CHAPTER XXI

33[R34] [(a) in any case where the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished has the effect of reducing the loss declared in the return or converting that loss into income, means the tax that would have been chargeable on the income in respect of which particulars have been concealed or inaccurate particulars have been furnished had such income been the total income;]

(b) In any case to which Explanation 3 applies, means the tax on the total income assessed 34[R35] [as reduced by the amount of advance tax, tax deducted at source, tax collected at source and self assessment tax paid before the issue of notice under section 148];

(c) In any other case, means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished.

35[R36] [Explanation 5.—Where in the course of a 36[R37] [search initiated under section 132 before the 1st day of June, 2007], the assessee is found to be the owner of any money, bullion, jewellery or other valuable article or thing (hereafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him by utilising (wholly or in part) his income,—

(a) For any previous year which has ended before the date of the search, but the return of income for such year has not been furnished before the said date or, where such return has been furnished before the said date, such income has not been declared therein; or

(b) For any previous year which is to end on or after the date of the search, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of the search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income, 37[R38] [unless,—

(1) Such income is, or the transactions resulting in such income are recorded,—

(i) In a case falling under clause (a), before the date of the search; and

(ii) In a case falling under clause (b), on or before such date,

in the books of account, if any, maintained by him for any source of income or such income is otherwise disclosed to the 38[R39] [Chief Commissioner or Commissioner] before the said date; or

(2) he, in the course of the search, makes a statement under sub-section (4) of section 132 that any money, bullion, jewellery or other valuable article or thing found in his possession or under his control, has been acquired out of his income which has not been disclosed so far in his return of income to be furnished before the expiry of time specified in 39[R40] [* * *] sub-section (1) of section 139, and also specifies in the statement the manner in which such income has been derived and pays the tax, together with interest, if any, in respect of such income.]

40[R41] [Explanation 5A.—Where in the course of a search initiated under section 132 on or after the 1st day of June, 2007, the assessee is found to be the owner of,—

(i) any money, bullion, jewellery or other valuable article or thing (hereinafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him by utilizing (wholly or in part) his income for any previous year; or

(ii) any income based on any entry in any books of account or other documents or transactions and he claims that such entry in the books of account or other documents or transactions represents his income (wholly or in part) for any previous year,

which has ended before the date of the search and the due date for filing the return of income for such year has expired and the assessee has not filed the return, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of the search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income.]

41[R42] [Explanation 6.—Where any adjustment is made in the income or loss declared in the return under the proviso to clause (a) of sub-section (1) of section 143 and additional tax charged under that section, the provisions of this sub-section shall not apply in relation to the adjustment so made.]

42[R43] [Explanation 7.—Where in the case of an assessee who has entered into an international transaction defined in section 92B, any amount is added or disallowed in computing the total income under sub-section (4) of section 92C, then, the amount so added or disallowed shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed or inaccurate particulars have been furnished, unless the assessee proves to the satisfaction of the Assessing Officer or the Commissioner (Appeals) 43[R44] [or the Commissioner] that the price charged or paid in such transaction was computed in accordance with the provisions contained in section 92C and in the manner prescribed under that section, in good faith and with due diligence.]

44[R45] [(1A) Where any penalty is imposable by virtue of Explanation 2 to sub-section (1), proceedings for the imposition of such penalty may be initiated notwithstanding that any proceedings under this Act in the course of which such penalty proceedings could have been initiated under sub-section (1) have been completed.

45[R46] [(1B) Where any amount is added or disallowed in computing the total income or loss of an assessee in any order of assessment or reassessment and the said order contains a direction for initiation of penalty proceedings under clause (c) of sub-section (1), such an order of assessment or reassessment shall be deemed to constitute satisfaction of the Assessing Officer for initiation of the penalty proceedings under the said clause (c).]

(2) When the person liable to penalty is a registered firm or an unregistered firm which has been assessed under clause (b) of section 183, then notwithstanding anything contained in the other provisions of this Act, the penalty imposable under sub-section (1) shall be the same amount as would be imposable on that firm if that firm were an unregistered firm.

46[R47] [(3) Omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.]

(4) If the 47[R48] [Assessing] Officer or the 48[R49] [* * *] 49[R50] [Commissioner (Appeals)] in the course of any proceedings under this Act, is satisfied that the profits of a registered firm have been distributed otherwise than in accordance with the shares of the partners as shown in the instrument of partnership on the basis of which the firm has been registered under this Act, and that any partner has thereby returned his income below its real amount, he may direct that such partner shall, in addition to the tax, if any, payable by him, pay by way of penalty a sum not exceeding one and a half times the amount of tax which has been avoided, or would have been avoided if the income returned by such partner had been accepted as his correct income; and no refund or other adjustment shall be claimable by any other partner by reason of such direction.]

[(4A) And (4B) Omitted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10-1975. They were inserted by the Income-tax (Amendment) Act, 1965, w.e.f. 12-3-1965.

Sub-section (4A) was substituted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971.]

50[R51] [(5) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1989 shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.]

51[R52] [(6) Any reference in this section to the income shall be construed as a reference to the income or fringe benefits, as the case may be, and the provisions of this section shall, as far as may be, apply in relation to any assessment in respect of fringe benefits also.]

SUPREME COURT RULINGS

1. Where the assessee had offered additional income in revised return to buy peace of mind and avoid litigation, no penalty can be levied for concealment of income. The Department had not discharged its burden of proving concealment and had simply rested its conclusion on the act of voluntary surrender done by the assessee in good faith. [CIT v Suresh Chandra Mittal (2001) 251 ITR 9 (SC)]

2. The Explanation to section 271(1)(c) is a part of section 271. When the Assessing Officer or the AAC issues a notice under section 271, he makes the assessee aware that the provisions thereof are to be used against him. These provisions include the Explanation. No express invocation of the Explanation to section 271 in the notice under section 271 is necessary before the provisions of the Explanation are applied. [Madhusudhanan (K P) v CIT (2001) 251 ITR 99 (SC)]

3. Where the additions made in the assessment order on the basis of which penalty for concealment is levied, are deleted, there remains no basis at all for levying penalty for concealment, and therefore, in such a case no penalty can survive and the penalty is liable to be cancelled. Ordinarily, penalty cannot stand if the assessment itself is set aside. [K.C. Builders v ACIT (2004) 265 ITR 562 (SC)]

4. 'Concealment of income' and 'furnishing inaccurate particulars' are different though both refer to deliberate acts on the part of the assessee. A mere omission or negligence would not constitute a deliberate act of suppressio veri or suggestio falsi. [Dilip N Shroff v JCIT (2007) 291 ITR 519 (SC)]

5. The primary burden of proof is on the Revenue. The statute requires a satisfaction on the part of the Assessing Officer: he is required to arrive at a satisfaction so as to show that there is primary evidence to establish that the assessee had concealed the amount or furnished inaccurate particulars and this onus is to be discharged by the Department. While considering whether the assessee has been able to discharge his burden the Assessing Officer should not begin with the presumption that he is guilty. [Dilip N Shroff v JCIT (2007) 291 ITR 519 (SC)]

1[R53] [271A. Failure to keep, maintain or retain books of account, documents, etc.:-

Without prejudice to the provisions of section 271, if any person 2[R54] [* * *] fails to keep and maintain any such books of account and other documents as required by section 44AA or the rules made there under, in respect of any previous year or to retain such books of account and other documents for the period specified in the said rules, the 3[R55] [Assessing] Officer or the 4[R56] [* * *] 5[R57] [Commissioner (Appeals)] may direct that such person shall pay, by way of penalty, 6[R58] [a sum of twenty-five thousand rupees].]

