Article discusses Income Tax Penalties for Failure to deduct TDS / TCS in full and part, Quoting false TAN in challan/ statements, Failure to apply for TAN, Failure to furnish e TDS statement / TDS certificate, Failure to comply with department letter, Failure to furnish information required u/s. 133B, Failure to apply for PAN / TCN, Failure to keep and maintain information and documents u/s. 92D, Failure to furnish a report as required u/s. 92E, Failure to maintain books or documents u/s. 44AA, Failure to get accounts audited u/s. 44AB, Taking loan in contravention of Sec. 269SS, Repayment of loan in contravention of Sec. 269T, Failure to furnish Return of Income, On Undisclosed income found during search intimation u/s 132, Failure to comply with the notice u/S 115WD(2)/ 115WE(2)/ 143(1)/ 142(2), Failure to comply with direction u/s 142(2A) to get audited , Failure to answer questions or sign statements, Non Payment of Tax including Self Assessment Tax.
Given below is the chart which shows Section Under Which Penalty can be imposed, Nature of Default and Quantum of penalty.
|Section||Nature of default||Penalty leviable|
|140A(3)||Failure to pay wholly or partly—||Such amount as Assessing Officer may impose but not exceeding tax in arrears|
|(a) self-assessment tax/fringe benefit tax, or|
|(b) interest, and fee, or|
|under section 140A(1)|
|158BFA(2)||Determination of undisclosed income of block period||Minimum : 100 per cent of tax leviable in respect of undisclosed income|
|Maximum : 300 per cent of tax leviable in respect of undisclosed income.|
|221(1)||Default in making payment of tax||Such amount as Assessing Officer may impose but not exceeding amount of tax in arrears|
|234E||Failure to file statement within time prescribed insection 200(3) or in proviso to section 206C(3)||Rs. 200 for every day during which failure continues but not exceeding tax deductible/collectible|
|234F||Default in furnishing return of income within time as prescribed under section 139(1)||a) Rs. 5000 if return is furnished on or before 31 December of assessment year.
b) Rs. 10,000 in any other case
Note: if total income of the person does not exceeds Rs. 5 lakh then fee payable shall be Rs. 1000
|270A(1)||Under-reporting and misreporting of income||A sum equal to 50% of the amount of tax payable on under-reported income.
However, if under-reported income is in consequence of any misreporting thereof by any person, the penalty shall be equal to 200% of the amount of tax payable on under-reported income
|271(1)(b)||Failure to comply with a notice under section 115WD(2)/115WE(2) / 142(1) or section 143(2) or failure to comply with a direction under section 142(2A)||Fixed at Rs. 10,000 for each failure
Note:– However, the above penalty shall not be levied to and in relation to any assessment for the A.Y commencing on or after the 1st day of April, 2017.
|271(1)(c)||Concealment of particulars of income or fringe benefits or furnishing of inaccurate particulars of income or fringe benefits||Minimum : 100 per cent Maximum : 300 per cent of tax sought to be evaded in addition to tax payable
‘Amount of tax sought to be evaded’ shall be aggregate of tax sought to be evaded under the general provisions and the tax sought to be evaded under the provisions of MAT or AMT. However, if an amount of concealed income is considered both under the general provisions and provisions of MAT or AMT, such amount shall not be considered in computing tax sought to be evaded under provisions of MAT or AMT. Further, where provisions of MAT or AMT are not applicable, the computation of tax sought to be evaded under the provisions of MAT or AMT shall be ignored.
Note:– However, the above penalty shall not be levied to and in relation to any assessment for the A.Y commencing on or after the 1st day of April, 2017.
|271(4)||Distribution of profits by registered firm otherwise than in accordance with partnership deed and as a result of which partner has returned income below the real income||Not exceeding 150 per cent of difference between tax on partner’s income assessed and tax on income returned, in addition to tax payable Note:- However, the above penalty shall not be levied to and in relation to any assessment for the A.Y commencing on or after the 1st day of April, 2017.|
|271A||Failure to keep, maintain, or retain books of account, documents, etc., as required under section 44AA||Rs. 25,000|
|271AA(1)||(1) Failure to keep and maintain information and documents required by section 92D(1) or 92D(2)||2% of value of each international transaction/or specified domestic transaction entered into|
|(2) Failure to report such transaction|
|(3) Maintaining or furnishing incorrect information or document|
|271AA(2)||Failure to furnish information and document as required under Section 92D(4)||Rs. 5,00,000/-|
|271AAA||Where search has been initiated before 1-7-2012 and undisclosed income found||10% of undisclosed income|
|271AAB(1)||Where search has been initiated on or after 1-7-2012 but before 15-12-2016 and undisclosed income found||(a) 10% of undisclosed income of the specified previous year if assessee admits the undisclosed income; substantiates the manner in which it was derived; and on or before the specified date pays the tax, together with interest thereon and furnishes the return of income for the specified previous year declaring such undisclosed income|
|(b) 20% of undisclosed income of the specified previous year if assessee does not admit the undisclosed income, and on or before the specified date declare such income in the return of income furnished for the specified previous year and pays the tax, together with interest thereon;|
|(c) 60% of undisclosed income of the specified previous year if it is not covered by (a) or (b) above|
|271AAB(1A)||Where search has been initiated on or after 15-12-2016 and undisclosed income found||(a) 30% of undisclosed income of the specified previous year if assessee admits the undisclosed income; substantiates the manner in which it was derived; and on or before the specified date pays the tax, together with interest thereon and furnishes the return of income for the specified previous year declaring such undisclosed income
(b) 60% of undisclosed income of the specified previous year in any other case.
