CHAPTER XXI

PENALTIES  IMPOSABLE

 

 

Failure to furnish information regarding securities, etc.

270.     54[R1] [Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.]

 

 

55[R2] [Failure to furnish returns, comply with notices, concealment of income, etc.

56[R3] 271.  (1)    If the 57[R4] [Assessing] Officer or the 58[R5] [***] 59[R6] [Commissioner (Appeals)] in the course of any proceedings under this Act, is satisfied that any person—

               

(a)           60[R7] [* * *]

              

(b)           has 61[R8] [* * *] failed to comply with a notice under sub-section (1) of section 142 or sub-section (2) of section 143 62[R9] [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 63[R10] [* * *] furnished inaccurate particulars of such income64[R11] ,he may direct that such person shall pay by way of penalty,—

               

(i)         65[R12] [* * *]

           

66[R13] [(ii)   in the cases referred to in clause (b), in addition to any tax payable by him, 66a[R14] [a sum of ten thousand rupees] for each such failure ;]

           

67[R15] [(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 68[R16] [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.

                  69[R16] [* * *]

 

70[R17] [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 71[R18] [Assessing] Officer or the 72[R19] [***]73[R20] [Commissioner (Appeals)] to be false, or

           

(B)       such person offers an explanation which he is not able to substantiate 74[R21] [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.

75[R22] [* * *]

 

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.

 

76[R23] [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 77[R24] [***] 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 parti-culars 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.]

 

78[R25] [Explanation 5.—Where in the course of a search under section 132, 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, 79[R26] [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 80[R27] [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 81[R28] [* * *] 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.]

 

82[R29] [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.]

 

The following Explanation 7 shall be inserted after Explanation 6 to sub-section (1) of section 271 by the Finance Act, 2001, w.e.f. 1-4-2002 :

 

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) 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.

 

83[R30] [(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)        84[R31] [Omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.]

 

(4)        If the 85[R32] [Assessing] Officer or the 86[R33] [***] 87[R34] [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.]

 

88[R35] [(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.]

 

 

89[R36] [Failure to keep, maintain or retain books of account, documents, etc.

271A.  Without prejudice to the provisions of section 271, if any person 90[R37] [***] 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 91[R38] [Assessing] Officer or the 92[R39] [***] 93[R40] [Commissioner (Appeals)] may direct that such person shall pay, by way of penalty, 94[R41] [a sum of twenty five thousand rupees].

 

The following section 271AA shall be inserted after section 271A by the Finance Act, 2001, w.e.f. 1-4-2002 :

 

Penalty for failure to keep and maintain information and document in respect of international transaction.

 

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.

 

 

 

95[R42] [Failure to get accounts audited.

271B.        If any person fails 96[R43] [***] to get his accounts audited in respect of any previous year or years relevant to an assessment year or 97[R44] [furnish a report of such audit as required under section 44AB], the 98[R45] [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.]

 

 

The following section 271BA shall be inserted after section 271B by the Finance Act, 2001, w.e.f. 1-4-2002 :

 

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.

 

  

99[R46] [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 88A1[R47]  to the eligible issue of capital under that sub-section within the period of six months specified therein, may be directed by the 2[R48] [Joint] Commissioner to pay, by way of penalty, a sum equal to twenty per cent of such amount.]

 

3[R49] [Penalty for failure to deduct tax at source.

271C.  4[R50] [(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.]

 

5[R51] [(2)    Any penalty imposable under sub-section (1) shall be imposed by the 6[R52] [Joint] Commissioner.]

 

7[R53] [Penalty for failure to comply with the provisions of section 269SS.

271D.8[R54] [(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.]

 

9[R55] [(2)     Any penalty imposable under sub-section (1) shall be imposed by the 6[R56] [Joint] Commissioner.]

 

10[R57] [Penalty for failure to comply with the provisions of section 269T.

271E.11[R58] [(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.]

 

12[R59] [(2)    Any penalty imposable under sub-section (1) shall be imposed by the 13[R60] [Joint] Commissioner.]

