Article discusses Income Tax Penalties for Failure to deduct TDS / TCS in full and part, Quoting false TAN in challan/ statements, Failure to apply for TAN, Failure to furnish e TDS statement / TDS certificate, Failure to comply with department letter, Failure to furnish information required u/s. 133B, Failure to apply for PAN / TCN, Failure to keep and maintain information and documents u/s. 92D, Failure to furnish a report as required u/s. 92E, Failure to maintain books or documents u/s. 44AA, Failure to get accounts audited u/s. 44AB, Taking loan in contravention of Sec. 269SS, Repayment of loan in contravention of Sec. 269T, Failure to furnish Return of Income, On Undisclosed income found during search intimation u/s 132, Failure to comply with the notice u/S 115WD(2)/ 115WE(2)/ 143(1)/ 142(2), Failure to comply with direction u/s 142(2A) to get audited , Failure to answer questions or sign statements, Non Payment of Tax including Self Assessment Tax.
Given below is the chart which shows Section Under Which Penalty can be imposed, Nature of Default and Quantum of penalty.
PENALTIES [AY 2017-18]
However, if under-reported income is in consequence of any misreporting thereof by any person, the penalty shall be equal to 200% of the amount of tax payable on under-reported income
Note:– However, the above penalty shall not be levied to and in relation to any assessment for the A.Y commencing on or after the 1st day of April, 2017.
Maximum : 300 per cent of tax sought to be evaded in addition to tax payable
‘Amount of tax sought to be evaded’ shall be aggregate of tax sought to be evaded under the general provisions and the tax sought to be evaded under the provisions of MAT or AMT. However, if an amount of concealed income is considered both under the general provisions and provisions of MAT or AMT, such amount shall not be considered in computing tax sought to be evaded under provisions of MAT or AMT. Further, where provisions of MAT or AMT are not applicable, the computation of tax sought to be evaded under the provisions of MAT or AMT shall be ignored.
Note:- However, the above penalty shall not be levied to and in relation to any assessment for the A.Y commencing on or after the 1st day of April, 2017.
“Specified sum” means any sum of money receivable, whether as advance or otherwise, in relation to transfer of an immovable property, whether or not the transfer takes place.
“Specified advance” means any sum of money in the nature of advance, by whatever name called, in relation to transfer of an immovable property, whether or not transfer takes place.
The provision requires that eligible investment fund shall furnish within 90 days from the end of the financial year a statement, in respect of its activities in a financial year, in the prescribed form containing information relating to fulfilment of specified conditions and such other information or documents as may be prescribed. Penalty to be levied if investment fund failed to comply with the requirement.
a) Shares or interest in a foreign company or entity derive substantial value, directly or indirectly, from assets located in India; and
b) Such foreign company or entity holds such assets in India through or in such Indian concern.
In this case, the Indian entity shall furnish the prescribed information for the purpose of determination of any income accruing or arising in India under Section 9(1)(i).
In case of any failure, the Indian concern shall be liable to pay penalty.
a) a sum equal to 2% of value of transaction in respect of which such failure has taken place, if such transaction had effect of, directly or indirectly, transferring right of management or control in relation to the Indian concern;
b) a sum of Rs. 5,000 in any other case.
(g) Failure to deliver or cause to be delivered a statement under Section 200(2A) or Section 206C(3A) within prescribed time.
With effect from June 1, 2015, it is mandatory for an office of the Government, paying TDS or TCS, as the case may be, without production of a challan, to deliver a statement in the prescribed form and manner to the prescribed authority.
Note : No penalty is imposable for any failure under sections 271(1)(b), 271A, 271AA, 271B, 271BA, 271BB, 271C, 271CA, 271D, 271E, 271F, 271FA, 271FAB, 271FB, 271G, 271GA, 271GB, 271H, 271-I, 272A(1)(c) or (d), 272A(2), 272AA(1), 272B, 272BB(1), 272BB(1A), 272BBB(1), 273(1)(b), 273(2)(b) and 273(2)(c) if the person or assessee proves that there was reasonable cause for such failure (section 273B).
Section 273AA provides that a person may make application to the Principal Commissioner/Commissioner for granting immunity from penalty, if (a) he has made an application for settlement under section 245C and the proceedings for settlement have abated; and (b) penalty proceeding have been initiated under this Act. The application shall not be made after the imposition of penalty after abatement.
1. With effect from assessment year 2015-16 “annual information return” has been changed to “statement of financial transaction or reportable account” and word “return” has been changed to “statement”.
2. With effect from assessment year 2015-16 a new section 271FAA has been inserted to provide for a penalty of Rs. 50,000 for furnishing inaccurate statement of financial transaction or reportable account in certain cases.
3. With effect from 1-10-2014 TPO can also levy penalty.
4. Section 271H as amended with effect from 1-10-2014 provides that penalty shall be levied by Assessing Officer.