1[R59] [271AA. Penalty for failure to keep and maintain information and document in respect of international transaction:-

Without prejudice to the provisions of section 271, if any person fails to keep and maintain any such information and document as required by sub-section (1) or sub-section (2) of section 92D, the Assessing Officer or Commissioner (Appeals) may direct that such person shall pay, by way of penalty, a sum equal to two per cent of the value of each international transaction entered into by such person.]

1[R60] [271AAA. Penalty where search has been initiated:-

(1) The Assessing Officer may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under section 132 on or after the 1st day of June, 2007, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him, a sum computed at the rate of ten per cent of the undisclosed income of the specified previous year.

(2) Nothing contained in sub-section (1) shall apply if the assessee,—

(i) In the course of the search, in a statement under sub-section (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived;

(ii) Substantiates the manner in which the undisclosed income was derived; and

(iii) Pays the tax, together with interest, if any, in respect of the undisclosed income.

(3) No penalty under the provisions of clause (c) of sub-section (1) of section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in sub-section (1).

(4) The provisions of sections 274 and 275 shall, so far as may be, apply in relation to the penalty referred to in this section.

Explanation.—For the purposes of this section,—

(a) "Undisclosed income" means—

(i) 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 Chief Commissioner or Commissioner before the date of the search; or

(ii) 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;

(b) "specified previous year" means the previous year—

(i) Which has ended before the date of search, but the date of filing the return of income under sub-section (1) of section 139 for such year has not expired before the date of search and the assessee has not furnished the return of income for the previous year before the said date; or

(ii) In which search was conducted.]

1[R61] [271B. Failure to get accounts audited2[R62] :-

If any person fails 3[R63] [* * *] to get his accounts audited in respect of any previous year or years relevant to an assessment year or 4[R64] [furnish a report of such audit as required under section 44AB], the 5[R65] [Assessing] Officer may direct that such person shall pay, by way of penalty, a sum equal to one-half per cent of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such previous year or years or a sum of one hundred thousand rupees, whichever is less.]

DEPARTMENTAL VIEW

1. Penalty for failure to comply with the provisions of section 44AB should not be initiated in cases where the audit report prescribed under the section read with rule 6G had been obtained by 30th September, 1985 and the self-assessment tax under section 140A has been paid within the normal period prescribed for filing return of income. [Circular No. 422, dated 19th June, 1985]

1[R66] [271BA. Penalty for failure to furnish report under section 92E:-

If any person fails to furnish a report from an accountant as required by section 92E, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of one hundred thousand rupees.]

1[R67] [271BB. Failure to subscribe to the eligible issue of capital:-

Whoever fails to subscribe any amount of subscription to the units issued under any scheme referred to in sub-section (1) of section 88A to the eligible issue of capital under that sub-section within the period of six months specified therein, may be directed by the 2[R68] [Joint] Commissioner to pay, by way of penalty, a sum equal to twenty per cent of such amount.]

1[R69] [271C. Penalty for failure to deduct tax at source2[R70] :-

3[R71] [(1) If any person fails to—

(a) Deduct the whole or any part of the tax as required by or under the provisions of Chapter XVIIB; or

(b) Pay the whole or any part of the tax as required by or under,—

(i) Sub-section (2) of section 115-O; or

(ii) Second proviso to section 194B,

Then, such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to deduct or pay as aforesaid.]

4[R72] [(2) any penalty imposable under sub-section (1) shall be imposed by the 5[R73] [Joint] Commissioner.]

1[R74] [271CA. Penalty for failure to collect tax at source:-

(1) If any person fails to collect the whole or any part of the tax as required by or under the provisions of Chapter XVII-BB, then, such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to collect as aforesaid.

(2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner.]

__________________________

1 Inserted by the Finance Act, 2006, w.e.f. 1-4-2007.

1[R75] [271D. Penalty for failure to comply with the provisions of section 269SS:-

2[R76] [(1)] If a person takes or accepts any loan or deposit in contravention of the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit so taken or accepted.]

3[R77] [(2) Any penalty imposable under sub-section (1) shall be imposed by the 4[R78] [Joint] Commissioner.]

1[R79] [271E. Penalty for failure to comply with the provisions of section 269T:-

2[R80] [(1)] If a person repays any 3[R81] [loan or] deposit referred to in section 269T otherwise than in accordance with the provisions of that section, he shall be liable to pay, by way of penalty, a sum equal to the amount of the 4[R82] [loan or] deposit so repaid.

5[R83] [(2) Any penalty imposable under sub-section (1) shall be imposed by the 6[R84] [Joint] Commissioner.]

1[R85] [271F. Penalty for failure to furnish return of income:-

If a person who is required to furnish a return of his income, as required under sub-section (1) of section 139 or by the provisos to that sub-section, fails to furnish such return before the end of the relevant assessment year, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of five thousand rupees.]

1[R86] [271FA. Penalty for failure to furnish annual information return:-

If a person who is required to furnish an annual information return, as required under sub-section (1) of section 285BA, fails to furnish such return within the time prescribed under that sub-section, the income-tax authority prescribed under the said sub-section may direct that such person shall pay, by way of penalty, a sum of one hundred rupees for every day during which the failure continues.]

1[R87] [271FB. Penalty for failure to furnish return of fringe benefits:-

If an employer, who is required to furnish a return of fringe benefits, as required under sub-section (1) of section 115WD, fails to furnish such return within the time prescribed under that sub-section, the Assessing Officer may direct that such employer shall pay, by way of penalty, a sum of one hundred rupees for every day during which the failure continues.]

1[R88] [271G. Penalty for failure to furnish information or document under section 92D:-

If any person who has entered into an international transaction fails to furnish any such information or document as required by sub-section (3) of section 92D, the Assessing Officer or the Commissioner (Appeals) may direct that such person shall pay, by way of penalty, a sum equal to two per cent of the value of the international transaction for each such failure.]

