Penalty for failure to comply with notice under section 142(1) or 143(2) of failure to comply with a direction u/s 142(2A) [Section 272A]

Related amendment in section: 288

Effective from: A.Y.2017-18

(i) Under section 272A(1), penalty of ` 10,000 is leviable in each of the following cases:

(a) for failure or default to answer the questions raised by an income-tax authority under the Income-tax Act, 1961;

(b) for refusal to sign any statement legally required during the proceedings under the Income-tax Act, 1961; or

(c) failure to attend to give evidence or produce books or documents as required under section 131(1).

(ii) New clause (d) has been included in section 272A(1) to levy penalty of ` 10,000 for each default or failure to comply with a notice issued under section 142(1) or section 143(2) or failure to comply with a direction issued under section 142(2A).

(iii) Accordingly, section 272A(3) has been amended to provide that penalty in case of failure referred to above shall be levied by the income tax authority issuing such notice or direction.

(iv) Section 288(4) has been consequentially amended to provide that no person, inter alia, on whom penalty has been imposed under this Act [other than penalty imposed under section 272A(1)(d)] shall be qualified to represent an assessee before any income-tax authority or the Appellate Tribunal in connection with any proceeding under the Income-tax Act, 1961, for such time as the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may by order determine.

In effect, a person on whom penalty has been imposed under section 272A(1)(d) is not disqualified from representing an assessee before any income-tax authority or the Appellate Tribunal.