Penalties :
The various sections prescribe the minimum and the maximum penalty that can be levied in certain cases though the Principal Commissioner or Commissioner is empowered to waive or reduce the penalty in some cases. The authority concerned has been given the discretion to levy or not to levy a penalty. But if a penalty is levied, it cannot be less than the prescribed minimum nor can it exceed the maximum amount prescribed by the Act . The quantum of penalty levied by a lower authority can be modified by a higher authority on appeal, reference of revision. The various defaults in respect of which penalty can be levied under the Act are discussed as follows:
| Section | Nature of Default | Penalty Leviable | Remarks |
| 221(1) | Default in making payment of tax u/s 220 | As directed by Assessing Officer. Total amount of penalty cannot exceed the amount of tax in arrears. | 1. This is in addition to arrears and interest payable u/s 220(2) |
| 2. Where the assessee proves to the satisfaction of Assessing Officer that the default was for good and sufficient reasons, no penalty is leviable | |||
| 3. Even if tax is paid after default, it makes no difference | |||
| 271(1)(b) | Failure to comply with a notice u/s 142(1)/143(2) or direction u/s 142(2A). | Rs 10,000 for each such failure. | This will be in addition to tax, if any, payable |
| 271(1)(c) | Concealment of particulars of income or furnishing of inaccurate particulars of income | Minimum 100% Maximum 300% of tax sought to be evaded – in addition to tax, if any, payable. | Explanations to section 271(1) extend the scope of concealed income (see after Table for details) |
| 271(4) | Where profits of registered firm are distributed otherwise than in accordance with partnership deed and consequently the partner has not disclosed his correct income in his return | Minimum as per Assessing Officer’s discretion- Maximum 150% of tax on assessed income less tax on returned income. This will be in addition to tax, if any, payable by him. | |
| 271A | Failure to keep or maintain or retain books of account, documents etc. as required u/s 44A | Rs 25,000 | |
| 271AA | Failure to keep and maintain any information and document as required under subsection (1) or (2) of section 92D;
Failure to report such transaction which he is required to do so; Maintaining or furnishing an incorrect information or document. |
2% of the value of each international transaction or specified domestic transaction entered into by such person | |
| 271AAB | In case of search initiated under section 132 on or after 1.7.2012 | ||
| (a) | If undisclosed income is admitted during the course of search in the statement furnished under section 132(4), and the assessee explains the manner in which such income was derived, pays the tax, together with interest if any, in respect of the undisclosed income, on or before the specified date (i.e., the due date of filing return of income or the date on which the period specified in the notice issued under section 153A expires, as the case may be) and furnishes the return of income for the specified previous year declaring such undisclosed income. | 10% of undisclosed income | Undisclosed income, for the purpose of this section, means:
(1) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of a search under section 132, which has- (a) not been recorded on or before the date of search in the books of account or other documents maintained in the normal course relating to such previous year; or (b) otherwise not been disclosed to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner before the date of search; or (2) any income of the specified previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the search not been conducted.
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| (b)
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If undisclosed income relating to the specified previous year is not admitted during the course of search in the statement furnished under section 132(4) but the same is disclosed in the return of income filed after the date of search and the tax along with the interest, if any, is paid before the specified date.
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20% of undisclosed Income
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| (c)
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In all other cases
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30% to 90% of undisclosed income | |
| 271B
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Failure to get accounts audited or obtain audit report under section 44AB or to furnish the report of such auditor with return of income.
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½% of total sales turnover or gross receipts of business/gross receipts of profession or Rs 1,50,000 whichever is less. | |
| 271BA
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Failure to furnish audit report as required under section 92E
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Rs 1,00,000
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| 271C | Failure to deduct tax at source as per chapter XVII-B or to pay any part of the tax as required by – (i) Section 115-O(2) or (ii) the proviso to section 194B.
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A sum equal to the amount of tax which he failed to deduct or pay.
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With effect from 1.10.1998, penalty under sections 271C/271CA/ 271D/271E shall be imposed by the Joint Commissioner. |
| 271CA | Failure to collect the whole or any part of as required by or under the provisions of Chapter XVII-BB
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A sum equal to the amount of tax which he failed to collect. | |
| 271D | Failure to comply with the provisions of section 269SS.
