CHAPTER XXI
PENALTIES
IMPOSABLE
Failure to furnish information regarding
securities, etc.
270. [Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.]
[Failure to furnish returns, comply with
notices, concealment of income, etc.
271. (1) If the [Assessing] Officer or the [***] [Commissioner (Appeals)] [or the Commissioner] in the course of any proceedings under this Act, is satisfied that any person—
(a) [* * *]
(b) has [* * *] failed to comply with a notice [under sub-section (2) of section 115WD or under sub-section (2) of section 115WE or] under sub-section (1) of section 142 or sub-section (2) of section 143 [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 [* * *] furnished inaccurate particulars of [such income, or]
[(d) has
concealed the particulars of the fringe benefits or furnished inaccurate
particulars of such fringe benefits,]
he may direct that such person shall pay by way of penalty,—
(i) [* * *]
[(ii) in the cases referred to in clause (b), [in addition to tax, if any, payable] by him, [a sum of ten thousand rupees] for each such failure ;]
[(iii) in the cases referred to in clause (c) [or clause (d)], [in addition to tax, if any, payable] by him, a sum which shall not be less than, but which shall not exceed [three times], the amount of tax sought to be evaded by reason of the concealment of particulars of his income [or fringe benefits] or the furnishing of inaccurate particulars of such income [or fringe benefits].
[* * *]
[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 which is found by the [Assessing] Officer or the [***] [Commissioner (Appeals)] [or the Commissioner] to be false, or
(B) such person offers an explanation which he is not able to substantiate [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.
[* * *]
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 amounts so added or deducted in such earlier assessment years.
[Explanation 3.—Where any person [***] 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 [***] 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 has the effect of reducing the loss declared in the return or converting that loss into income, 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 as reduced by the amount of advance tax, tax deducted at source, tax collected at source and self-assessment tax paid before the issue of notice under section 148];
(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.]
[Explanation 5.—Where in the course of a [search initiated under section 132 before the 1st day of June, 2007], the assessee is found to be the owner of any money, bullion, jewellery or other valuable article or thing (hereafter in this Explanation referred to 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, [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 [Chief Commissioner or Commissioner] before the said date ; or
(2) he, in the course of the search, makes a statement under sub-section (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 [* * *] 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.]
[Explanation
5A.—Where in the course of a search initiated under section 132 on or after
the 1st day of June, 2007, the assessee is found to
be the owner of,—
(i) any money,
bullion, jewellery or other valuable article or thing
(hereinafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him
by utilizing (wholly or in part) his income for any previous year; or
(ii) any income based on any entry in any books
of account or other documents or transactions and claims that such entry in the
books of account or other documents or transactions represents his income
(wholly or in part) for any previous year,
which has
ended before the date of the search and the due date for filing the return of
income for such year has expired and the assessee has
not filed the return, 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.]
[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.]
[Explanation 7.—Where in the case of an assessee who has entered into an international transaction defined in section 92B, any amount is added or disallowed in computing the total income under sub-section (4) of section 92C, then, the amount so added or disallowed 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 or inaccurate particulars have been furnished, unless the assessee proves to the satisfaction of the Assessing Officer or the Commissioner (Appeals) [or the Commissioner] that the price charged or paid in such transaction was computed in accordance with the provisions contained in section 92C and in the manner prescribed under that section, in good faith and with due diligence.]
[(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.
(3) [Omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.]
(4) If the [Assessing] Officer 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.]
(4A) and (4B) [Omitted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10-1975. Original sub-sections (4A) and (4B) were inserted by the Income-tax (Amendment) Act, 1965, w.e.f. 12-3-1965. Later on sub-section (4A) was substituted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971.]
[(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.]
[(6) Any reference in this section to the income shall be construed as a reference to the income or fringe benefits, as the case may be, and the provisions of this section shall, as far as may be, apply in relation to any assessment in respect of fringe benefits also.]
[Failure to keep, maintain or retain books
of account, documents, etc.
