Section 271J Penalty on professionals for furnishing incorrect information in reports / certificates
The penalty under section 271J of the Income Tax Act are levied on an accountant or a merchant banker or a registered valuer, in case the said professionals have provided incorrect information in any of the report or certificate. The provisions of the said section 271J is taken up and explained in the present article.
Understanding applicability of provisions of section 271J of Income Tax Act
The penalty provisions of section 271J are applicable in case any of the below professionals provide incorrect information in any report / certificate –
1. An accountant (a chartered accountant in practice);
2. Merchant Banker (merchant banker registered with the Securities and Exchange Board of India);
3. Registered Valuer (the person registered as a valuer under section 34AB of the Wealth Tax Act 1957).
Under Income Tax, the assessee needs to provide various reports or certificate which are to be authorized by the professionals like accountant / merchant banker / registered valuer. In case any of the above mentioned professionals provides incorrect information (whether with malafide intention or not) in any of the report or certificate, the defaulter would be liable to pay the penalty under section 271J of the Income Tax Act.
Amount of penalty payable under section 271J
In case an accountant / a merchant banker / a registered valuer provides incorrect information in any report / certificate, then the Assessing Officer or the Commissioner (Appeals) may direct the defaulter to pay the penalty amounting to INR 10,000 for each such report / certificate under section 271J of the Income Tax Act.
No penalty under Section 271J in case of a reasonable cause
Provisions of section 273B of the Income Tax Act states that in case the defaulter proves the reasonable cause of failure, then no penalty under section 271J of the Income Tax Act would be levied.
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