CA. Rachna Parashar (partner) (196 Points)
24 January 2012The is an assessee who has not filled his return from financial year 2009-10 and certain amount of tax has also not been paid so what are penalties and interest which will be imposed in this case. The assessee is liable to file half yearly return.
Plz reply soon its urgent !
Deepak Gupta
(CA Student)
(15922 Points)
Replied 24 January 2012
| Originally posted by : Rachna Parashar | ||
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The is an assessee who has not filled his return from financial year 2009-10 and certain amount of tax has also not been paid so what are penalties and interest which will be imposed in this case. The assessee is liable to file half yearly return. Plz reply soon its urgent ! |
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Similar case also happened with one of the clients in our office and we considered the below mentioned legal position.
Interest on delayed tax payment @ 13% p.a. (No. of days of delay)
Late Fee = Rs. 2,000 in case of each return
Service tax late fee has been increased with effect from 08.04.2011 from the maximum amount of Rs. 2000/- to Rs. 20000/-. In this connection the abovesaid provision for increase in late fee for delay in filing of service tax return came into force from 08.04.2011 therefore only in those cases where the default occurred subsequent to the above date, would invite penalty at the increased rate and not in such cases where default has been made by the assessee prior to the said date. The above legal position has been upheld in catena of cases, decided by different courts including Hon’ble Apex Court and some of them are as follows:
1. CIT VS S. Samratatanghak (1988) 173 ITR 425 (ORR)
2. Brij Mohan VS CIT (1979) 120 ITR (SC)
3. Khubchand Kundanmal VS Union Bank of India (1991) 187 ITR 334 (Cal)
4. CIT VS Kantilal B. Shah (1988) 156 ITR 33 (Bom)
5. CIT VS Sheiku Munir (1988) 70 ITR 421 (M.P)
6. Sreepadam (HUF) VS CIT (1988) 172 ITR 371 (Ker)
7. CIT VS M. George & Bros (1983) 140 ITR 847 (Ker)
8. CIT VS Jyoti Swarup Agarwal (1978) 113 ITR 330 (All)
9. CIT VS Poplar Medical Hall (1998) 229 ITR 43 (Pat)
In the above cases the Hon’ble courts has laid down the principle in respect of applicability of rate of penalty. Rate of penalty has to be applied as it stands at the date when the default, which attract penalty is committed.
Attention is also drawn to the decision rendered by the Hon’ble Apex Court in the case of CIT VS Vegetable Products Ltd. (1973) 88 ITR 192, 198 (SC) and C.A. Abraham VS ITO 1961 (041) ITR 0425 SC 1961 (048) AIR 0609 SC, which held as under.
“Penalty provision should be intercepted as it stand and in case of doubt, in a manner favourable to the tax payer. If the court finds that the language of a taxing provision in ambiguous or capable of more meaning than one, then the courts has to adopt the interpretation which favour the assessee, more particularly so where the provision related to the imposition of penalty.
Dipjyoti Majumdar
(CA in service & CS. dipmaj@ rediffmail.com )
(3468 Points)
Replied 25 January 2012
Thanks Deepak for such a useful information. Keep it up.
CA SANJEEV KUMAR MAHAJAN
(MANAGER FINANCE TAXATION & ACCOUNTING)
(69 Points)
Replied 25 January 2012
Dear Rachna,
Ur query have nowhere stated whether ur organization/client has get itself registered as per section 69 Finance Act 1994 r.w.r. 4 (1)/(2)( Sub rule (1) for existing business and (2) for new business, as the case may be) of Service Tax Rule 1994. If not then penalty for non-registration shall be levied as per section 77 of the Act upto Rs. 10000/-(Rs. 5000 for the period prior to 08-4-2011) or Rs 200/- per day of continous default, starting with the 1st day after the *due date till the date of actual compliance, whichever is higher.
Due date here mean: when in case of provider of a taxable service whose aggregate value of taxable service in a FY > 9Lakh. then within time limit of 30 days of exceeding the agg value of taxable service or time limit of 30 days as per Rule 4(1)/(2).
Rest is same as of Deepak
CA SANJEEV KUMAR MAHAJAN
(MANAGER FINANCE TAXATION & ACCOUNTING)
(69 Points)
Replied 25 January 2012
Dear Rachna,
Ur query have nowhere stated whether ur organization/client has get itself registered as per section 69 Finance Act 1994 r.w.r. 4 (1)/(2)( Sub rule (1) for existing business and (2) for new business, as the case may be) of Service Tax Rule 1994. If not then penalty for non-registration shall be levied as per section 77 of the Act upto 10000/-(Rs. 5000 for the period prior to 08-4-2011) or200/- per day of continous default, starting with the 1st day after the *due date till the date of actual compliance, whichever is higher.
Due date here mean: when in case of provider of a taxable service whose aggregate value of taxable service in a FY > 9Lakh. then within time limit of 30 days of exceeding the agg value of taxable service or time limit of 30 days as per Rule 4(1)/(2).
Rest is same as of Deepak
sunil
(ACCOUNTANT)
(21 Points)
Replied 14 February 2012
sir i have done mba finance i am doing work in service industry i want to know that co. have taken service tax no. in the name of old firm now co. change from firm to pvt ltd but old service tax are being used in new pvt co. liability less tah 10 lac we havnt paid service tax so far can i change service tax no . either we should use old service tax no.and how to pay tax
CAclubindia