271A. Without prejudice to the provisions of section 271, if any person [***] 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 [Assessing] Officer or the [***] [Commissioner (Appeals)] may direct that such person shall pay, by way of penalty, [a sum of twenty-five thousand rupees].
271AA. Without prejudice to the provisions of section 271, if any person fails to keep and maintain any such information and document as required by sub-section (1) or sub-section (2) of section 92D, the Assessing Officer or Commissioner (Appeals) may direct that such person shall pay, by way of penalty, a sum equal to two per cent of the value of each international transaction entered into by such person.]
[Penalty where search has
been initiated.
271AAA.(1) The Assessing Officer may,
notwithstanding anything contained in any other provisions of this Act, direct
that, in a case where search has been initiated under section 132 on or after
the 1st day of June, 2007, the assessee shall pay by
way of penalty, in addition to tax, if any, payable by him, a sum computed at
the rate of ten per cent of the undisclosed income of the specified previous
year.
(2) Nothing
contained in sub-section (1) shall apply if the assessee,—
(i) in the course of
the search, in a statement under sub-section (4) of section 132, admits the
undisclosed income and specifies the manner in which such income has been
derived;
(ii) substantiates the manner in which the
undisclosed income was derived; and
(iii) pays the tax, together with interest, if
any, in respect of the undisclosed income.
(3) No
penalty under the provisions of clause (c) of sub-section (1) of
section 271 shall be imposed upon the assessee in
respect of the undisclosed income referred to in sub-section (1).
(4) The
provisions of sections 274 and 275 shall, so far as may be, apply in relation
to the penalty referred to in this section.
Explanation.—For
the purposes of this section,—
(a) “undisclosed income” means—
(i) any income of
the specified previous year represented, either wholly or partly, by any money,
bullion, jewellery or other valuable article or thing
or any entry in the books of account or other documents or transactions found
in the course of a search under section 132, which has—
(A) not been recorded on or before the date of search
in the books of account or other documents maintained in the normal course
relating to such previous year; or
(B) otherwise not been disclosed to the Chief
Commissioner or Commissioner before the date of the search; or
(ii) any income of the specified previous year
represented, either wholly or partly, by any entry in respect of an expense
recorded in the books of account or other documents maintained in the normal
course relating to the specified previous year which is found to be false and
would not have been found to be so had the search not been conducted;
(b) “specified previous year” means the
previous year—
(i) which has ended
before the date of search, but the date of filing the return of income under
sub-section (1) of section 139 for such year has not expired before the
date of search and the assessee has not furnished the
return of income for the previous year before the said date; or
(ii) in which search was conducted.]
[Failure to get accounts audited.
271B. If any person fails [***] to get his accounts audited in respect of any previous year or years relevant to an assessment year or [furnish a report of such audit as required under section 44AB], the [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.]
[Penalty for failure to furnish report under
section 92E.
271BA.If any person fails to furnish a report from an accountant as required by section 92E, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of one hundred thousand rupees.]
[Failure to subscribe to the eligible issue
of capital.
271BB. 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 [Joint] Commissioner to pay, by way of penalty, a sum equal to twenty per cent of such amount.]
[Penalty for failure to deduct tax at
source.
271C. [(1) If any person fails to—
(a) deduct the whole or any part of the tax as required by or under the provisions of Chapter XVII-B; or
(b) pay the whole or any part of the tax as required by or under—
(i) sub-section (2) of section 115-O; or
(ii) the second proviso to section 194B,
then, such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to deduct or pay as aforesaid.]
[(2) Any penalty imposable under sub-section (1) shall be imposed by the [Joint] Commissioner.]
[Penalty for failure to collect tax at
source.
271CA. (1) If any person fails to collect
the whole or any part of the tax as required by or under the provisions of
Chapter XVII-BB, then, such person shall be liable to pay, by way of penalty, a
sum equal to the amount of tax which such person failed to collect as
aforesaid.
(2) Any penalty imposable under sub-section (1)
shall be imposed by the Joint Commissioner.]