|271AAC||Income determined by Assessing Officer includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D for any previous year. [if such income is not included by assessee in his return or tax in accordance with section 115BBE has not been paid]||10% of tax payable under section 115BBE.|
|271B||Failure to get accounts audited or furnish a report of audit as required under section 44AB||One-half per cent of total sales, turnover or gross receipts, etc., or Rs. 1,50,000, which-ever is less|
|271BA||Failure to furnish a report from an accountant as required by section 92E||Rs. 1,00,000|
|271BB||Failure to subscribe any amount to units issued under scheme referred to in section 88A(1)||20 per cent of such amount|
|271C||Failure to deduct tax at source, wholly or partly, undersections 192 to 196D (Chapter XVII-B) or failure to pay wholly or partly tax u/s 115-O(2) or second proviso to section 194B||Amount equal to tax not deducted or paid|
|271CA||Failure to collect tax at source as required under Chapter XVII-BB||Amount equal to tax not collected|
|271D||Taking or accepting any loan or deposit or specified sum in contravention of the provisions of Section 269SS.
“Specified sum” means any sum of money receivable, whether as advance or otherwise, in relation to transfer of an immovable property, whether or not the transfer takes place.
|Amount equal to loan or deposit or specified sum so taken or accepted|
|271DA||Receipt of an amount of Rs. 2 lakh or more in contravention of provisions of Section 269ST.||Amount equal to such receipt|
|271E||Repayment of any loan or deposit or specified advance otherwise than in accordance with provision of Section 269T.
“Specified advance” means any sum of money in the nature of advance, by whatever name called, in relation to transfer of an immovable property, whether or not transfer takes place.
|Amount equal to loan or deposit or specified advance so repaid|
|271F||Failure to furnish return as required by section 139(1)or by its provisos before the end of the relevant assessment year||Rs. 5,000
Note: Applicable upto the Assessment year 2017-18
|271FA1||Failure to furnish an annual information return as required under section 285BA(1)2||Rs. 500 per day of default|
|Failure to furnish annual information return within the period specified in notice u/s 285BA(5)||Rs. 1,000 per day of default|
|271FAB||Section 9A provides that fund management activity carried out by an eligible offshore investment fund through an eligible fund manager acting on behalf of such fund shall not constitute business connection in India (subject to certain conditions).
The provision requires that eligible investment fund shall furnish within 90 days from the end of the financial year a statement, in respect of its activities in a financial year, in the prescribed form containing information relating to fulfilment of specified conditions and such other information or documents as may be prescribed. Penalty to be levied if investment fund failed to comply with the requirement.
|271FB||Failure by an employer to furnish the return of fringe benefits as required under section 115WD(1)||Rs. 100 for every day of default|
|271G3||Failure to furnish any information or document as required by section 92D(3)||2% of the value of the international transaction/specified domestic transaction for each failure|
|271GA||Section 285A provides for reporting by an Indian concern if following two conditions are satisfied:
a) Shares or interest in a foreign company or entity derive substantial value, directly or indirectly, from assets located in India; and
b) Such foreign company or entity holds such assets in India through or in such Indian concern.
In this case, the Indian entity shall furnish the prescribed information for the purpose of determination of any income accruing or arising in India under Section 9(1)(i).
