Madras High Court upheld the Constitutional Validity of Sec 234(F)

Case covered:

K.Nirai Mathi Azhagan

Versus

Union of India 

Facts of the case:

The petition filed under Article 226 of the Constitution of India praying for the issuance of a writ of declaration, to declare Section 234(F) of the Income Tax Act, 1961 inserted by the Finance Act, 2017 is in violation of Article 14 of the Constitution of India.

Text of Section 234(F):

Section 234(F) of the Income Tax Act, 1961, reads as under:-

“Fees for default in furnishing return of income – (1) Without prejudice to the provisions of this Act, where a person required to furnish a return of income under Section 139, fails to do so within the time prescribed in sub-Section (1) of said Section, he shall pay, by way of fee, a sum of –

(a) five thousand rupees, if the return is furnished on or before the 31st day of December of the assessment year;

(b) ten thousand rupees in any other case. Provided that if the total income of the person does not exceed five lakh rupees, the fee payable under this Section shall not exceed one thousand rupees.

(2) The provisions of this section shall apply in respect of return of income required to be furnished for the assessment year commencing on or after the 1st day of April 2018.”

Observation of the court:

The revenue is justified in holding that the object of the provision is thus intended to ensure proper and timely filing of return. The gravamen of the offense is a failure to submit the return within a stipulated time. So far as these persons are concerned, they form a class by themselves. Whether a person is richer comparatively than the other has no relevance to this classification. Therefore, the classification of all such defaulters as one class is a reasonable classification and does not offend Article 14 of the Constitution of India.

In view of the above, the writ petition fails and accordingly, the same is dismissed. No costs. Consequently, the connected Miscellaneous Petition No.21628 of 2018 is closed.

The judgment of the court:

Section 234F (Levying of fee of INR 5,000/ or INR 10,000/ or INR 1,000/= for Late filing of Income Tax Return) does not Offend Article-14 of the Constitution of India. The Object of Sec.234F is to ensure proper & timely filing of return.

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