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CMA Intermediate · Direct and Indirect Taxation · Filing of Return of Income

Mr Sandeep Joshi, a non-company assessee, did not file his return in due time. Total income on regular assessment gives tax of Rs 74,000. Advance tax and self-assessment tax paid before the period in section 263(4) expired total Rs 40,000, and TDS is Rs 25,000. No return was furnished under section 263(4) or 263(6). Is prosecution barred under section 479(2)(b)?

Yes, prosecution is barred. Tax payable of Rs 74,000 reduced by advance and self-assessment tax of Rs 40,000 and TDS of Rs 25,000 leaves Rs 9,000. Under section 479(2)(b), a non-company assessee is not proceeded against when this balance does not exceed Rs 10,000.

  1. AYes, because the net tax of Rs 9,000 does not exceed Rs 10,000Correct
  2. BNo, because the net tax of Rs 34,000 exceeds Rs 10,000
  3. CNo, because the net tax of Rs 74,000 exceeds Rs 10,000
  4. DYes, because TDS alone exceeds Rs 10,000

Explanation

Net tax = 74,000 - 40,000 - 25,000 = Rs 9,000. This does not exceed Rs 10,000, so section 479(2)(b) bars proceedings for a non-company assessee. Rs 34,000 wrongly ignores TDS, and Rs 74,000 ignores both prepaid taxes.

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