 

14[R61] [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, fails to furnish such return before the end of the relevant assessment year, he shall be liable to pay, by way of penalty, a sum of 14a[R62] [five] thousand rupees :

 

Provided that a person who is required to furnish a return of his income, as required by the proviso to sub-section (1) of section 139, fails to furnish such return on or before the due date, he shall be liable to pay, by way of penalty, a sum of 14[R63] b[five thousand] rupees.]

 

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.     15[R64] [Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.]

 

16[R65] [Penalty for failure to answer questions, sign statements, furnish information, returns or statements, allow inspections, etc.

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; or

           

(d)        fails to comply with the provisions of section 139A, he shall pay, by way of penalty, 16a[R66] [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 17[R67] [***] 18[R68] [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) of section 139 or to furnish it within the time allowed and in the manner required under that sub-section; 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 18[R69] [or section 206C]; or

           

(h)        to deduct and pay tax as required by sub-section (2) of section 226;

 

The following clause (i) shall be inserted after clause (h) in sub-section  (2) of section 272A by the Finance Act, 2001, w.e.f. 1-4-2002 :

           

(i)         to furnish a statement as required by sub-section (2C) of section 192.he shall pay, by way of penalty, a sum 19[[R70] of one hundred rupees] for every day during which the failure continues:

 

20[R71] [Provided that the amount of penalty for failures in relation to 21[R72] [a declaration mentioned in section 197A, a certificate as required by section 203 and] returns under sections 206 and 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 22[[R73] Joint] Director or a 22[R74] [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 22[R75] [Joint] Director or the 22[R76] [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, 22[R77] [Joint] Director and an Assistant Director 23[R78] [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.]

 

24[R79] [Penalty for failure to comply with the provisions of section 133B.

272AA.   (1)    If a person 25[R80] [***] fails to comply with the provisions of section 133B, he shall, on an order passed by the 26[R81] [Joint Commissioner], 27[R82] [Assistant Director] 28[R83] [or Deputy Director] or the 29[R84] [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.  30[R85] [Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Original section 272B was inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.]

 

31[R86] [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 32[R87] [Assessing] Officer, pay, by way of penalty, 32a[R88] [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.]

 

33[R89] [False estimate of, or failure to pay, advance tax.

273.34[R90] [(1)    If the 32[R91] [Assessing] Officer, in the course of any proceedings in connection with the regular assessment35[R92]  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 36[R93] [***] 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]:

 

37[R94] [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.]

 

38[R95] [(2)]     If the 39[R96] [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—

               

40[R97] [(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]

                       

41[R98] [(aa)    has furnished 42[R99] [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 43[R100] [***] failed to furnish an estimate of the advance tax payable by him in accordance with the provisions of 44[R101] [clause (b) of sub-section (1) of section 209A], or

                       

(c)        has 45[R102] [***] failed to furnish an estimate of the advance tax payable by him in accordance with the provisions of 46[R103] [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

           

47[R104] [(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;

               

48[R105] [(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

           

49[R106] [(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:]]

 

50[R107] [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.]

 

51[R108] [Explanation 52[R109] [1].—For the purposes of clause (ia), the amount paid by the assessee on or before the date extended by the 53[R110] [Chief Commissioner or Commissioner] under the 54[R111] [first] 55[R112] [proviso to sub-section (4) of section 209A or, as the case may be,] 54[R113] [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.]

 

56[R114] [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.]

 

57[R115] [(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.]

 

58[R116] [Power to reduce or waive penalty, etc., in certain cases.

59[R117] 273A.(1)    Notwithstanding anything contained in this Act, the 60[R118] [61[R119] [***] Commissioner] may, in his discretion, whether on his own motion or otherwise,—

           

(i)         62[R120] [***]

           

 (ii)       reduce or waive the amount of penalty imposed or imposable on a person under clause (iii) of sub-section (1) of section 271; *[R121] [or]

           

(iii)       63[R122] [***]if he is satisfied that such person—

               

(a)        64[R123] [***]

           

(b)        in the case referred to in clause (ii), has, prior to the detection65[R124]  by the 66[R125] [Assessing] Officer, of the concealment of particulars of income or of the inaccuracy of particulars furnished in respect of such income, voluntarily67[R126]  and in good faith67[R127] , made full and true disclosure67[R128]  of such particulars;

           

(c)        68[R129] [***] and also has, 69[R130] [in the case referred to in clause (b)], co-operated67[R131]  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 70[R132] [***].—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.

