Income-tax Act,1961
Act No : 43
Section :
Failure to furnish returns, comply with notices, concealment of income, etc . 2
[271. Failure to furnish returns, comply with notices, concealment of income, etc . 2 (1)If the 3[Assessing] Officer or the 4 [Deputy Commissioner (Appeals)] 5[or the Commissioner (Appeals)] in the course of any proceedings under this Act, is satisfied that any person- 6[(a) Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.] (b) has 7[* * *] failed to comply with a notice under sub- section (1) of section 142 or sub-section (2) of section 143 8[or fails to comply with a direction issued under sub- section (2A) of section 142], or (c) has concealed the particulars of his income or 9[ * * * ] furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty,- ---------------------------------------------------------------------- 1 Prior to the omission, section 270, as amended by the Taxation Laws (Amendment & Miscellaneous Provisions) Act,. 1986, w.e.f. 10-9- 1986, read as under: "270. Failure to furnish information regarding securities, etc.- If any person fails to comply with a notice issued under sub-section (6) of section 94, the Assessing Officer may direct that such person shall pay by way of penalty a sum not exceeding five hundred rupees and by way of further penalty a like amount for every day after the infliction of such penalty during which the failure continues." 3 Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 4 Substituted for "Appellate Assistant Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 5 Inserted by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978. 6 Prior to the omission, clause (a), as amended by the Finance Act, 1963, w.e.f. 28-4-1963 and Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986, read as under: "(a) has failed to furnish the return of total income which he was required to furnish under sub-section (1) of section 139 or by notice given under subsection (2) of section 139 or section 148 or has failed to furnish it within the time allowed and in the manner required by sub-section (1) of section 139 or by such notice as the case may be, or" 7 The words ", without reasonable cause," omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9- 1986. 8 Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4- 1976. 9 The word 'deliberately" omitted by the Finance Act, 1964, w.e.f. 1-4-1964. ----------------------------------------------------------------------- 1.767 1[(i) Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.] 2[(ii) in the cases referred to in clause (b), in addition to any tax payable by him, a sum which shall not be less than one thousand rupees but which may extend to twenty- five thousand rupees for each such failure;] 3[(iii) in the cases referred to in clause (c), in addition to any tax payable by him, a sum which shall not be less than, but which shall not exceed 4 [three times] the amount of tax sought to be evaded by reason of the concealment of particulars of his income or the furnishing of inaccurate particulars of such income. 5[Omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.] 6 [Explanation 1.-Where in respect of any facts material to the computation of the total income of any person under this Act,- (A) such person fails to offer an explanation or offers an explanation ----------------------------------------------------------------------- 1 Prior to the omission, clause (i), as substituted by the Direct Taxes (Amendment) Act, 1974, w.r.e.f. 1-4-1962 and Taxation Laws (Amendment) Act, 1975, w.e.f 1-4-1976, read as under: "(i) in the cases referred to in clause (a),- (a) in the case of a person referred to in sub-section (4A) of section 139, where the total income in respect of which he is assessable as a representative assessee does not exceed the maximum amount which is not chargeable to income-tax, a sum not exceeding one per cent of the total income computed under this Act without giving effect to the provisions of sections 11 and 12, for each year or part thereof during which the default continued; (b) in any other case, in addition to the amount of the tax, if any, payable by him, a sum (equal to two per cent of the assessed tax for every month during which the default continued. Explanation.-In this clause "assessed tax" means tax as reduced by the sum, if any, deducted at source under Chapter XVIIB or paid in advance under Chapter XVIIC;" 2 Substituted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Prior to the substitution, clause (ii) read as under: "(ii) in the cases referred to in clause (b), in addition to any tax payable by him, a sum which shall not be less than ten per cent but which shall not exceed fifty per cent of the amount of the tax, if any, which would have been avoided if the income returned by such person had been accepted as the correct income". 3 Substituted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1- 4-1976. Earlier, clause (iii) was substituted by the Finance Act, 1968, w.e.f. 1-4-1968. 4 Substituted for "twice" by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. 5 Prior to the omission, the proviso read as under: "Provided that, if in a case falling under clause (c), the amount of income (as determined by the Assessing Officer on assessment) in respect of which the particulars have been concealed or inaccurate particulars have been furnished exceeds a sum of twenty-five thousand rupees, the Assessing Officer shall not issue any direction for payment by way of penalty without the previous approval of the Deputy Commissioner." 