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What may happen if a business does not file tax returns on time?

Answer and explanation

Correct answer: Legal penalty or interest may apply

The governing concept is legal compliance in taxation. A business must submit applicable tax returns and pay amounts due within the prescribed time under the relevant tax rules. If it files late, authorities may impose late fees, interest, penalties, or other compliance consequences, depending on the law and circumstances. Hence, option A is correct because a legal financial consequence may follow from delayed filing. Late tax filing does not automatically end customer demand, stop machinery, or change the weather. The question tests whether the learner can connect tax obligations with the legal environment rather than with production, customers, or natural conditions.

Related tags

Business-EnvironmentLegal-EnvironmentTax-ComplianceClass-12Legal EnvironmentBusiness EnvironmentBusiness StudiesClass 12 Mcq

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