[Penalty for failure to comply with the
provisions of section 269SS.
271D. [(1)] If a person takes or accepts any loan or deposit in 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.]
[(2) Any penalty imposable under sub-section (1) shall be imposed by the [Joint] Commissioner.]
[Penalty for failure to comply with the
provisions of section 269T.
271E. [(1)] If a person repays any [loan or] 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 [loan or] deposit so repaid.]
[(2) Any penalty imposable under sub-section (1) shall be imposed by the [Joint] Commissioner.]
[Penalty for failure to furnish return of
income.
271F. If a person who is required to furnish a return of his income, as required under sub-section (1) of section 139 or by the provisos to that sub-section, fails to furnish such return before the end of the relevant assessment year, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of five thousand rupees.]
[Penalty for failure to furnish annual
information return.
271FA. If a person who is required to furnish an annual information return, as required under sub-section (1) of section 285BA, fails to furnish such return within the time prescribed under that sub-section, the income-tax authority prescribed under the said sub-section may direct that such person shall pay, by way of penalty, a sum of one hundred rupees for every day during which the failure continues.]
[Penalty for failure to furnish return of
fringe benefits.
271FB. If an employer, who is required to furnish a return of fringe benefits, as required under sub-section (1) of section 115WD, fails to furnish such return within the time prescribed under that sub-section, the Assessing Officer may direct that such employer shall pay, by way of penalty, a sum of one hundred rupees for every day during which the failure continues.]
[Penalty for failure to furnish information
or document under section 92D.
271G. If any person who has entered into an international transaction fails to furnish any such information or document as required by sub-section (3) of section 92D, the Assessing Officer or the Commissioner (Appeals) may direct that such person shall pay, by way of penalty, a sum equal to two per cent of the value of the international transaction for each such failure.]
Failure to give notice of discontinuance.
272. [Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.]
272A. (1) If any person,—
(a) being legally bound to state the truth of any matter touching the subject of his assessment, refuses to answer any question put to him by an income-tax authority in the exercise of its powers under this Act; or
(b) refuses to sign any statement made by him in the course of any proceedings under this Act, which an income-tax authority may legally require him to sign; or
(c) to whom a summons is issued under sub-section (1) of section 131 either to attend to give evidence or produce books of account or other documents at a certain place and time omits to attend or produce books of account or documents at the place or time,
(d) [***]
he shall pay, by way of penalty, [a sum of ten thousand rupees] for each such default or failure.
(2) If any person fails—
(a) to comply with a notice issued under sub-section (6) of section 94; or
(b) to give the notice of discontinuance of his business or profession as required by sub-section (3) of section 176; or
(c) to furnish in due time any of the returns, statements or particulars mentioned in section 133 or section 206 [***] [or section 206C] or section 285B; or
(d) to allow inspection of any register referred to in section 134 or of any entry in such register or to allow copies of such register or of any entry therein to be taken; or
[(e) to furnish the return of income which he is required to furnish under sub-section (4A) or sub-section (4C) of section 139 or to furnish it within the time allowed and in the manner required under those sub-sections; or]
(f) to deliver or cause to be delivered in due time a copy of the declaration mentioned in section 197A; or
(g) to furnish a certificate as required by section 203 [or section 206C]; or
(h) to deduct and pay tax as required by sub-section (2) of section 226;
[(i) to furnish a statement as required by sub-section (2C) of section 192;]
[(j) to deliver or cause to be delivered in due time a copy of the declaration referred to in sub-section (1A) of section 206C;]
[(k) to
deliver or cause to be delivered a copy of the statement within the time
specified in sub-section (3) of section 200 or the proviso to sub-section (3)
of section 206C;]
(l) to deliver or cause to be delivered the quarterly return within the time specified in sub-section (1) of section 206A,]
he shall pay, by way of penalty, a sum [of one hundred rupees] for every day during which the failure continues:
[Provided that the amount of penalty for failures in relation to [a declaration mentioned in section 197A, a certificate as required by section 203 and] returns under sections 206 and 206C [and statements under sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C] shall not exceed the amount of tax deductible or collectible, as the case may be.]
