LEVY OF PENALTY UNDER INCOME TAX ACT 1961

WHAT ARE THE DEFAULTS WHICH MAY INVITE LEVY OF PENALTY - Chapter – XVII and XXI of the Income-tax Act, 1961 contain various provisions empowering an income-tax authority to levy penalty in case of certain defaults.

The following defaults may invite levy of penalty:

1.    When the assessee is in default or is deemed to be in default in making payment of tax, including the tax deducted at source or advance tax or the self-assessment tax [Section 221 read with section 201(1)]

2.    Failure to comply with notice under section 142(1) or section 143(2) or section 143(2) or failure to comply with a direction issued u/s 142(2A) to get accounts audited [Section 271(1)(b)]

3.    Concealment of particulars of income or furnishing of inaccurate particulars of income [Section 271(1)(c)]

4.    Failure to keep, maintain books of accounts, documents etc. as required by Section 44AA by persons carrying on profession or business. [Section 271A]

5.    Failure to keep or maintain information and documents etc. in respect of international transaction or specified domestic transaction as required by Section 92D(1) and (2) of Income Tax Act [Section 271AA]

6.    In a case where search has been initiated u/s 132 on or after last day of June, 2007 [but before first day of July, 2012], on undisclosed income of the specified previous year [Section 271AAA]

7.    In a case where search has been initiated u/s 132 on or after July, 2012, on the undisclosed income of the specified previous year [Section 271AAB]

8.    Failure to get the accounts audited in respect of any previous year or years or failure to furnish a report of such audit within prescribed time period as envisaged u/s 44AB of the Act [Section 271B]

9.    Failure to furnish a report from an accountant as required by section 92E of the Income-tax Act to be furnished by persons entering into international transaction or specified domestic transaction on or before the specified date in the prescribed form duly signed and verified by such accountant in the prescribed manner [Section 271BA]

10.  Failure to deduct tax at source as required by or under the provisions of Chapter XVII-B or pay the tax as required by or under section 115-O(2) or second proviso to section 194B of the Act [Section 271C]

11.  Failure to collect the tax at source by person who is responsible to collect the whole or any part of the tax as required by or under the provisions of Chapter XVII-BB of the Income-tax Act [Section 271CA]

12.  Accepting of any loan or deposit or repayment of deposit of Rs. 20,000/- or more otherwise than by account payee cheque or account payee draft in contravention of the provisions of sections 269SS [Section 271D]

13.  Repayment of loan or deposit in contravention of the condition imposed in section 269T of the Income Tax Act [Section 271E]

14.  Failure to file the return of income as required under section 139(1) or by the provisos to that sub-section [Section 271F]

15.  Failure to furnish an annual information return as per section 285BA(1) within time prescribed under sub-section (2) thereof, for such failure for every day during which failure continues [Section 271FA]

16.  Failure to furnish a statement of financial transaction or reportable account by a person covered in clause (k) of sub­section 1 of section 285BA on account of deliberate failure in complying the due diligence required under section 285BA(7) read with section 285BA(6) of the Act (271FAA)

17.  Failure to furnish information / document under section 92D of the Act by a person, who has entered into an international transaction or specified domestic transaction, for each such failure [Section 271G]

18.  Failure to furnish a statement or furnishing an incorrect information in the statement within the time prescribed as per section 200(3) or the proviso to section 206(c)(3) [Section 271H]

19.  Refusal to state the truth to answer any question put by income tax authority in contravention of legal obligation [Section 272A(1)(a)]

20.  Refusal to sign any statement made in the course of any income tax proceedings which he is legally required to do [Section 272A(1)(b)]

21.  Failure to attend or give evidence or produce books of account or other documents in compliance with the requirement of summons issued u/s.131(1) of the Income Tax Act [Section 272A(1)(c)]

22.  Failure to furnish information regarding avoidance of tax by certain transaction in securities as required under section 94(6) of the Act [Section 272A(2)(a)]

23.  Failure to give notice of discontinuance of business or profession as required by section 176(3) of the Act [Section 272A(2)(b)]

24.  Failure to furnish in due time statements / returns / particulars mentioned in section 133 or section 206 or section 206 C or section 285B of the Act [Section 272A(2)(c)]

25.  Failure to allow inspection of any register / any entry referred in section 134 of the Act or take copies of such register or any entry therein of companies [Section 272A(2)(d)]

26.  Failure to furnish in due time the return of income by charitable or religious institution or research association or institution / educational institution referred under sub section (4A) or (4C) of section 139 of the Act [Section 272A(2)(e)]

27.  Failure to deliver or cause to be delivered in due time a copy of declaration of non-deduction of tax at source under section 197A [Section 272A(2)(f)]

28.  Failure to furnish a certificate of tax deducted at source to the person on whose behalf tax has been deducted or collected as required by section 203 or section 206(c) [Section 272A(2)(g)]

29.  Failure to deduct and pay tax from salary payable to an employee as directed by assessing officer or the tax recovery officer as required by section 226(2) of the Act [Section 272A(2)(h)]

30.  Failure to furnish a statement giving correct and complete particulars of perquisites or profits in lieu of salary as required by sub section. (2C) of section 192 of the Act [Section 272A (2)(i)]

31.  Failure to deliver or caused to be delivered in due time a copy of declaration in writing in prescribed form and verified in prescribed manner for the goods referred in column (2) of the table of section 206C(1) as referred to in section sub section (1A) of section 206C(1) [Section 272A(2)(j)]

32.  Failure to deliver to cause to be delivered the statement within the time specified in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C [Section 272A(2)(k)]

33.  Failure to allow an income tax authority to collect any information useful or relevant to the purpose of income tax under section 133B of the Act [Section 272AA]

34.  Failure to comply with the provision of section 139A(1) or sub section 5(c), (5A), (5C) of section 139A of the Act [Section 272B]

35.  Failure to comply with the provision of section 203A of the Act to quote his tax deduction account number, tax collection account number or tax deduction and tax collection account number as envisaged under sub section (2) of section 203A of the Act [Section 272BB]

36.  Failure to comply with the provision of section 206CA by a person collecting the tax in accordance with section 206C of the Act within such time as prescribed for applying the allotment of a tax collection account number [Section 272BBB]

 

Disclaimer: The contents of this article are for information purposes only and do not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc. before acting on the basis of the above write.