The Madras High Court on Friday ordered notice to the Centre on a public interest litigation petition challenging the constitutional validity of Section 234F of the Income Tax Act of 1961.
The provision, inserted recently, provides for imposing a “fee” of ₹5,000 and ₹10,000 for failing to furnish income-tax returns within the stipulated time.
The first Division Bench of Chief Justice Indira Banerjee and Justice P.T. Asha said any decision on the issue could be taken only after hearing the Union Finance Ministry.
The CJ wondered what was wrong in imposing a penalty for delay in furnishing the returns.
T. Mohan, counsel for the petitioner, K. Nirai Mathi Azhagan of Vellore, contended that imposing a flat penalty of ₹5,000 on those who file returns after the stipulated time but before December 31 of the assessment year, and ₹10,000 in all other cases, without creating an intelligible differentia between those who pay tax for a huge amount of income and those who pay tax for lower income, amounted to treating unequals as equals.