(3) Any penalty imposable under sub-section (1) or sub-section (2) shall be imposed—
(a) in a case where the contravention, failure or default in respect of which such penalty is imposable occurs in the course of any proceeding before an income-tax authority not lower in rank than a [Joint] Director or a [Joint] Commissioner, by such income-tax authority;
(b) in a case falling under clause (f) of sub-section (2), by the Chief Commissioner or Commissioner; and
(c) in any other case, by the [Joint] Director or the [Joint] Commissioner.
(4) No order under this section shall be passed by any income-tax authority referred to in sub-section (3) unless the person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter by such authority.
Explanation.—In this section, “income-tax authority” includes a Director General, Director, [Joint] Director and an Assistant Director [or Deputy Director] while exercising the powers vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect
of the matters specified in sub-section (1) of section 131.]
[Penalty for failure to comply with the
provisions of section 133B.
272AA. (1) If a person [***] fails to comply with the provisions of section 133B, he shall, on an order passed by the [Joint Commissioner], [Assistant Director] [or Deputy Director] or the [Assessing] Officer, as the case may be, pay, by way of penalty, a sum which may extend to one thousand rupees.
(2) No order under sub-section (1) shall be passed unless the person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter.
[Penalty for failure to comply with the
provisions of section 139A.
272B. (1) If a person fails to comply with the provisions of section 139A, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of ten thousand rupees.
(2) If a person who is required to quote his permanent account number in any document referred to in clause (c) of sub-section (5) of section 139A, or to intimate such number as required by sub-section (5A) [or sub-section (5C)] of that section, quotes or intimates a number which is false, and which he either knows or believes to be false or does not believe to be true, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of ten thousand rupees.
(3) No order under sub-section (1) or sub-section (2) shall be passed unless the person, on whom the penalty is proposed to be imposed, is given an opportunity of being heard in the matter.]
[Penalty for failure to comply with the
provisions of section 203A.
272BB. (1) If a person fails to comply with the provisions of section 203A, he shall, on an order passed by the [Assessing] Officer, pay, by way of penalty, [a sum of ten thousand rupees].
[(1A) If a
person who is required to quote his “tax deduction account number” or, as the
case may be, “tax collection account number” or “tax deduction and collection
account number” in the challans or certificates or
statements or other documents referred to in sub-section (2) of section 203A,
quotes a number which is false, and which he either knows or believes to be
false or does not believe to be true, the Assessing Officer may direct that
such person shall pay, by way of penalty, a sum of ten thousand rupees.]
(2) No order under sub-section (1) [or sub-section (1A)] shall be passed unless the person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter.]
[Penalty for failure to
comply with the provisions of section
206CA.
272BBB.(1) If a person fails to comply [before the 1st day of October, 2004] with the provisions of section 206CA, he shall, on an order passed by the Assessing Officer, pay, by way of penalty, a sum of ten thousand rupees.
(2) No order under sub-section (1) shall be passed unless the person on whom the penalty is proposed to be imposed, is given an opportunity of being heard in the matter.]
[False estimate of, or failure to pay,
advance tax.
273.[(1) If the [Assessing] Officer, in the course of any proceedings in connection with the regular assessment for any assessment year, is satisfied that any assessee—
(a) has furnished under clause (a) of sub-section (1) of section 209A a statement of the advance tax payable by him which he knew or had reason to believe to be untrue, or
(b) has [***] failed to furnish a statement of the advance tax payable by him in accordance with the provisions of clause (a) of sub-section (1) of section 209A,
he may direct that such person shall, in addition to the amount of tax, if any, payable by him, pay by way of penalty a sum—
(i) which, in the case referred to in clause (a), shall not be less than ten per cent but shall not exceed one and a half times the amount by which the tax actually paid during the financial year immediately preceding the assessment year under the provisions of Chapter XVII-C falls short of—
(1) seventy-five per cent of the assessed tax as defined in sub-section (5) of section 215, or
(2) the amount which would have been payable by way of advance tax if the assessee had furnished a correct and complete statement in accordance with the provisions of clause (a) of sub-section (1) of section 209A,
whichever is less;
(ii) which, in the case referred to in clause (b), shall not be less than ten per cent but shall not exceed one and a half times of seventy-five per cent of the assessed tax as defined in sub-section (5) of section 215]:
[Provided that in the case of an assessee, being a company, the provisions of this sub-section shall have effect as if for the words “seventy-five per cent”, at both the places where they occur, the words “eighty-three and one-third per cent” had been substituted.]