In case of any failure, the Indian concern shall be liable to pay penalty.
|Penalty shall be:
a) a sum equal to 2% of value of transaction in respect of which such failure has taken place, if such transaction had effect of, directly or indirectly, transferring right of management or control in relation to the Indian concern;
b) a sum of Rs. 5,000 in any other case.
|271GB(1)||Failure to furnish report under section 286(2)||Rs. 5,000 per day upto 30 days and Rs. 15,000 per day beyond 30 days|
|271GB(2)||Failure to produce the information and documents within the period allowed under section 271GB(6)||Rs. 5,000 for every day during which the failure continues.|
|271GB(3)||Failure to furnish report or failure to produce information/documents under section 286 even after serving order under section 271GB(1) or 271GB(2)||Rs. 50,000 for every day for which such failure continues beginning from the date of serving such order.|
|271GB(4)||Failure to inform about inaccuracy in report furnish under section 286(2)||Rs. 5,00,000|
|Or furnishing of inaccurate information or document in response to notice issued under section 286(6).|
|271H4||Failure to deliver/cause to be delivered a statement within the time prescribed in section 200(3) or the proviso to section 206C(3), or furnishes incorrect information in the statement||W.e.f. 1-10-2014 Assessing Officer may direct payment of penalty. Penalty shall not be less than Rs. 10,000 but may extend to Rs. 1,00,000|
|271-I||As per section 195(6) of the Act, any person responsible for paying to a non-resident or to a foreign company, any sum (whether or not chargeable to tax), shall furnish the information relating to such payment in Form 15CA and 15CB. Penalty shall be levied in case of any failure.||Rs. 1,00,000|
|271J||Furnishing of incorrect information in any report or certificate by an accountant or a merchant banker or a registered valuer||Rs. 10,000 for each incorrect report or certificate|
|272A(1)||Refusal or failure to :||Rs. 10,000 for each failure/default|
|(a) answer questions|
|(b) sign statement|
|(c) attend to give evidence or produce books of account, etc., in compliance with summons under section 131(1)|
|(d) comply with notices u/s 142(1) / 143(2) or failure to comply with direction issued u/s 142(2A).|
|272A(2)||Failure to :|
|(a) furnish requisite information in respect of securities as required under section 94(6) ;||Rs. 10,000 for each failure/default. (In respect of penalty for failure, in relation to a declaration mentioned in section 197A, a certificate as required by section 203 and returns u/ss 206 and 206C and statements under Section 200(2A) orsection 200(3) or proviso to section 206C(3) or section 206C(3A), penalty shall not exceed amount of tax deductible or collectible)|
|(b) give notice of discontinuance of business or profession as required under section 176(3) ;|
|(c) furnish in due time returns, statements or certificates, deliver de-claration, allow inspection, etc., under sections 133, 134, 139(4A), 139(4C),192(2C), 197A, 203, 206, 206C, 206C(1A) and285B;|
|(d) deduct and pay tax under section 226(2)|
|(e) file a copy of the prescribed statement within the time specified in section 200(3) or the proviso tosection 206C(3) (up to 1-7-2012)|
|(f) file the prescribed statement within the time specified in section 206A(1)
(g) Failure to deliver or cause to be delivered a statement under Section 200(2A) or Section 206C(3A) within prescribed time.
With effect from June 1, 2015, it is mandatory for an office of the Government, paying TDS or TCS, as the case may be, without production of a challan, to deliver a statement in the prescribed form and manner to the prescribed authority.
|272AA(1)||Failure to comply with section 133B||Not exceeding Rs. 1,000|
|272B||Failure to comply with provisions of section 139A/139A(5)(c)/(5A)/(5C)||Rs. 10,000|
|272BB(1)||Failure to comply with section 203A||Rs. 10,000 for each failure/default|
|272BB(1A)||Quoting false tax deduction account number/tax collection account number/tax deduction and collection account number in challans/certificates/statements/documents referred to in section 203A(2)||Rs. 10,000|
Note : No penalty is imposable for any failure under sections 271(1)(b), 271A, 271AA, 271B, 271BA, 271BB, 271C, 271CA, 271D, 271E, 271F, 271FA,271FAB, 271FB, 271G, 271GA, 271GB, 271H, 271-I, 272A(1)(c) or (d), 272A(2), 272AA(1), 272B, 272BB(1), 272BB(1A), 272BBB(1), 273(1)(b), 273(2)(b) and 273(2)(c) if the person or assessee proves that there was reasonable cause for such failure (section 273B).
Section 273AA provides that a person may make application to the Principal Commissioner/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; and (b) penalty proceeding have been initiated under this Act. The application shall not be made after the imposition of penalty after abatement.
1. With effect from assessment year 2015-16 “annual information return” has been changed to “statement of financial transaction or reportable account” and word “return” has been changed to “statement”.
2. With effect from assessment year 2015-16 a new section 271FAA has been inserted to provide for a penalty of Rs. 50,000 for furnishing inaccurate statement of financial transaction or reportable account in certain cases.
3. With effect from 1-10-2014 TPO can also levy penalty.
4. Section 271H as amended with effect from 1-10-2014 provides that penalty shall be levied by Assessing Officer.