Section 271AA – Penalty for failure to keep / maintain information and documents in respect of an international or specified domestic transaction

Provisions of section 92D of the Income Tax Act, 1961 mandates the following categories of persons to maintain and keep specified information and documents –

  • The person who has entered into an international transaction (term defined under section 92B); or
  • The person who has entered into a specified domestic transaction (term defined under section 92BA).

In case the person fails, to maintain and keep such specified information and documents, he shall be liable to pay the penalty under section 271AA of the Income Tax Act. The penalty provisions of section 271AA are explained in the present article.

Penality

Coverage of provisions of section 271AA of the Income Tax Act

The penalty under provisions of section 271AA is leviable under the following situations –

1. The person (entering into an international transaction / a specified domestic transaction) fails to keep / maintain information and documents as required under section 92D (1) or section 92D (2) of the Income Tax Act.

2. The person (entering into an international transaction / a specified domestic transaction) fails to report the said transaction.

3. The person (entering into an international transaction / a specified domestic transaction) maintains incorrect information / documents or furnishes incorrect information / documents.

4. The person (entering into an international transaction / a specified domestic transaction) fails to furnish the information and documents as required under section 92D (4) of the Income Tax Act.

Amount of penalty under section 271AA of the Income Tax Act

The amount of penalty leviable under section 271AA is tabulated hereunder –

Type of Default Directing authority Amount of penalty
Failure to maintain and keep any information and documents as required under section 92D (1) or section 92D (2). The Assessing Officer of the Commissioner (Appeals) An amount equal to 2% of the value of each international or specified domestic transaction.
Failure to report the international or a specified domestic transaction The Assessing Officer of the Commissioner (Appeals) An amount equal to 2% of the value of each international or specified domestic transaction.
Furnishing or maintaining of an incorrect information / document The Assessing Officer of the Commissioner (Appeals) An amount equal to 2% of the value of each international or specified domestic transaction.
Failure to furnish the information and document as required under section 92D (4) Authority prescribed under section 286 (1) INR 5,00,000

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One Comment

  1. R P Kapo r I ITORetd says:

    My querry is Can ITO levy penalty under section 271 A for for estimated addition made in low household withdrawls and also for estimated addition made for car petrol expenses for personal use If not please quote case law RAJ

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