272. Failure to give notice of discontinuance:-

Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.]

1[R89] [272A. Penalty for failure to answer questions, sign statements, furnish information, returns or statements, allow inspections, etc.:-

(1) If any person,—

(a) Being legally bound to state the truth of any matter touching the subject of his assessment, refuses to answer any question put to him by an income-tax authority in the exercise of its powers under this Act; or

(b) Refuses to sign any statement made by him in the course of any proceedings under this Act, which an income-tax authority may legally require him to sign; or

(c) To whom a summons is issued under sub-section (1) of section 131 either to attend to give evidence or produce books of account or other documents at a certain place and time omits to attend or produce books of account or documents at the place or time; or2[R90]

3[R91] [(d) Omitted by the Finance Act, 2002, w.e.f. 1-6-2002.]

He shall pay, by way of penalty, 4[R92] [a sum of ten thousand rupees] for each such default or failure.

5[R93] (2) if any person fails—

(a) To comply with a notice issued under sub-section (6) of section 94; or

(b) To give the notice of discontinuance of his business or profession as required by sub-section (3) of section 176; or

(c) To furnish in due time any of the returns, statements or particulars mentioned in section 133 or section 206 6[R94] [* * *] 7[R95] [or section 206C] or section 285B; or

(d) To allow inspection of any register referred to in section 134 or of any entry in such register or to allow copies of such register or of any entry therein to be taken; or

8[R96] [(e) To furnish the return of income which he is required to furnish under sub-section (4A) or sub-section (4C) of section 139 or to furnish it within the time allowed and in the manner required under those sub-sections; or]

(f) To deliver or cause to be delivered in due time a copy of the declaration mentioned in section 197A; or

(g) To furnish a certificate as required by section 203 9[R97] [or section 206C]; or

(h) To deduct and pay tax as required by sub-section (2) of section 226;

10[R98] [(i) to furnish a statement as required by sub-section (2C) of section 192;]

11[R99] [(j) to deliver or cause to be delivered in due time a copy of the declaration referred to in sub-section (1A) of section 206C;]

12[R100] [(k) to deliver or cause to be delivered a copy of the statement within the time specified in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C;]

13[R101] [(l) to deliver or cause to be delivered the quarterly return within the time specified in sub-section (1) of section 206A,]

He shall pay, by way of penalty, a sum 14[R102] [of one hundred rupees], for every day during which the failure continues:

15[R103] [Provided that the amount of penalty for failures in relation to 16[R104] [a declaration mentioned in section 197A, a certificate as required by section 203 and] returns under sections 206 and 206C 17[R105] [and statements under sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C] shall not exceed the amount of tax deductible or collectible, as the case may be.]

(3) Any penalty imposable under sub-section (1) or sub-section (2) shall be imposed—

(a) In a case where the contravention, failure or default in respect of which such penalty is imposable occurs in the course of any proceeding before an income-tax authority not lower in rank than a 18[R106] [Joint] Director or a 19[R107] [Joint] Commissioner, by such income-tax authority;

(b) In a case falling under clause (f) of sub-section (2), by the Chief Commissioner or Commissioner; and

(4) No order under this section shall be passed by any income-tax authority referred to in sub-section (3) unless the person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter by such authority.

Explanation.—In this section, "income-tax authority" includes a Director General, Director, 22[R110] [Joint] Director and an Assistant Director 23[R111] [or Deputy Director] while exercising the powers vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect of the matters specified in sub-section (1) of section 131.]

1[R112] [272AA. Penalty for failure to comply with the provisions of section 133B:-

(1) If a person 2[R113] [* * *] fails to comply with the provisions of section 133B, he shall, on an order passed by the 3[R114] [Joint] Commissioner, 4[R115] [Assistant Director] 5[R116] [or Deputy Director] or the 6[R117] [Assessing] Officer, as the case may be, pay, by way of penalty, a sum which may extend to one thousand rupees.

(2) No order under sub-section (1) shall be passed unless the person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter.

1[R118] [272B. Penalty for failure to comply with the provisions of section 139A:-

(1) If a person fails to comply with the provisions of section 139A, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of ten thousand rupees.

(2) If a person who is required to quote his permanent account number in any document referred to in clause (c) of sub-section (5) of section 139A, or to intimate such number as required by sub-section (5A) 2[R119] [or sub-section (5C)] of that section, quotes or intimates a number which is false, and which he either knows or believes to be false or does not believe to be true, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of ten thousand rupees.

(3) No order under sub-section (1) or sub-section (2) shall be passed unless the person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter.]

1[R120] [272BB. Penalty for failure to comply with the provisions of section 203A:-

(1) If a person fails to comply with the provisions of section 203A, he shall, on an order passed by the 2[R121] [Assessing] Officer, pay, by way of penalty, 3[R122] [a sum of ten thousand rupees.]

4[R123] [(1A) If a person who is required to quote his "tax deduction account number" or, as the case may be, "tax collection account number" or "tax deduction and collection account number" in the challans or certificates or statements or other documents referred to in sub-section (2) of section 203A, quotes a number which is false, and which he either knows or believes to be false or does not believe to be true, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of ten thousand rupees.]

(2) No order under sub-section (1) 5[R124] [or sub-section (1A)] shall be passed unless the person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter.]

1[R125] [272BBB. Penalty for failure to comply with the provisions of section 206CA:-

(1) If a person fails to comply 2[R126] [before the 1st day of October, 2004] with the provisions of section 206CA, he shall, on an order passed by the Assessing Officer, pay, by way of penalty, a sum of ten thousand rupees.

(2) No order under sub-section (1) shall be passed unless the person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter.]

1[R127] [273. False estimate of, or failure to pay, advance tax2[R128] :-

3[R129] [(1) If the 4[R130] [Assessing] Officer, in the course of any proceedings in connection with the regular assessment for any assessment year, is satisfied that any assessee—

(a) Has furnished under clause (a) of sub-section (1) of section 209A a statement of the advance tax payable by him which he knew or had reason to believe to be untrue, or

(b) Has 5[R131] [* * *] failed to furnish a statement of the advance tax payable by him in accordance with the provisions of clause (a) of sub-section (1) of section 209A,

He may direct that such person shall, in addition to the amount of tax, if any, payable by him, pay by way of penalty a sum—

(i) which, in the case referred to in clause (a), shall not be less than ten per cent but shall not exceed one and a half times the amount by which the tax actually paid during the financial year immediately preceding the assessment year under the provisions of Chapter XVIIC falls short of—

(1) Seventy-five per cent of the assessed tax as defined in sub-section (5) of section 215, or

(2) The amount which would have been payable by way of advance tax if the assessee had furnished a correct and complete statement in accordance with the provisions of clause (a) of sub-section (1) of section 209A,

Whichever is less;

(ii) which, in the case referred to in clause (b), shall not be less than ten per cent but shall not exceed one and a half times of seventy-five per cent of the assessed tax as defined in sub-section (5) of section 215]:

6[R132] [Provided that in the case of an assessee, being a company, the provisions of this sub-section shall have effect as if for the words "seventy-five per cent", at both the places where they occur, the words "eighty-three and one-third per cent" had been substituted.]

