Union Budget 2018: Companies failing to file I-T returns to face prosecution
Arun Jaitley proposed in the Union Budget that a company shall be prosecuted for non-filing of return, irrespective of the fact that whether any tax is payable or not,india Updated: Feb 01, 2018 21:19 IST
Companies failing to file income tax returns will soon face prosecution, with the government making a proposal in this regard in the Union Budget.
The proposal comes at a time when the government has stepped up efforts to clamp down on shell companies and curb illicit fund flows.
“It is proposed to provide that prosecution shall lie against companies for non-filing of return irrespective of the fact that whether any tax is payable or not,” according to an annexure in the budget speech by Finance Minister Arun Jaitley.
As per the budget memorandum, Section 276CC of the Income Tax Act provides that if a person wilfully fails to furnish in due time the return of income which he is required to furnish, he shall be punishable with imprisonment for a term, as specified therein, with fine.
A sub-clause of the section says that a person shall not be proceeded against for failure to furnish return for any assessment year commencing on or after April 1, 1975, if the tax payable on the total income determined on regular assessment -- as reduced by the advance tax, if any, paid and any tax deducted at source -- does not exceed Rs 3,000.
“In order to prevent abuse of the said proviso by shell companies or by companies holding benami properties, it is proposed to amend the provisions of the said sub-clause so as to provide that the said sub-clause shall not apply in respect of a company.
“This amendment will take effect from April 1, 2018,” the memorandum said.
As part of efforts to curb illicit fund flows, the corporate affairs ministry has already started deregistering companies that have not been carrying out business activities for long.
Nearly 2.26 lakh companies have already been deregistered and around 3.09 lakh directors associated with these entities have been disqualified. Besides, the ministry has identified the names of 1.20 lakh more companies to be struck off from the official records for various non-compliances.
There are more than 12 lakh registered companies that are active.