6 Substituted for Explanation by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976. Earlier, the Explanation was inserted by the Finance Act, 1964, w.e.f. 1-4-1964. ---------------------------------------------------------------------- 1.768 which is found by the 1[Assessing] Officer or the 2[Deputy Commissioner (Appeals)] 3[or the Commissioner (Appeals)] to be false, or (B) such person offers an explanation which is not able to substantiate 4 [and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him], then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed. 5[Omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f 10-9-1986.] Explanation 2.-Where the source of any receipt, deposit, outgoing or investment in any assessment year is claimed by any person to be an amount which had been added in computing the income or deducted in computing the loss in the assessment of such person for any earlier assessment year or years but in respect of which no penalty under clause (iii) of this sub-section had been levied, that part of the amount so added or deducted in such earlier assessment year immediately preceding the year in which the receipt, deposit, outgoing or investment appears (such earlier assessment year hereafter in this Explanation referred to as the first preceding year) which is sufficient to cover the amount represented by such receipt, deposit or outgoing or value of such investment (such amount or value hereafter in this Explanation referred to as the utilised amount) shall be treated as the income of the assessee, particulars of which had been concealed or inaccurate particulars of which had been furnished for the first preceding year; and where the amount so added or deducted in the first preceding year is not sufficient to cover the utilised amount, that part of the amount so added or deducted in the year immediately preceding the first preceding year which is sufficient to cover such part of the utilised amount as is not so covered shall be treated to be the income of the assessee, particulars of which had been concealed or inaccurate particulars of which had been furnished for the year immediately preceding the first preceding year and so on, until the entire utilised amount is covered by the amount so added or deducted in such earlier assessment years. ---------------------------------------------------------------------- 1 Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 2 Substituted for 'Appellate Assistant Commissioner' by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 3 Inserted by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978. 4 Inserted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986. 5 Prior to the omission, the proviso read as under: 'Provided that nothing contained in this Explanation shall apply to a case referred to in clause (B) in respect of any amount added or disallowed as a result of the rejection of any explanation offered by such per-son, if such explanation is bona fide and all the facts relating to the same and material to the computation of his total income have been disclosed by him.' ----------------------------------------------------------------------- 1.769 1[Explanation 3.-Where any person who has not previously been assessed under this Act, fails, without reasonable cause, to furnish within the period specified in sub-section (1) of section 153 a return of his income which he is required to furnish under section 139 in respect of any assessment year commencing on or after the 1st day of April, 1989, and until the expiry of the period aforesaid, no notice has been issued to him under clause (i) of sub-section (1) of section 142 or section 148 and the Assessing Officer or the Deputy Commissioner (Appeals) or the Commissioner (Appeals) is satisfied that in respect of such assessment year such person has taxable income, then, such person shall, for the purposes of clause (c) of this sub- section, be deemed to have concealed the particulars of his income in respect of such assessment year, notwithstanding that such person furnishes a return of his income at any time after the expiry of the period aforesaid in pursuance of a notice under section 148.] Explanation 4.-For the purposes of clause (iii) of this sub- section, the expression "the amount of tax sought to be evaded",- (a) in any case where the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished exceeds the total income assessed, means the tax that would have been chargeable on the income in respect of which particulars have been concealed or inaccurate particulars have been furnished had such income been the total income; (b) in any case to which Explanation 3 applies, means the tax on the total income assessed; (c) in any other case, means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished. 1[Explanation 5.-Where in the course of a search under section 132, the assessee is found to be the owner of any money, bullion, jewellers or other valuable article or thing (hereafter in this Explanation referred to ---------------------------------------------------------------------- 1 Substituted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Prior to the substitution, Explanation 3, as amended by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978, read as under: "Explanation 3.-Where any person who has not previously been assessed under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act, fails, without reasonable cause, to furnish within the period specified in sub-clause (iii) of clause (a) of subsection (1) of section 153 a return of his income which he is required to furnish under section 139 in respect of any assessment year commencing on or after the first day of April, 1974, and, until the expiry of the period aforesaid, no notice has been issued to him under sub-section (2) of section 139 or section 148 and the Assessing Officer or the Deputy Commissioner (Appeals) or the Commissioner (Appeals) is satisfied that in respect of such assessment year such person has taxable income, then, such person shall, for the purposes of clause (c) of this sub-section, be deemed to have concealed the particulars of his income in respect of such assessment year, notwithstanding that such person furnishes a return of his income at any time after the expiry of the period aforesaid in pursuance of a notice under section 148." 