Analysis of Union Budget 2017 provisions of Income Tax Service Tax Excise Duty Custom Duty with Budget Highlights Commentary Speech, Notification, News & Articles.
Penalty on professionals for furnishing incorrect information in statutory report or certificate
The thrust of the Government in recent past is on voluntary compliance. Certification of various reports and certificates by a qualified professional has been provided in the Act to ensure that the information furnished by an assessee under the provisions of the Act is correct. Various provisions exist under the Act to penalise the defaulting assessee in case of furnishing incorrect information. However, there exist no penal provision for levy of penalty for furnishing incorrect information by the person who is responsible for certifying the same.
In order to ensure that the person furnishing report or certificate undertakes due diligence before making such certification, it is proposed to insert a new section 271J so as to provide that if an accountant or a merchant banker or a registered valuer, furnishes incorrect information in a report or certificate under any provisions of the Act or the rules made thereunder, the Assessing Officer or the Commissioner (Appeals) may direct him to pay a sum of ten thousand rupees for each such report or certificate by way of penalty.
It is further proposed to define the expressions “accountant”, “merchant banker” and “registered valuer“. It is also proposed to provide through amendment of Section 273B that if the person proves that there was reasonable cause for the failure referred to in the said section, then penalty shall not be imposable in respect of the proposed section 271J.
These amendments will take effect from 1st April, 2017.
[Clauses 86 & 87]
Extract of relevant clause from Finance Bill, 2017
Insertion of new section 271J.
86. After section 271-I of the Income-tax Act, the following section shall be inserted, namely:—
Penalty for furnishing incorrect information in reports or certificates.
‘271J. Without prejudice to the provisions of this Act, where the Assessing Officer or the Commissioner (Appeals), in the course of any proceedings under this Act, finds that an accountant or a merchant banker or a registered valuer has furnished incorrect information in any report or certificate furnished under any provision of this Act or the rules made thereunder, the Assessing Officer or the Commissioner (Appeals) may direct that such accountant or merchant banker or registered valuer, as the case may be, shall pay, by way of penalty, a sum of ten thousand rupees for each such report or certificate.
Explanation.––For the purposes of this section,—
(a) “accountant” means an accountant referred to in the Explanation below sub-section (2) of section 288;
(b) “merchant banker” means Category I merchant banker registered with the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992;
(c) “registered valuer” means a person defined in clause (oaa) of section 2 of the Wealth-tax Act, 1957.’.
Amendment of section 273B.
87. In section 273B of the Income-tax Act, after the word, figures and letter “section 271-I,”, the word, figures and letter “section 271J,” shall be inserted.