Option to voluntarily file ITR will be missed
In case if you miss the last date to file the belated ITR i.e. don’t file the ITR by March 31, 2022 for the ongoing assessment year 2021-22, you actually miss the last possibility to file the ITR or income tax return voluntarily. Further as per experts the same can be filed only in a case if the department of tax initiates some scrutiny against it.
Scrutiny under Section 142(1) or 148
Now this scrutiny can be initiated either under Section 142(1) or 148.
Section 142(1): This is a simple show cause notice sent by the AO when he or she wants the taxpayer to file the ITR. Typically such a notice is sent to taxpayers who have income below minimum taxable limit but they should be filing the ITR considering holding in foreign assets etc.
Section 148: The scrutiny under this section is undertaken in a case when the AO is of the view that the taxpayer has intentionally escaped assessment of income as the ITR is not filed. The penalty in this case can range between 50-200% of the overall tax liability.
Interest penalty of 1% per month under section 234A:
If the taxpayer fails to file the ITR by the due date then penalty interest at the rate of 1% per month is levied on the outstanding tax. Further if the outstanding tax liability is over Rs. 1 lakh, section 234A applies from the original due date which happens to be July 31, 2021 in the current case.
Importantly, even in a case when the taxpayer has discharged his or her tax liability by paying either self-assessment or advance tax, the interest penalty shall be charged until the ITR is filed.
Prosecution under section 276CC can also be undertaken by the Tax dept.
The department at its discretion can also subject a taxpayer to prosecution under section 276CC if it is of the view that there is no just cause for the negligence in ITR filing. The department can enforce rigorous imprisonment ranging from 3 months to 2 years depending on the quantum of tax evasion.