[(2)] If the [Assessing] Officer, in the course of any proceedings in connection with the regular assessment for the assessment year commencing on the 1st day of April, 1970, or any subsequent assessment year, is satisfied that any assessee—
[(a) has furnished under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (5) of section 209A, or under sub-section (1) or sub-section (2) of section 212, an estimate of the advance tax payable by him which he knew or had reason to believe to be untrue, or]
[(aa) has furnished [under sub-section (4) of section 209A or] under sub-section (3A) of section 212 an estimate of the advance tax payable by him which he knew or had reason to believe to be untrue, or]
(b) has [***] failed to furnish an estimate of the advance tax payable by him in accordance with the provisions of [clause (b) of sub-section (1) of section 209A], or
(c) has [***] failed to furnish an estimate of the advance tax payable by him in accordance with the provisions of [sub-section (4) of section 209A or] sub-section (3A) of section 212,
he may direct that such person shall, in addition to the amount of tax, if any, payable by him, pay by way of penalty a sum—
(i) which, in the case referred to in clause (a), shall not be less than ten per cent but shall not exceed one and a half times the amount by which the tax actually paid during the financial year immediately preceding the assessment year under the provisions of Chapter XVII-C falls short of—
(1) seventy-five per cent of the assessed tax as defined in sub-section (5) of section 215, or
[(2) where a statement under clause (a) of sub-section (1) of section 209A was furnished by the assessee or where a notice under section 210 was issued to the assessee, the amount payable under such statement or, as the case may be, such notice,]
whichever is less;
[(ia) which, in the case referred to in clause (aa), shall not be less than ten per cent but shall not exceed one and a half times the amount by which the tax actually paid during the financial year immediately preceding the assessment year under the provisions of Chapter XVII-C falls short of seventy-five per cent of the assessed tax as defined in sub-section (5) of section 215;]
(ii) which, in the case referred to in clause (b), shall not be less than ten per cent but shall not exceed one and a half times of seventy-five per cent of the assessed tax as defined in sub-section (5) of section 215; and
[(iii) which, in the case referred to in clause (c), shall not be less than ten per cent but shall not exceed one and a half times the amount by which—
(a) where the assessee has sent a statement under clause (a), or an estimate under clause (b) of sub-section (1) of section 209A, or an estimate in lieu of a statement under sub-section (2) of that section, the tax payable in accordance with such statement or estimate; or
(b) where the assessee was required to pay advance tax in accordance with the notice issued to him under section 210, the tax payable under such notice,
falls short of seventy-five per cent of the assessed tax as defined in sub-section (5) of section 215:]]
[Provided that in the case of an assessee, being a company, the provisions of this sub-section shall have effect as if for the words “seventy-five per cent”, wherever they occur, the words “eighty-three and one-third per cent” had been substituted.]
[Explanation [1].—For the purposes of clause (ia), the amount paid by the assessee on or before the date extended by the [Chief Commissioner or Commissioner] under the [first] [proviso to sub-section (4) of section 209A or, as the case may be,] [first] proviso to sub-section (3A) of section 212 shall, where the date so extended falls beyond the financial year immediately preceding the assessment year, also be regarded as tax actually paid during that financial year.]
[Explanation 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 this section shall be the same amount as would be imposable on that firm if that firm were an unregistered firm.]
[(3) The provisions of this section 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.]
