The penalty provisions of section 272AA of the Income Tax Act gets applicable only in case the person fails to comply with the provisions of section 133B of the Income Tax Act. The present article tries to explain provisions of section 272AA along with the connecting provisions of section 133B.
Understanding penalty provisions of section 272AA of the Income Tax Act
The provisions of section 272AA states as under –
- The provisions are applicable only in case the person fails to comply with the provisions of section 133B of the Income Tax Act.
- Before imposing a penalty under section 272AA, it is mandatory that the defaulter is given an appropriate opportunity of being heard.
Thus, in order to understand the penalty provisions of section 272AA, it is equally important to understand what the provisions of section 133B say, which is being explained here under.
Understanding connecting provisions of section 133B of Income Tax Act
The provisions of section 133B assigns powers to an Income Tax Authority to collect certain information. As per section 133B, in order to collect any information, the Income Tax Authority has the following powers –
- The authority can enter any building / place, within the limits of the area assigned, at which the business / profession is carried on.
- The authority can enter any building / place which is occupied by the person, in respect of which the authority exercises the jurisdiction.
- The authority may require any proprietor or an employee or any other person to furnish the required information.
Amount of penalty payable under section 272AA
In case of default in complying with the provisions of section 133B, the defaulter would be liable to pay the penalty equal to a sum which may extend to INR 1,000.
It is important to mention here that as per section 273B of the Income Tax Act, if the defaulter proves the reasonable cause of the failure, then no penalty can be levied under section 272AA.
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