7[R133] [(2)] If the 8[R134] [Assessing] Officer, in the course of any proceedings in connection with the regular assessment for the assessment year commencing on the 1st day of April, 1970, or any subsequent assessment year, is satisfied that any assessee—

9[R135] [(a) Has furnished under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (5) of section 209A, or under sub-section (1) or sub-section (2) of section 212, an estimate of the advance tax payable by him which he knew or had reason to believe to be untrue, or]

10[R136] [(aa) has furnished 11[R137] [under sub-section (4) of section 209A or] under sub-section (3A) of section 212 an estimate of the advance tax payable by him which he knew or had reason to believe to be untrue, or]

(b) Has 12[R138] [* * *] failed to furnish an estimate of the advance tax payable by him in accordance with the provisions of 13[R139] [clause (b) of sub-section (1) of section 209A], or

(c) Has 14[R140] [* * *] failed to furnish an estimate of the advance tax payable by him in accordance with the provisions of 15[R141] [sub-section (4) of section 209A or] sub-section (3A) of section 212,

He may direct that such person shall, in addition to the amount of tax, if any, payable by him, pay by way of penalty a sum—

(1) seventy-five per cent of the assessed tax as defined in sub-section (5) of section 215, or

16[R142] [(2) where a statement under clause (a) of sub-section (1) of section 209A was furnished by the assessee or where a notice under section 210 was issued to the assessee, the amount payable under such statement or, as the case may be, such notice,]

Whichever is less;

17[R143] [(ia) which, in the case referred to in clause (aa), shall not be less than ten per cent but shall not exceed one and a half times the amount by which the tax actually paid during the financial year immediately preceding the assessment year under the provisions of Chapter XVIIC falls short of seventy-five per cent of the assessed tax as defined in sub-section (5) of section 215;]

18[R144] [(iii) which, in the case referred to in clause (c), shall not be less than ten per cent but shall not exceed one and a half times the amount by which—

(a) where the assessee had sent a statement under clause (a), or an estimate under clause (b) of sub-section (1) of section 209A, or an estimate in lieu of a statement under sub-section (2) of that section, the tax payable in accordance with such statement or estimate; or

(b) where the assessee was required to pay advance tax in accordance with the notice issued to him under section 210, the tax payable under such notice, falls short of seventy-five per cent of the assessed tax as defined in sub-section (5) of section 215:]]

19[R145] [Provided that in the case of an assessee, being a company, the provisions of this sub-section shall have effect as if for the words "seventy-five per cent", wherever they occur, the words "eighty-three and one-third per cent" had been substituted.]

20[R146] [Explanation 21[R147] [1].—For the purposes of clause (ia) the amount paid by the assessee on or before the date extended by the 22[R148] [Chief Commissioner or Commissioner] under the 23[R149] [first] 24[R150] [proviso to sub-section (4) of section 209A or, as the case may be,] 25[R151] [first] proviso to sub-section (3A) of section 212 shall, where the date so extended falls beyond the financial year immediately preceding the assessment year, also be regarded as tax actually paid during that financial year.]

26[R152] [Explanation 2.—When the person liable to penalty is a registered firm or an unregistered firm which has been assessed under clause (b) of section 183, then, notwithstanding anything contained in the other provisions of this Act, the penalty imposable under this section shall be the same amount as would be imposable on that firm if that firm were an unregistered firm.]

27[[R153] (3) The provisions of this section shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.]

1[R154] [273A. Power to reduce or waive penalty, etc., in certain cases2[R155] :-

(1) Notwithstanding anything contained in this Act, the 3[R156] [* * *] Commissioner may, in his discretion, whether on his own motion or otherwise,—

[(i) Omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.]

(ii) Reduce or waive the amount of penalty imposed or imposable on a person under clause (iii) of sub-section (1) of section 271; 4[R157] [or]

[(iii) Omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.]

If he is satisfied that such person—

[(a) Omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. It was amended by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.]

(b) In the case referred to in clause (ii), has, prior to the detection by the 5[R158] [Assessing] Officer, of the concealment of particulars of income or of the inaccuracy of particulars furnished in respect of such income, voluntarily and in good faith, made full and true disclosure of such particulars;

[(c) Omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.]

and also has, 6[R159] [in the case referred to in clause (b)], co-operated in any enquiry relating to the assessment of his income and has either paid or made satisfactory arrangements for the payment of any tax or interest payable in consequence of an order passed under this Act in respect of the relevant assessment year.

Explanation 7[R160] [* * *].—For the purposes of this sub-section, a person shall be deemed to have made full and true disclosure of his income or of the particulars relating thereto in any case where the excess of income assessed over the income returned is of such a nature as not to attract the provisions of clause (c) of sub-section (1) of section 271.

[Explanation 2.—Omitted by the Finance Act, 1985, w.e.f. 24-5-1985. It was inserted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984.]

(2) Notwithstanding anything contained in sub-section (1),—

8[R161] [(a) Omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.]]

(b) if in a case falling under clause (c) of sub-section (1) of section 271, the amount of income in respect of which the penalty is imposed or imposable for the relevant assessment year, or, where such disclosure relates to more than one assessment year, the aggregate amount of such income for those years, exceeds a sum of five hundred thousand rupees,

No order reducing or waiving the penalty under sub-section (1) shall be made by 9[R162] [the Commissioner except with the previous approval of the Chief Commissioner or Director General, as the case may be].

(3) Where an order has been made under sub-section (1) in favour of any person, whether such order relates to one or more assessment years, he shall not be entitled to any relief under this section in relation to any other assessment year at any time after the making of such order:

10[R163] [Provided that where an order has been made in favour of any person under sub-section (1) on or before the 24th day of July, 1991, such person shall be entitled to further relief only once in relation to other assessment year or years if he makes an application to the income-tax authority referred to in sub-section (4) at any time before the 1st day of April, 1992.]