[Power to reduce or waive penalty, etc., in
certain cases.
273A.(1) Notwithstanding anything contained in this Act, the [[***] Commissioner] may, in his discretion, whether on his own motion or otherwise,—
(i) [***]
(ii) reduce or waive the amount of penalty imposed or imposable on a person under clause (iii) of sub-section (1) of section 271; [or]
(iii) [***]
if he is satisfied that such person—
(a) [***]
(b) in the case referred to in clause (ii), has, prior to the detection by the [Assessing] Officer, of the concealment of particulars of income or of the inaccuracy of particulars furnished in respect of such income, voluntarily and in good faith, made full and true disclosure of such particulars,
(c) [***]
and also has, [in the case referred to in clause (b)], co-operated in any enquiry relating to the assessment of his income and has either paid or made satisfactory arrangements for the payment of any tax or interest payable in consequence of an order passed under this Act in respect of the relevant assessment year.
Explanation [***].—For the purposes of this sub-section, a person shall be deemed to have made full and true disclosure of his income or of the particulars relating thereto in any case where the excess of income assessed over the income returned is of such a nature as not to attract the provisions of clause (c) of sub-section (1) of section 271.
[***]
(2) Notwithstanding anything contained in sub-section (1),—
(a) [***]
(b) if in a case falling under clause (c) of sub-section (1) of section 271, the amount of income in respect of which the penalty is imposed or imposable for the relevant assessment year, or, where such disclosure relates to more than one assessment year, the aggregate amount of such income for those years, exceeds a sum of five hundred thousand rupees,
no order reducing or waiving the penalty under sub-section (1) shall be made by [the Commissioner except with the previous approval of the Chief Commis-sioner or Director General, as the case may be].
(3) Where an order has been made under sub-section (1) in favour of any person, whether such order relates to one or more assessment years, he shall not be entitled to any relief under this section in relation to any other assessment year at any time after the making of such order :
[Provided that where an order has been made in favour of any person under sub-section (1) on or before the 24th day of July, 1991, such person shall be entitled to further relief only once in relation to other assessment year or years if he makes an application to the income-tax authority referred to in sub-section (4) at any time before the 1st day of April, 1992.]
(4) Without prejudice to the powers conferred on him by any other provision of this Act, the [[***] Commissioner] may, on an application made in this behalf by an assessee, and after recording his reasons for so doing, reduce or waive the amount of any penalty payable by the assessee under this Act or stay or compound any proceeding for the recovery of any such amount, if he is satisfied that—
(i) to do otherwise would cause genuine hardship to the assessee, having regard to the circumstances of the case; and
(ii) the assessee has co-operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him:
[Provided that where the amount of any penalty payable under this Act or, where such application relates to more than one penalty, the aggregate amount of such penalties exceeds one hundred thousand rupees, no order reducing or waiving the amount or compounding any proceeding for its recovery under this sub-section shall be made by [the Commissioner except with the previous approval of the Chief Commissioner or Director General, as the case may be].
(5) Every order made under this section shall be final and shall not be called into question by any court or any other authority.]
[(6) 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.]
[(7) Notwithstanding anything contained in sub-section (6), the provisions of sub-section (1), sub-section (2), or, as the case may be, sub-section (4) [as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1989 (3 of 1989)], shall apply in the case of reduction or waiver of penalty or interest in relation to any assessment for the assessment year commencing on the 1st day of April, 1988 or any earlier assessment year, with the modifications that the power under the said sub-section (1) shall be exercisable only by the Commissioner and instead of the previous approval of the Board, the Commissioner shall obtain the previous approval of the Chief Commissioner or Director General, as the case may be, while dealing with such case.]
[Penalty not to be imposed in certain cases.
