Prosecution to follow fines, warns I-T dept

HYDERABAD: Working overtime to widen its tax base and increase recoveries, the Income Tax department is all set to tighten its noose around those who do not file I-T returns. And this time, apart from imposition of fines, the I-T officials are seeking prosecution under section 276 CC of the IT Act, which may even lead to arrest.
Officials told TOI that there is provision in the law for both fines and rigorous imprisonment up to seven years."It is compulsory for every company to furnish I-T returns. Similarly every person, whose total income exceeds the maximum amount which is not taxable in any previous year ending on March 31, is liable to file the I-T returns. Crossing of exemption limits and non-filing of returns despite the lapse of the statutory last date for the assessment year (usually July 31 or September 30) is construed as deliberate tax evasion," an official said.
However, officials added that they exercise restrain on case to case basis and usually do not threaten prosecution at the drop of a hat. "Under such circumstances, the penalty imposed is to the tune of 1 per cent per month on the amount of tax for total assessed income or it can be a penalty of Rs.5,000 under section 271 F and depends on the discretion of the assessing officer," said a senior I-T official. He added that even though the due date for filing the returns is in July, prosecution will not be launched if the returns are filed before March 31 the next year.
If an assessee wilfully refrains from providing the returns of more than Rs.25,000, it can attract both imprisonment as well as fine. "For negating wilful or deliberate evasion, the assessee has to furnish substantive evidence," said the official. However, prosecution is not launched if the tax payable after the advance tax and tax deduction at source is not more than Rs.3,000.