(4) Without prejudice to the powers conferred on him by any other provision of this

Act, the 11[R164] [* * *] Commissioner may, on an application made in this behalf by an assessee, and after recording his reasons for so doing, reduce or waive the amount of any penalty payable by the assessee under this Act, or stay or compound any proceeding for the recovery of any such amount, if he is satisfied that—

(i) To do otherwise would cause genuine hardship to the assessee, having regard to the circumstances of the case; and

(ii) The assessee has co-operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him:

12[R165] [Provided that where the amount of any penalty payable under this Act or, where such application relates to more than one penalty, the aggregate amount of such penalties exceeds one hundred thousand rupees, no order reducing or waiving the amount or compounding any proceeding for its recovery under this sub-section shall be made by 13[R166] [the Commissioner except with the previous approval of the Chief Commissioner or Director General, as the case may be].

(5) Every order made under this section shall be final and shall not be called into question by any court or any other authority.]

14[R167] [(6) The provisions of this section 15[R168] [as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1989] shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.]

16[R169] [(7) Notwithstanding anything contained in sub-section (6), the provisions of sub-section (1), sub-section (2) or, as the case may be, sub-section (4) [as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1989 (3 of 1989)], shall apply in the case of reduction or waiver of penalty or interest in relation to any assessment for the assessment year commencing on the 1st day of April, 1988 or any earlier assessment year, with the modifications that the power under the said sub-section (1) shall be exercisable only by the Commissioner and instead of the previous approval of the Board, the Commissioner shall obtain the previous approval of the Chief Commissioner or Director General, as the case may be, while dealing with such case.]

DEPARTMENTAL VIEW

1. The "genuine hardship" referred to in the provisions of section 273A(4) should exist at the time at which the application under section 273A(4) is made by the assessee before the Commissioner and should so exist even at the time of passing of order under section 273A(4) by the Commissioner. [Circular No. 784, dated 22nd November, 1999]

2. Orders passed under this section are quasi-judicial in nature and should therefore be supported by reasons with reference to the facts of the case. [Instruction No. 1417, dated 29th September, 1981]

3. A disclosure following a search in which unaccounted cash or other incriminating documents were discovered cannot be considered to be a voluntary one. [Instruction No. 1142, dated 25th January, 1978]

4. There can be no waiver or reduction of penalty where part of the concealed income was detected prior to the detection. [Advice of the Ministry of Law, dated 7th August, 1981]

1[R170] [273AA. Power of Commissioner to grant immunity from penalty:-

(1) A person may make an application to the Commissioner for granting immunity from penalty, if—

(a) He has made an application for settlement under section 245C and the proceedings for settlement have abated under section 245HA; and

(b) The penalty proceedings have been initiated under this Act.

(2) The application to the Commissioner under sub-section (1) shall not be made after the imposition of penalty after abatement.

(3) The Commissioner may, subject to such conditions as he may think fit to impose, grant to the person immunity from the imposition of any penalty under this Act, if he is satisfied that the person has, after the abatement, co-operated with the income-tax authority in the proceedings before him and has made a full and true disclosure of his income and the manner in which such income has been derived.

(4) The immunity granted to a person under sub-section (3) shall stand withdrawn, if such person fails to comply with any condition subject to which the immunity was granted and thereupon the provisions of this Act shall apply as if such immunity had not been granted.

(5) The immunity granted to a person under sub-section (3) may, at any time, be withdrawn by the Commissioner, if he is satisfied that such person had, in the course of any proceedings, after abatement, concealed any particulars material to the assessment from the income-tax authority or had given false evidence, and thereupon such person shall become liable to the imposition of any penalty under this Act to which such person would have been liable, had not such immunity been granted.]

1[R171] [273B. Penalty not to be imposed in certain cases:-

Notwithstanding anything contained in the provisions of 2[R172] [clause (b) of sub-section (1) of] 3[R173] [section 271, section 271A, 4[R174] [section 271AA] section 271B, 5[R175] [section 271BA] 6[R176] [section 271BB,] section 271C, 7[R177] [section 271CA,] section 271D, section 271E, 8[R178] [section 271F,] 9[R179] [section 271FA,] 10[R180] [section 271FB,] 11[R181] [section 271G,] clause (c) or clause (d) of sub-section (1) or sub-section (2) of section 272A, sub-section (1) of section 272AA] or 12[R182] [section 272B, or] 13[R183] [sub-section (1) 14[R184] [or sub-section (1A)] of section 272BB or] 15[R185] [sub-section (1) of section 272BBB or] clause (b) of sub-section (1) or clause (b) or clause (c) of sub-section (2) of section 273, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure.]

274. Procedure:-

(1) No order imposing a penalty under this Chapter shall be made unless the assessee has been heard, or has been given a reasonable opportunity of being heard.

1[R186] [(2) No order imposing a penalty under this Chapter shall be made—

(a) By the Income-tax Officer, where the penalty exceeds ten thousand rupees;

(b) By the Assistant Commissioner 2[R187] [or Deputy Commissioner], where the penalty exceeds twenty thousand rupees,

Except with the prior approval of the 3 [R188] [Joint] Commissioners.]

4[R189] [(3) An income-tax authority on making an order under this Chapter imposing a penalty, unless he is himself the Assessing Officer, shall forthwith send a copy of such order to the Assessing Officer.]

1[R190] [275. Bar of limitation for imposing penalties:-

2[R191] [(1)] No order imposing a penalty under this Chapter shall be passed—

3[R192] [(a) in a case where the relevant assessment or other order is the subject-matter of an appeal to the 4[R193] [* * *] Commissioner (Appeals) under section 246 5[R194] [or section 246A] or an appeal to the Appellate Tribunal under section 253, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which the order of the 6[R195] [* * *] Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the Chief Commissioner or Commissioner, whichever period expires later:

7[R196] [Provided that in a case where the relevant assessment or other order is the subject-matter of an appeal to the Commissioner (Appeals) under section 246 or section 246A, and the Commissioner (Appeals) passes the order on or after the 1st day of June, 2003 disposing of such appeal an order imposing penalty shall be passed before the expiry of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed, or within one year from the end of the financial year in which the order of the Commissioner (Appeals) is received by the Chief Commissioner or Commissioner, whichever is later;]

(b) In a case where the relevant assessment or other order is the subject-matter of revision under section 263 8[R197] [or section 264], after the expiry of six months from the end of the month in which such order of revision is passed;

(c) In any other case, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated are completed, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later.]

9[R198] [(1A) In a case where the relevant assessment or other order is the subject-matter of an appeal to the Commissioner (Appeals) under section 246 or section 246A or an appeal to the Appellate Tribunal under section 253 or an appeal to the High Court under section 260A or an appeal to the Supreme Court under section 261 or revision under section 263 or section 264 and an order imposing or enhancing or reducing or canceling penalty or dropping the proceedings for the imposition of penalty is passed before the order of the Commissioner (Appeals) or the Appellate Tribunal or the High Court or the Supreme Court is received by the Chief Commissioner or the Commissioner or the order of revision under section 263 or section 264 is passed, an order imposing or enhancing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty may be passed on the basis of assessment as revised by giving effect to such order of the Commissioner (Appeals) or, the Appellate Tribunal or the High Court, or the Supreme Court or order of revision under section 263 or section 264:

Provided that no order of imposing or enhancing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty shall be passed—

(a) Unless the assessee has been heard, or has been given a reasonable opportunity of being heard:

(b) After the expiry of six months from the end of the month in which the order of the Commissioner (Appeals) or the Appellate Tribunal or the High Court or the Supreme Court is received by the Chief Commissioner or the Commissioner or the order of revision under section 263 or section 264 is passed:

Provided further that the provisions of sub-section (2) of section 274 shall apply in respect of the order imposing or enhancing or reducing penalty under this sub-section.]

10[R199] [(2) the provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any action initiated for the imposition of penalty on or before the 31st day of March, 1989.]

11[R200] [Explanation.—In computing the period of limitation for the purposes of this section,—

(i) The time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129;

(ii) Any period during which the immunity granted under section 245H remained in force; and

(iii) Any period during which a proceeding under this Chapter for the levy of penalty is stayed by an order or injunction of any court,

Shall be excluded.]]

[R1]Prior to the omission, section 270 was amended by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.

[R2]Section 271 was sought to be substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989 but was restored to its earlier version by the Direct Tax Laws (Amendment) Act, 1989 with effect from the same date.

[R3]See Circular No. 17(XLV-18)D of 1965; 22D(LXV 25), dated 18-12-1967; 162, dated 24-3-1975; 186, dated 23-12-1975; Letters F. No. 58/25/67-IT (Inv), dated 11-4-1967; 58/104/67-IT (Inv), dated 1-1-1968; 284/41/72-IT (Inv), dated 30-8-1972; 284/4/75-IT (Inv), dated 16-10-1975; 221/34/76-IT (AII), dated 7-4-1981; 284/64/77-IT (Inv), dated 3-6-1985 and 281/8/86-IT (Inv III), dated 14-2-1986 and Board's Instruction No. 1160, dated 31-3-1978.

[R4]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

[R5]The words "Deputy Commissioner (Appeals) or the" omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. The words "Deputy Commissioner (Appeals)" were substituted for "Appellate Assistant Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. The words "or the Commissioner (Appeals)" were inserted by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978.

[R6]Inserted by the Finance (No. 2) Act, 1977, w.e.f 10-7-1978.

[R7]Inserted by the Finance Act, 2002, w.e.f. 1-6-2002.

[R8]Prior to the omission, clause (a) was amended by the Finance Act, 1963, w.e.f. 28-4-1963 and Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.

[R9]The words ", without reasonable cause," omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.

[R10]Inserted by the Finance Act, 2005, w.e.f. 1-4-2006.

[R11]Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.

[R12]The word "deliberately" omitted by the Finance Act, 1964, w.e.f. 1-4-1964.

[R13]Inserted by the Finance Act, 2005, w.e.f. 1-4-2006.

[R14]Inserted by the Finance Act, 2005, w.e.f. 1-4-2006.

[R15]Prior to the omission, clause (i) was substituted by the Direct Taxes (Amendment) Act, 1974, w.r.e.f. 1-4-1962 and Taxation Laws (Amendment) Act, 1975, w.e.f 1-4-1976.

[R16]Substituted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.

[R17]Substituted for "in addition to any tax payable" by the Finance Act, 2002, w.e.f. 1-4-2003.

[R18]Substituted for "which shall not be less than one thousand rupees but which may extend to twenty-five thousand rupees" by the Finance Act, 2001, w.e.f. 1-6-2001.

[R19]Substituted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976. Earlier, clause (iii) was substituted by the Finance Act, 1968, w.e.f. 1-4-1968.

[R20]Inserted by the Finance Act, 2005, w.e.f. 1-4-2006.

[R21]Substituted for "in addition to any tax payable" by the Finance Act, 2002, w.e.f. 1-4-2003.

[R22]Substituted for "twice" by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.

[R23]Inserted by the Finance Act, 2005, w.e.f. 1-4-2006.

[R24]Inserted by the Finance Act, 2005, w.e.f. 1-4-2006.

[R25]Substituted for Explanation by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976. Earlier, the Explanation was inserted by the Finance Act, 1964, w.e.f. 1-4-1964.

[R26]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

[R27]The words "Deputy Commissioner (Appeals) or the" omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. The words "Deputy Commissioner (Appeals)" were substituted for "Appellate Assistant Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. The words "or the Commissioner (Appeals)" were inserted by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978.

[R28]Inserted by the Finance (No. 2) Act, 1977, w.e.f 10-7-1978.

[R29]Inserted by the Finance Act, 2002, w.e.f. 1-6-2002.

[R30]Inserted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.

[R31]Substituted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Prior to the substitution, Explanation 3 was amended by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978.

[R32]The words "who has not previously been assessed under this Act" omitted by the Finance Act, 2002, w.e.f. 1-4-2003.

[R33]The words "Deputy Commissioner (Appeals) or the" omitted by Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. The words "Deputy Commissioner (Appeals)" were substituted for "Appellate Assistant Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. The words "or the Commissioner (Appeals)" were inserted by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978.

[R34]33 Substituted by the Finance Act, 2002, w.e.f. 1-4-2003. Prior to the substitution, clause (a), as originally enacted, read as under:

"(a) in any case where the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished exceeds the total income assessed, means the tax that would have been chargeable on the income in respect of which particulars have been

concealed or inaccurate particulars have been furnished had such income been the total income;"

[R35]Inserted by the Finance Act, 2007, w.r.e.f. 1-4-2003.

[R36]Inserted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984.

[R37]Substituted for "search under section 132" by the Finance Act, 2007, w.e.f. 1-6-2007.

[R38]Substituted for "unless such income is, or the transactions resulting in such income are, recorded—

(i) in a case falling under clause (a), before the date of the search; and

(ii) in a case falling under clause (b), on or before such date,

in the books of account, if any, maintained by him for any source of income or such income is otherwise disclosed to the Commissioner before the said date."

by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986 w.e.f. 10-9-1986

[R39]Substituted for "Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

[R40]The words "clause (a) or clause (b) of" omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.

[R41]Inserted by the Finance Act, 2007, w.e.f. 1-6-2007.

[R42]Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.

[R43]Inserted by the Finance Act, 2001, w.e.f. 1-4-2002.

[R44]Inserted by the Finance Act, 2002, w.e.f. 1-6-2002.

[R45]Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.

[R46]Inserted by the Finance Act, 2008, w.r.e.f. 1-4-1989.

[R47]Prior to the omission, sub-section (3) was amended by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.

[R48]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

[R49]The words "Deputy Commissioner (Appeals) or the" omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. The words "Deputy Commissioner (Appeals)" were substituted for "Appellate Assistant Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. The words "or the Commissioner (Appeals)" were inserted by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978.

[R50]Inserted by the Finance (No. 2) Act, 1977, w.e.f 10-7-1978.

[R51]Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.

[R52]Inserted by the Finance Act, 2005, w.e.f. 1-4-2006.

[R53]Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.

[R54]The words ", without reasonable cause," omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f 10-9-1986.

[R55]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

[R56]The words "Deputy Commissioner (Appeals) or the" omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. The words "Deputy Commissioner (Appeals)" were substituted for "Appellate Assistant Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. The words "or the Commissioner (Appeals)" were inserted by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978.

[R57]Inserted by the Finance (No. 2) Act, 1977, w.e.f 10-7-1978.

[R58]Substituted for "a sum which shall not be less than two thousand rupees but which may extend to one hundred thousand rupees" by the Finance Act, 2001, w.e.f. 1-6-2001, which were earlier substituted for "a sum which shall not be less than ten per cent but which shall not exceed fifty per cent of the amount of tax, if any, which would have been avoided if the income returned by such person had been accepted as the correct income" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.

[R59]Inserted by the Finance Act, 2001, w.e.f. 1-4-2002.

[R60]Inserted by the Finance Act, 2007, w.e.f. 1-4-2007.

[R61]Inserted by the Finance Act, 1984, w.e.f. 1-4-1985.

[R62]See Circular Nos. 422, dated 19-6-1985; 582, dated 23-10-1990 and 628, dated 6-3-1992.

[R63]The words ", without reasonable cause," omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.

[R64]Substituted for "obtain a report of such audit as required under section 44AB or furnish the said report along with the return of his income filed under sub-section (1) of section 139, or along with the return of income furnished in response to a notice under clause (i) of sub-section (1) of section 142" by the Finance Act, 1995, w.e.f. 1-7-1995. The italicised words were inserted by the Finance Act, 1988, w.e.f. 1-4-1989.

[R65]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

[R66]Inserted by the Finance Act, 2001, w.e.f. 1-4-2002.

[R67]Inserted by the Finance Act, 1990, w.e.f. 1-4-1990.

[R68]Substituted for "Deputy" by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

[R69]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.

[R70]See Circular No. 685, dated 20-6-1994; 686, dated 12-8-1994 and 696, dated 16-12-1994.

[R71]3 Substituted by the Finance Act, 1997, w.e.f. 1-6-1997. Prior to the substitution, sub-section (1) read as under:

"*[(1)] If any person fails to deduct the whole or any part of the tax as required by or under the provisions of Chapter XVIIB, he shall be liable to pay, by way of penalty, a sum equal to the amount of the tax which he failed to deduct as aforesaid."

* Renumbered by the Finance Act, 1990, w.e.f. 1-4-1990.

[R72]Inserted by the Finance Act, 1990, w.e.f. 1-4-1990.

[R73]Substituted for "Deputy" by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

[R74]Inserted by the Finance Act, 2006, w.e.f. 1-4-2007.

[R75]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.

[R76]Inserted by the Finance Act, 1990, w.e.f. 1-4-1990.

[R77]Inserted by the Finance Act, 1990, w.e.f. 1-4-1990.

[R78]Substituted for "Deputy" by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

[R79]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.

[R80]Inserted by the Finance Act, 1990, w.e.f. 1-4-1990.

[R81]Inserted by the Finance Act, 2003, w.e.f. 1-6-2003.

[R82]Inserted by the Finance Act, 2003, w.e.f. 1-6-2003.

[R83]Inserted by the Finance Act, 1990, w.e.f. 1-4-1990.

[R84]Substituted for "Deputy" by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

[R85] Substituted by the Finance Act, 2002, w.e.f. 1-6-2002. Prior to the substitution, section 271F, as substituted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999, as amended later, read as under:

"271F. Penalty for failure to furnish return of income.—If a person who is required to furnish a return of his income, as required under sub-section (1) of section 139, fails to furnish such return before the end of the relevant assessment year, he shall be liable to pay, by way of penalty, a sum of 1[five thousand rupees]:

Provided that a person who is required to furnish a return of his income, as required by the proviso to sub-section (1) of section 139, fails to furnish such return on or before the due date, he shall be liable to pay, by way of penalty, a sum of 2[five thousand rupees]."

1 Substituted for "one thousand rupees" by the Finance Act, 2001, w.e.f. 1-6-2001.

2 Substituted for "five hundred rupees", ibid.

Earlier, section 271F was inserted by the Finance Act, 1997, w.e.f. 1-4-1997.

[R86]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005.

[R87]Inserted by the Finance Act, 2005, w.e.f. 1-4-2006.

[R88]Inserted by the Finance Act, 2001, w.e.f. 1-4-2002.

[R89]Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Prior to the substitution, section 272A was inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976 and amended by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978; Finance Act, 1982, w.e.f. 1-6-1982; Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986 and Finance Act, 1987, w.e.f. 1-6-1987.

[R90]The word "or" needs to be deleted consequent upon the omission of clause (d).

[R91]Prior to the omission, clause (d) read as under:

"(d) fails to comply with the provisions of section 139A,"

[R92]Substituted for "a sum which shall not be less than five hundred rupees but which may extend to ten thousand rupees" by the Finance Act, 2001, w.e.f. 1-6-2001.

[R93]See Instruction No. 1727, dated 22-8-1986.

[R94]The words "or section 206A or section 206B" omitted by the Finance (No. 2) Act, 1996, w.e.f. 1-10-1996.

[R95]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.

[R96]Substituted by the Finance Act, 2002, w.e.f. 1-4-2003. Prior to the substitution, clause (e), read as under:

"(e) to furnish the return of income which he is required to furnish under sub-section (4A) of section 139 or to furnish it within the time allowed and in the manner required under that sub-section; or"

[R97]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.

[R98]Inserted by the Finance Act, 2001, w.e.f. 1-4-2002.

[R99]Inserted by the Taxation Laws (Amendment) Act, 2003, w.e.f. 8-9-2003.

[R100]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005.

[R101]

[R102]Substituted for "which shall not be less than one hundred rupees, but which may extend to two hundred rupees" by the Finance Act, 1999, w.e.f. 1-6-1999.

[R103]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.

[R104]Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999.

[R105]Inserted by the Finance Act, 2006, w.e.f. 1-6-2006.

[R106]Substituted for "Deputy" by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

[R107]Ibid.