2 Inserted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10- 1984. ---------------------------------------------------------------------- 1.770 as assets) and the assessee claims that such assets have been acquired by him by utilising (wholly or in part) his income,- (a) for any previous year which has ended before the date of the search, but the return of income for such year has not been furnished before the said date or, where such return has been furnished before the said date, such income has not been declared therein; or (b) for any previous year which is to end on or after the date of the search, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of the search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income, 1[unless,- (1) such income is, or the transactions resulting in such income are recorded,- (i) in a case falling under clause (a), before the date of the search; and (ii) in a case falling under clause (b), on or before such date, in the books of account, if any, maintained by him for any source of income or such income is otherwise disclosed to the 2[Chief Commissioner or Commissioner] before the said date; or (2) he, in the course of the search, makes a statement under subsection (4) of section 132 that any money, bullion, jewellery or other valuable article or thing found in his possession or under his control, has been acquired out of his income which has not been disclosed so far in his return of income to be furnished before the expiry of time specified in 3[* * *] sub-section (1), of section 139, and also specifies in the statement the manner-in which such income has been derived and pays the tax, together with interest, if any, in respect of such income.] 4 [Explanation 6.-Where any adjustment is made in the income or loss declared in the return under the proviso to clause (a) of sub- section (1) of section 143 and additional tax charged under that section, the provisions of this sub-section shall not apply in relation to the adjustment so made.] ----------------------------------------------------------------------- 1 Substituted for "unless such income is, or the transactions resulting in such income are, recorded- (i) in a case falling under clause (a), before the date of the Search; and (ii) in a case falling under clause (b), on or before such date, in the books of account, if any, maintained by him for any source of income or such income is otherwise disclosed to the Commissioner before the said date." by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986 w.e.f. 10-9- 1986 2 Substituted for "Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 3 The words 'clause (a) or clause (b) of" omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. 4 Inserted, ibid. ------------------------------------------------------------------------ 1.771 1[(1A) Where any penalty is imposable by virtue of Explanation 2 to sub-section (1), proceedings for the imposition of such penalty may be initiated notwithstanding that any proceedings under this Act in the course of which such penalty proceedings could have been initiated under sub-section (1) have been completed. (2) When the person liable to penalty is a registered firm or an unregistered firm which has been assessed under clause (b) of section 183, then notwithstanding anything contained in the other provisions of this Act, the penalty imposable under sub-section (1) shall be the same amount as would be imposable on that firm if that firm were an unregistered firm. 2[(3) Omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f 1-4-1989.] (4) If the 3[Assessing] Officer or the 4 [Deputy Commissioner (Appeals)] 5[or the Commissioner (Appeals)] in the course of any proceedings under this Act, is satisfied that the profits of a registered firm have been distributed otherwise than in accordance With the shares of the partners as shown in the instrument of partnership on the basis of which the firm, has been registered under this Act, and that any partner has thereby returned his income below its real amount, he may direct that such partner shall, in addition to the tax, if any, payable by him, pay by way of penalty a sum not exceeding one and a half times the amount of tax which has been avoided, or would have been avoided if the income returned by such partner had been accepted as his correct income; and no refund or other adjustment shall be claimable by any other partner by reason of such direction.] ---------------------------------------------------------------------- 1 Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4- 1976. 2 Prior to the omission, sub-section (3), as amended by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976, read as under: "(3) Notwithstanding anything contained in this section,- (a) no penalty for failure to furnish the return of his total income under subsection (1) of section 139 shall be imposed under sub-section (1) on an assessee whose total income does not exceed the maximum amount not chargeable to tax in his case by one thousand five hundred rupees; (b) where a person has failed to comply with a notice under sub-section (2) of section 139 or section 148 and proves that he has no income liable to tax, the penalty imposable under sub-section (1) shall not exceed twenty- five rupees; (c) no penalty shall be imposed under sub-section (1) upon any person assessable under clause (i) of sub- section (1) of section 160, read with section 161, as the agent of a non-resident for failure to furnish the return under sub-section (1) of section 139; (d) the penalty imposed under clause (i) of sub- section (1) and the penalty imposed under clause (iii) of that sub-section, read with Explanation 3 thereto, shall not exceed in the aggregate twice the amount of the tax sought to be evaded: Provided that nothing contained in clause (a) or clause (b) shall apply to a case referred to in sub-clause (a) of clause (i) of sub- section (1)." 