth of her son. Also, she would not have been able to pursue IT issues as she was staying alone in India at that time. Her income for the 7 months was around Rs 8 lakhs and TDS around Rs 66,000.
She has been told by the CA that the IT dept officer dealing with her account is ready to close the case for a huge sum (bribe).
Kindly advice as to what should be done and whether the reasons mentioned above (1 & 2) can be used to get the Sec 148 NOTICE recalled.
If the Notice cannot be revoked/changed, does the IT dept allow paying of the penalty amount in installments?
CAclubindia