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Penalty of a fixed sum equal to amount of loan or deposit or specified sum taken or accepted. | Penalty imposable by Joint Commissioner. |
| 271E | Failure to comply with the provisions of section 269T
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A sum equal to the amount of loan or deposit or specified advance so repaid. | Penalty imposable by Joint Commissioner. |
| 271F | Failure to furnish return under section 139(1) before the end of the relevant assessment year.
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Penalty of Rs 5,000. | |
| 271FA | Failure to furnish Statement of financial transaction or reportable account within the time prescribed u/s 285BA(2). | A sum of Rs 100 for every day during which failure continues. | |
| Failure to furnish Statement of financial transaction or reportable account within the time prescribed u/s 285BA(5). | A sum of Rs 500 for every day during which failure continues. | ||
| 271FAA | Furnishing inaccurate Statement of financial transaction or reportable account | Rs 50,000 | |
| 271FAB | Failure to furnish within the prescribed time, a statement or any information or document as required under section 9A(5) by an eligible investment fund | Rs 5,00,000 | Leviable by the incometax authority prescribed under section 9A(5) |
| 271G | Failure to furnish information or document under section 92D | 2% of the value of the international transaction for each such failure | Competent Authority to levy penalty:
Assessing Officer / Transfer Pricing Officer / Commissioner (Appeals). |
| 271GA | Failure to furnish information or document by an Indian concern under section 285A | 2% of the value of the transaction in respect of which such failure has taken place, if such transaction had the effect of directly or indirectly transferring the right of management or control in relation to the Indian concern; Rs.5,00,000, in any other case. | Penalty imposable by an income-tax authority prescribed under section 285A. |
| 271H
(a) |
Failure to furnish TDS/TCS statements within the prescribed time. |
Rs 10,000 to Rs 1,00,000 |
Competent Authority to levy penalty: Assessing Officer No penalty would be leviable if the person proves that after paying tax deducted or collected along with the fee under section 234E and interest, if any, to the credit of the Central Government, he had delivered or caused to be delivered the TDS/TCS statements before the expiry of one year from the time prescribed for delivering or causing to be delivered such statements.
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| (b) | Furnishing incorrect information in the said statements in respect of tax deducted or collected on or after 1.7.2012 | Rs 10,000 to Rs 1,00,000` | |
| 271-I | Failure to furnish information or furnishing inaccurate information by a person who is required to furnish information under section 195(6) | Rs1,00,000 | |
| 272A(1) | -Refusal to answer questions put by income tax authority
-Refusal to sign statements made in the course of income tax proceedings. -Non-compliance with summons issued under section 131(1) to give evidence or produce books of accounts. |
Rs 10,000 for each such default or failure | |
| 272A(2) | Failure:
To comply with notice u/s 94(6) To give notice of discontinuance of business / profession u/s 176(3) To furnish in due time returns statements mentioned in sections 133, 206, 206C or 285B. To allow inspection of register referred in section 134 To furnish returns of income u/s 139(4A) or 139(4C) To deliver or cause to be delivered copy of the declaration u/s 197A To furnish a certificate as required in section 203 or 206C To deduct and pay tax u/s 226(2) To furnish a statement as required by section 192(2C) To deliver or cause to be delivered in due time a copy of the declaration referred to in section 206C(1A) To deliver or cause to be delivered the statements within the time specified in section 206A(1)/200(2A)/ 206C(3A) |
Rs 100 for everyday during which default continues.
However, the amount of penalty for failure in relation to a declaration u/s197A, a certificate u/s 203 and a returns u/s 206 and 206C and statements u/s 200(2A)/(3) or proviso to section 206C(3)/(3A) shall not exceed the amount of tax deductible or collectible. |
Section 272A(3) specifies that for the default committed u/s 272(A)(1) and (2), the penalty can be imposed by an income-tax authority not lower in rank than a Joint Director or a Joint Commissioner. Section 272A(4) provides for grant of hearing before imposition of penalty under this provision. |
| 272AA | Failure to comply with the provision of section 133B | Any amount upto Rs 1,000 | |
| 272B | Failure to comply with the provisions of section 139A | ||
| Failure to quote/intimate PAN u/s 139A(5A) or 139A(5C) or quoting / intimating false PAN | Rs 10,000 | ||
| 272BB | Failure to comply with the provisions of section 203A Quoting false TAN willfully in challans/ certificates/statements/other documents referred to in section 203A(2) | Rs 10,000 |
No order shall be passed under sections 272A, 272AA, 272B, 272BB and 272BBB unless the person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter.