PENAL PROVISIONS UNDER INCOME TAX ACT

PENAL PROVISIONS UNDER INCOME TAX ACT

Provisions under section 221: Section 221(1) of the Act states that if a person fails to pay tax i.e. in case of non-payment of tax by notice under section 156 of the Act, the quantum of penalty imposed is amount of tax in arrears. The minimum penalty imposed is such amount as Assessing Officer may impose for default or continuing default. But no penalty is imposed in case of reasonable cause of default.

Provisions under Section 271: There are many sub-sections and sub-clauses under Section 271 of the Act which deals with the penal provisions.

Section 271(1)(b) deals with cases where non-compliance with notice under section 142(1) to file returns or to produce documents required by Assessing Officer or under 143(2) to produce evidence on which assessee  relies or under 142(2A) to get accounts  audited. The fixed penalty imposed in such cases is Rs. 10000/-

Section 271 (1) (c) deals with cases of concealment of the particulars of income, or furnishing inaccurate particulars thereof. The minimum penalty imposed in such cases is 100% of the amount of tax sought to be evaded. The maximum penalty imposed in such cases is 300% of the amount of tax sought to be evaded.

Section 271A deals with cases of failure to keep, maintain or retain books of account, documents etc. as required under Section 44AA& rules there under. It states that the fixed quantum of penalty imposed in such cases is Rs.25, 000/-

Section 271AA deals with cases of failure to keep and maintain information and documents under Section 92D. The amount of penalty is fixed at 2% of the value of each international transaction.

Section 271B deals with cases of failure to get accounts audited or furnish a report of such audit as required under Section 44AB. The minimum penalty imposed is ½% of total sales, turn over or gross receipts, as the case may be. The maximum quantum of penalty is Rs. 1,00,000/-

Section 271C deals with failure to deduct the whole or part of the tax as required by or under chapter XVIIB or failure to pay the whole or part of tax under Section 115-0.  The penalty amount is equal to tax which has not been deducted.

Section 271D deals with cases where any loan or deposit taken in contravention of Section 269SS. Penalty is equal to the loan or deposit taken or accepted.

Section 271E deals with cases where any deposit which is repaid in contravention of Section 269T. The amount of penalty is equal to the deposit repaid.