273B. Notwithstanding anything contained in the provisions of [clause (b) of sub-section (1) of] [section 271, section 271A, [section 271AA,] section 271B [, section 271BA], [section 271BB,] section 271C, [section 27CA, ] section 271D, section 271E, [section 271F, [section 271FA,] [section 271FB,] [section 271G,]] clause (c) or clause (d) of sub-section (1) or sub-section (2) of section 272A, sub-section (1) of section 272AA] or [section 272B or] [sub-section (1) [or sub-section (1A)] of section 272BB or] [sub-section (1) of section 272BBB or] clause (b) of sub-section (1) or clause (b) or clause (c) of sub-section (2) of section 273, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure.]
274. (1) No order imposing a penalty under this Chapter shall be made unless the assessee has been heard, or has been given a reasonable opportunity of being heard.
[(2) No order imposing a penalty under this Chapter shall be made—
(a) by the Income-tax Officer, where the penalty exceeds ten thousand rupees;
(b) by the Assistant Commissioner [or Deputy Commissioner], where the penalty exceeds twenty thousand rupees,
except with the prior approval of the [Joint] Commissioner.]
[(3) An income-tax authority on making an order under this Chapter imposing a penalty, unless he is himself the Assessing Officer, shall forthwith send a copy of such order to the Assessing Officer.]
[Bar
of limitation for imposing penalties.
275. [(1)] No order imposing a penalty under this Chapter shall be passed—
[(a) in a case where the relevant assessment or other order is the subject-matter of an appeal to the [***] Commissioner (Appeals) under section 246 [or section 246A] or an appeal to the Appellate Tribunal under section 253, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which the order of the [***] Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the Chief Commissioner or Commissioner, whichever period expires later :
[Provided that in a case where the relevant assessment or other order is the subject-matter of an appeal to the Commissioner (Appeals) under section 246 or section 246A, and the Commissioner (Appeals) passes the order on or after the 1st day of June, 2003 disposing of such appeal, an order imposing penalty shall be passed before the expiry of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed, or within one year from the end of the financial year in which the order of the Commissioner (Appeals) is received by the Chief Commissioner or Commissioner, whichever is later;]
(b) in a case where the relevant assessment or other order is the subject-matter of revision under section 263 [or section 264], after the expiry of six months from the end of the month in which such order of revision is passed;
(c) in any other case, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later.]
[(1A)
In a case where the relevant assessment or other order is the subject-matter
of an appeal to the Commissioner (Appeals) under section 246 or section 246A or
an appeal to the Appellate Tribunal under section 253 or an appeal to the High
Court under section 260A or an appeal to the Supreme Court under section 261 or
revision under section 263 or section 264 and an order imposing or enhancing or
reducing or cancelling penalty or dropping the
proceedings for the imposition of penalty is passed before the order of the
Commissioner (Appeals) or the Appellate Tribunal or the High Court or the
Supreme Court is received by the Chief Commissioner or the Commissioner or the
order of revision under section 263 or ection 264 is
passed, an order imposing or enhancing or reducing or cancelling
penalty or dropping the proceedings for the imposition of penalty may be passed
on the basis of assessment as revised by giving effect to such order of the
Commissioner (Appeals) or, the Appellate Tribunal or the High Court, or the
Supreme Court or order of revision under section 263 or section 264:
Provided that
no order of imposing or enhancing or reducing or cancelling
penalty or dropping the proceedings for the imposition of penalty shall be
passed—
(a) unless the assessee has been heard, or has been given a reasonable opportunity of being heard;
(b) after the expiry of six months from the end of the month in which the order of the Commissioner (Appeals) or the Appellate Tribunal or the High Court or the Supreme Court is received by the Chief Commissioner or the Commissioner or the order of revision under section 263 or section 264 is passed:
Provided
further that the provisions of sub-section (2) of section 274
shall apply in respect of the order imposing or enhancing or reducing penalty
under this sub-section.]
[(2) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any action initiated for the imposition of penalty on or before the 31st day of March, 1989.]
[Explanation.—In computing the period of limitation for the purposes of this section,—
(i) the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129;
(ii) any period during which the immunity granted under section 245H remained in force; and
(iii) any period during which a proceeding under this Chapter for the levy of penalty is stayed by an order or injunction of any court,
shall be excluded.]]