We recently found below CBDT instruction on Social media on ‘Penalty u/s 271AAD for false entry etc. in the books of accounts’ but we are not able to verify this from official sources so readers are requested to please check from their own sources before relying on the below post.
F. No. 414/02/2021 — IT (Inv. I)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
Room No. 262, North Block,
New Delhi, the 11th January, 2021.
All the Directors General of Income Tax (Inv.)
All the Chief Commissioners of 11101111e its (Central)
Director General of Income Tax (18:1.1)
Subject: Penalty u/s 271AAD for false entry etc. in the books of accounts-reg-
Respected Sin(s)/ Madam(s).
Kind reference is invited to the above.
2. In this regard, I am directed to request that with effect from 1st April, 2020, section 271AAD has been inserted in the Income Tax Act, 1961. As per the provisions of this section, if during any proceeding under this Act. it is found that in the books of account maintained by any person there is a false entry, or an omission of any entry relevant for evading tax liability. the Assessing Officer may direct that such person shall pay, by way of penalty, a sum equal to the aggregate amount of such false or omitted entry. It is further provided that the Assessing Officer may also direct that any other person, who causes to make a false entry or omits or causes to omit any entry. shall pay by way of penalty a sum equal to the aggregate amount of such false or omitted entry.
3. The section further explains that “false entry” includes use or intention to use (a) forged or falsified documents such as a false invoice or. in general, a false piece of documentary evidence: or invoice in respect of supply or receipt of goods or services or both issued by the person or any other person without actual supply or receipt of such goods or services or both; or (c) invoice in respect of supply or receipt of goads or services or both to or from a person who does not exist.
4. In this context, it is requested that the provisions of the above-mentioned section may be invoked in all such cases, where the abovesaid provisions are attracted.
5. This issues with the approval of Member (Inv.). CBDT.
Under Secretary (Inv. I), CBDT
Phone: 011 23095464