[R108]Ibid.

[R109]Ibid.

[R110]Substituted for "Deputy" by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

[R111]Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

[R112]Inserted by the Finance Act, 1986, w.e.f. 13-5-1986.

[R113]The words ", without reasonable cause," omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.

[R114]Substituted for "Deputy" by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998 which was earlier substituted for "Inspecting Assistant" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

[R115]Substituted for "Assistant Director of Inspection" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

[R116]Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

[R117]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

[R118]Inserted by the Finance Act, 2002, w.e.f. 1-6-2002. Earlier, section 272B, as inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976, was amended by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986 and omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.

[R119]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005.

[R120]Inserted by the Finance Act, 1987, w.e.f. 1-6-1987.

[R121]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

[R122]Substituted for "a sum which may extend to five thousand rupees" by the Finance Act, 2001, w.e.f. 1-6-2001.

[R123]Inserted by the Finance Act, 2006, w.e.f. 1-6-2006.

[R124]Inserted by the Finance Act, 2006, w.e.f. 1-6-2006.

[R125]Inserted by the Finance Act, 2002, w.e.f. 1-6-2002.

[R126]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-10-2004.

[R127]Substituted by the Finance Act, 1969, w.e.f. 1-4-1970.

[R128]See Board's Letters F. No. 281/8/86-IT (Inv III), dated 14-2-1986 and 284/41/72-IT (Inv), dated 30-8-1972.

[R129]Inserted by the Finance Act, 1978, w.e.f. 1-6-1978.

[R130]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

[R131]The words ", without reasonable cause," omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.

[R132]Inserted by the Finance (No. 2) Act, 1980, w.e.f. 1-9-1980.

[R133]Inserted by the Finance Act, 1978, w.e.f. 1-6-1978.

[R134]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

[R135]Substituted by the Finance Act, 1978, w.e.f. 1-6-1978. Earlier, it was amended by the Finance (No. 2) Act, 1977, w.e.f. 1-9-1977.

[R136]Inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-9-1977.

[R137]Inserted by the Finance Act, 1978, w.e.f. 1-6-1978.

[R138]The words ", without reasonable cause" omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.

[R139]The words ", without reasonable cause" omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.

[R140]The words ", without reasonable cause," omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.

[R141]

[R142]Substituted by the Finance Act, 1978, w.e.f. 1-6-1978.

[R143]Inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-9-1977.

[R144]Substituted by the Finance Act, 1978, w.e.f. 1-6-1978.

[R145]Inserted by the Finance (No. 2) Act, 1980, w.e.f. 1-9-1980.

[R146]Inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-9-1977.

[R147]Inserted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-4-1985.

[R148]Substituted for "Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

[R149]Inserted by the Finance Act, 1981, w.e.f. 1-4-1981.

[R150]Inserted by the Finance Act, 1978, w.e.f. 1-6-1978.

[R151]Inserted by the Finance Act, 1981, w.e.f. 1-4-1981.

[R152]Inserted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-4-1985.

[R153]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.

[R154]Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10-1975.

[R155]See Instruction Nos. 1142, dated 25-1-1978 and 1417, dated 29-9-1981; Ministry of Law, Justice and Company Affairs' advice, dated 7-8-1981 and Circular No. 784, dated 22-11-1999.

[R156]The words "Chief Commissioner or" omitted by the Finance Act, 1993, w.e.f. 1-6-1993, which were earlier inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

[R157]Superfluous, should be deleted.

[R158]Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

[R159]Substituted for "in all the cases referred to in clauses (a), (b) and (c)" by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.

[R160]The figure "1" omitted by the Finance Act, 1985, w.e.f. 24-5-1985. It was inserted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984.

[R161]Prior to the omission, clause (a) was amended by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984.

[R162]Substituted for "the Chief Commissioner or Commissioner except with the previous approval of the Board" by the Finance Act, 1993, w.e.f. 1-6-1993. Earlier, the italicised words were substituted for "Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

[R163]

[R164]The words "Chief Commissioner or" omitted by the Finance Act, 1993, w.e.f. 1-6-1993, which were earlier inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

[R165]Inserted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984.

[R166]Substituted for "the Chief Commissioner or Commissioner except with the previous approval of the Board" by the Finance Act, 1993, w.e.f. 1-6-1993. Earlier, the italicised words were substituted for "Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

[R167]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.

[R168]Ibid.

[R169]Inserted by the Finance Act, 1994, w.e.f. 1-6-1994.

[R170]Inserted by the Finance Act, 2008, w.e.f. 1-4-2008.

[R171]Inserted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.

[R172]Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.

[R173]Substituted for "section 270, clause (a) or clause (b) of sub-section (1) of section 271, section 271A, section 271B, sub-section (2) of section 272A, sub-section (1) of section 272AA, sub-section (1) of section 272B" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.

[R174]Inserted by the Finance Act, 2001, w.e.f. 1-4-2002.

[R175]Ibid.

[R176]Inserted by the Finance Act, 1990, w.e.f. 1-4-1990.

[R177]Inserted by the Finance Act, 2006, w.e.f. 1-4-2007.

[R178]Inserted by the Finance Act, 1997, w.e.f. 1-4-1997.

[R179]Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005.

[R180]Inserted by the Finance Act, 2005, w.e.f. 1-4-2006.

[R181]Inserted by the Finance Act, 2001, w.e.f. 1-4-2002.

[R182]Inserted by the Finance Act, 2002, w.e.f. 1-6-2002.

[R183]Inserted by the Finance Act, 1987, w.e.f. 1-6-1987.

[R184]Inserted by the Finance Act, 2006, w.e.f. 1-6-2006.

[R185]Inserted by the Finance Act, 2002, w.e.f. 1-6-2002.

[R186]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Earlier, sub-section (2) was amended by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971 and omitted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1975.

[R187]Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

[R188]Substituted for "Deputy" by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

[R189]Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Earlier, sub-section (3) was substituted by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978.

[R190]Substituted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971.

[R191]Inserted by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1989.

[R192]Clauses (a), (b) and (c) substituted for clauses (a) and (b) by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Prior to their substitution, clause (a) was amended by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978.

[R193]The words "Deputy Commissioner (Appeals) or the" omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

[R194]Inserted by the Finance Act, 2000, w.e.f. 1-6-2000.

[R195]The words "Deputy Commissioner (Appeals) or the" omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. These words were inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.

[R196]Inserted by the Finance Act, 2003, w.e.f. 1-6-2003.

[R197]Inserted by the Finance Act, 2003, w.e.f. 1-6-2003.

[R198]Inserted by the Taxation Laws (Amendment) Act, 2006, w.e.f. 13-7-2006.

[R199]Substituted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971.

[R200]Substituted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.