PENALTIES AND PROSECUTION UNDER INCOME TAX ACT
PENALTIES UNDER INCOME TAX
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SECTION |
NATURE OF DEFAULTS |
QUNTAUM OF PENALTY |
WHO CAN IMPOSE |
|
222(1) |
Failure to pay the whole or part of the self-assessment tax, demand of tax, TDS, TCS |
Maximum amount of tax in arrears |
AO |
|
270A |
Penalty for under reporting or misreporting of income |
50% of the tax payable in case of under reporting and 200% of tax payable in case of misreporting of income |
AO, JC(A), CIT(A), CIT PCIT. |
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271A |
Failure to keep, maintain or retain books of accounts as required by section 44AA. |
Rs. 25,000 |
AO, JC(A), CIT(A). |
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271AA & 271G |
Failure to keep, maintain information and documents in respect of an international or specified domestic transactions |
2% of value of such transactions. |
AO, CIT(A). |
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271AAB |
Undisclosed income found in search: – –Assessee during search admits the undisclosed income, and
–Specifies the manner in which such income was earned and
–Pays tax plus interest on undisclosed income and
–Furnished the return of income declaring undisclosed income, before due date u/s 139(1)/ period specified u/s 148 notice.
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30% of undisclosed income |
AO, CIT(A). |
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In any other case |
60% of undisclosed income |
AO, CIT(A). |
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271AAC |
Deemed income u/s 68 to 69D |
10% on tax on deemed income u/s 115BBE |
AO, JC(A), CIT(A) |
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Note: Penalty u/s 270A not applicable when penalty has been levied u/s 271AAB or 271AAC. |
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271AAD |
Penalty for false entry or omission of any entry which is relevant for computing of total income of such person, to evade tax liability |
100% of amount of such false entry or omitted entry |
AO, JC(A), CIT(A) |
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“False entry” includes use or intention to use- –Forged or falsified documents such as false invoices or, in general, a false piece of documentary evidence; or
–Invoice in respect of supply or receipt of goods or services or both issued by the person or any other person without actual supply or receipt of such goods or services or both; or
–Invoice in respect of supply or receipt of goods or services or both to or from a person who does not exist.
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This penalty applicable on: – –Person who makes such false entry or omits an entry to evade tax liability; and
–Any other person, who caused the person in any manner to make a false entry or omit any entry to evade tax liability.
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271AAE |
Any trust referred u/s 11 or institution u/s 10(23C) gives any benefit to related person u/s 13(1) (Benefit to trustee, founder etc.) |
100% of the amount applied in case of 1st Time violation. 200% of amount applied in subsequent violation. |
AO |
|
271B |
Failure to get accounts audited up to due date u/s 44AB |
0.5% of the turnover (Max Rs. 1,50,000) |
AO |
|
271BA |
Transfer pricing audit report not furnished u/s 92E |
Rs. 1,00,000 |
AO |
|
271J |
Furnishing of incorrect information in any report or certificate by CA/ Merchant Banker/ Registered Valuer |
Rs. 10,000 per failure |
AO, JC(A), CIT(A). |
|
271K |
Institution notified u/s 35 or 80G fails to submit statement to prescribed authority or certificate to owner |
Rs. 10,000 to Rs. 1,00,000 |
AO |
|
271C |
Failure to deduct TDS or ensure payment of TDS u/s 194B or 194R or 194S or 194BA. Note: – In all four sections mentioned above, the winnings/ benefits/ perquisite/ consideration of VDA, as the case may be, is wholly in kind or partly in cash and partly in kind and the part in cash is not sufficient to meet TDS liability. |
100% amount of tax which he failed to deduct or pay or ensure payment of said tax at source. |
Jc |
PROSECUTION UNDER INCOME TAX
|
SECTION |
NATURE OF DEFAULT |
RIGOROUS IMPRISONMENT |
|
271A |
Contravention of order of deemed seizure or restrain order u/s 132(2) |
Upto 2 years plus fine. |
|
275B |
Failure to provide necessary facility to the Authorized officer to inspect books of a/c u/s 132(1)(iib) |
Upto 2 years plus fine. |
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276 |
Removal, concealment, transfer or delivery of property to thwart tax recovery |
Upto 2 years plus fine. |
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276B & 276BB |
Failure to pay TDS or TCS or ensure that TDS paid u/s 194B, 194R, 194S & 194BA |
3 months to 7 years plus fine. |
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276C(1) |
Willful attempt to evade tax, penalty or interest chargeable or imposable or under report his income |
Evasion/ tax on Unreported income is greater than Rs. 25 lakhs : 6 months to 7 years (otherwise: 3 months to 2 years) plus fine. |
|
276C(2) |
Willful attempt to evade payment of tax, penalty or interest |
3 months to 2 years plus fine, at the discretion of the court. |
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276CC |
Willful failure to furnish ROI in DD u/s 139(1), 142(1)(i), 148 |
Evasion of tax is more than Rs. 25 lakhs: 6 months to 7 years (otherwise: 3 months to 2 years) plus fine. |
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276D |
Willful failure to produce accounts and documents u/s 142(1)/ 142(2A) |
Upto 1 year plus fine. |
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277 |
False Statement in verification |
Evasion of tax is more than Rs. 25 lakhs: 6 months to 7 years (otherwise: 3 months to 2 years) plus fine. |
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277A |
Falsification of books of a/c or documents etc. to induce or abet any person to evade any tax, penalty or interest chargeable or imposable under the act. It is not necessary to prove that the other person has actually evaded any tax, penalty or interest under the Act for the purpose of establishing charge under this section. |
3 months to 2 years plus fine. |
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278 |
Abetment of false return etc. |
Evasion of tax is more than Rs. 25 lakhs: 6 months to 7 years (otherwise: 3 months to 2 years) plus fine. |
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278A |
Second and subsequent offences u/s 276B, 276BB, 276C(1), 276CC, 277, 278 |
6 months to 7 years for every subsequent offence plus fine |
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