3 Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 4 Substituted for 'Appellate Assistant Commissioner", ibid. 5 Inserted by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978. ----------------------------------------------------------------------- 1.772 [(4A) and (4B) Omitted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10-1975. They were inserted by the Income-tax (Amendment) Act, 1965, w.e.f. 12-3-1965. Sub-section (4A) was substituted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4- 1971.] 1[(5) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1989 shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.] 2[271A. Failure to keep, maintain or retain books of account, documents, etc. Without prejudice to the provisions of section 271, if any person 3[* * *] fails to keep and maintain any such books of account and other documents as required by section 44AA or the rules made thereunder, in respect of any previous year or to retain such books of account and other documents for the period specified in the said rules, the 4 [Assessing] Officer or the 5[Deputy Commissioner (Appeals)] 6[or the Commissioner (Appeals)] may direct that such person shall pay, by way of penalty, 7 [a sum which shall not be less than two thousand rupees but which may extend to one hundred thousand rupees].] ---------------------------------------------------------------------- 1 Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4- 1989. 2 Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4- 1976. 3 The words ", without reasonable cause," omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f 10-9- 1986. 4 Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 5 Substituted for "Appellate Assistant Commissioner", ibid. 6 Inserted by the Finance (No. 2) Act, 1977, w.e.f 10-7-1978. 7 Substituted for "a sum which shall not be less than ten per cent but which shall not exceed fifty per cent of the amount of tax, if any, which would have been avoided if the income returned by such person had been accepted as the correct income" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. ------------------------------------------------------------------------ 1.773 1[271B. Failure to get accounts audited2 If any person fails 3[* * *] to get his accounts audited in respect of any previous year or years relevant to an assessment year or 4 [furnish a report of such audit as required under section 44AB], the 5[Assessing] Officer may direct that such person shall pay, by way of penalty, a sum equal to one half per cent of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such previous year or years or a sum of one hundred thousand rupees, whichever is less.] 6 [271BB. Failure to subscribe to the eligible issue of capital Whoever fails to subscribe any amount of subscription to the units issued under any scheme referred to in sub-section (1) of section 88A to the eligible issue of capital under that sub-section within the period of six months specified therein, may be directed by the Deputy Commissioner to pay, by way of penalty, a sum equal to twenty per cent of such amount.] 7[271C. Penalty for failure to deduct tax at source 8 9[(1)] If any person fails to deduct the whole or any part of the tax as required by or under the provisions of Chapter XVIIB, he shall be liable to pay, by way of penalty, a sum equal to the amount of the tax which he failed to deduct as aforesaid.] 10[(2) Any penalty imposable under sub-section (1) shall be imposed by the Deputy Commissioner.] 11[271D. Penalty for failure to comply with the provisions of section 269SS 12[(1) If a person takes or accepts any loan or deposit in ----------------------------------------------------------------------- 1 Inserted by the Finance Act, 1984, w.e.f. 1-4-1985. 3 The words ", without reasonable cause," omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9- 1986. 4 Substituted for 'obtain a report of such audit as required under section 44AB or furnish the said report along with the return of his income filed under sub-section (1) of section 139, or along with the return of income furnished in response to a notice under clause (i) of sub-section (1) of section 142" by the Finance Act, 1995, w.e.f. 1-7- 1995. The italicised words were inserted by the Finance Act' 1988, w.e.f. 1-4-1989. 5 Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 6 Inserted by the Finance Act, 1990, w.e.f. 1-4-1990. 7 Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. 9 Inserted by the Finance Act, 1990, w.e.f. 1-4-1990. 10 Ibid. 11 Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. 12 Inserted by the Finance Act, 1990, w.e.f. 1-4-1990. -------------------------------------------------------------------------- 1.774 contravention of the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit so taken or accepted.] 1[(2) Any penalty imposable under sub-section (1) shall be imposed by the Deputy Commissioner.], 2 [271E. Penalty for failure to comply with the provisions of section 269T 3[(1)] If a person repays any deposit referred to in section 269T otherwise than in accordance with the provisions of that section, he shall be liable to pay, by way of penalty, a sum equal to the amount of the deposit so repaid. 4[(2) Any penalty imposable under sub-section (1) shall be imposed by the Deputy Commissioner.]
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