KSCAA writes letter to tax dept about taxpayers being wrongly charged late penalty for ITR filing

economictimes.indiatimes.com:

income tax department making errors in processing income tax returns (ITR). The Karnataka State Chartered Accountants Association (KSCAA) has sent a representation to the CBDT in this regard. KSCAA's representation says that the CPC has erred in considering the due date for filing ITR and has imposed penalties even for those who filed ITR well within the deadline. A chartered accountant, who did not want to be named, also said that her own firm as well as the firm's clients got slapped with the penalty for late filing of ITR even though it was filed on time.

CPC Processing Errors, according to KSCAA

According to the representation by KSCAA (a copy of which was seen by ET Wealth Online) the errors in processing of ITRs noticed by them are as follows:

• Old/ New tax regime: Numerous taxpayers have received intimations from CPC erroneously calculating their tax liability under the old tax regime, despite these taxpayers having opted for the new tax regime at time of filing their returns.
• Incorrect due date considered: Certain taxpayers, specifically partners of firms liable to tax audit, have filed their income tax returns by the extended due date of November 15, 2024. However, the CPC has issued demand notices to these taxpayers, incorrectly considering the due date as July 31, 2024, and levying late filing fees of Rs 5,000 under Section 234F.
• Interest under Section 234A and 234B: Many taxpayers have reported receiving demand notices where the CPC has incorrectly calculated interest under Sections 234A and 234B of the Act, resulting in inflated tax liabilities. Additionally, the absence of a detailed breakdown of the interest calculations in the intimation is creating difficulties for taxpayers to verify and address