70[R133] [***]

 

(2)        Notwithstanding anything contained in sub-section (1),—

               

(a)        71[R134] [***]

           

(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 72[R135] [the Commissioner except with the previous approval of the Chief Commissioner 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 :

 

73[R136] [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 74[R137] [75[R138] [***] 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:

 

76[R139] [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 77[R140] [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.]

 

78[R141] [(6)     The provisions of this section 79[R142] [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.]

 

80[R143] [(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.]

 

81[R144] [Penalty not to be imposed in certain cases.

273B.        Notwithstanding anything contained in the provisions of 82[R145] [clause (b) of sub-section (1) of] 83[R146] [section 271, section 271A, 83a[R147] [section 271AA,] section 271B, 83a[R148] [Section 271BA], 84[R149] [section 271BB,] section 271C, section 271D, section 271E, 85[R150] [section 271F, 85a[R151] [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 86[R152] [sub-section (1) of section 272BB 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.]

 

Procedure.

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.

 

87[R153] [(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 88[R154] [or Deputy Commissioner], where the penalty exceeds twenty thousand rupees, except with the prior approval of the 89[R155] [Joint] Commissioner.]

 

 

90[R156] [(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.]

 

91[R157] [Bar of limitation for imposing penalties.

275.92[R158] [(1)]    No order imposing a penalty under this Chapter shall be passed—

 

93[R159] [(a)      in a case where the relevant assessment or other order is the subject-matter of an appeal to the 94[R160] [***] Commissioner (Appeals) under section 246 95[R161] [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 96[R162] [***] Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the Chief Commissioner or Commissioner, whichever period expires later;

 

(b)        in a case where the relevant assessment or other order is the subject-matter of revision under section 263, 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.]

 

97[R163] [(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.]

 

98[R164] [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.]]

 

 

 [R1]Prior to its omission, section 270, as amended by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986, stood as under :

        “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.”

 [R2]Restored to its original version by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.

 [R3]See also relevant extracts of Minutes of 10th Meeting of DTAC held on 23-12-1967 and Circular No. 162, dated 24-3-1975 as amended by Circular No. 186, dated 23-12-1975.

 [R4]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

 [R5]Words “Deputy Commissioner (Appeals) or the” omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. Earlier, “Deputy Commissioner (Appeals)” was substituted for “Appellate Assistant Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988 and “or the” was inserted by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978.

 [R6]Inserted by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978.

 [R7]Omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Prior to its 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, stood 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 sub-section (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”

 [R8] Words “without reasonable cause” omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.

 

 [R9]Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.

 [R10]Word “deliberately” omitted by the Finance Act, 1964, w.e.f. 1-4-1964.

 [R11]For the meaning of the expressions “his income” and “has conceded .........  of such income”.

 [R12]Omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Prior to its omission, clause (i), as substituted by the Direct Taxes (Amendment) Act, 1974, with retrospective effect from 1-4-1962 and Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976, stood 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 XVII-B or paid in advance under Chapter XVII-C ;’

 [R13]Substituted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Prior to its substitution, clause (ii) stood 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 ;”

 [R14]Substituted for “a sum which shall not be less than one thousand rupees but which may extend to twenty-five thousand rupees” by the Finance Act, 2001, w.e.f. 1-6-2001.

 

 [R15]Substituted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976. Original clause (iii) was substituted by the Finance Act, 1968, w.e.f. 1-4-1968.

 

 [R16]Substituted for “twice” by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.

 

 [R17]Substituted for Explanation by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976. Original Explanation was inserted by the Finance Act, 1964, w.e.f. 1-4-1964.

 

 [R18]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

 

 [R19] Words “Deputy Commissioner (Appeals) or the” omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. Earlier, “Deputy Commissioner (Appeals)” was substituted for “Appellate Assistant Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988 and “or the” was inserted by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978.

 

 [R20] Inserted by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978.

 [R21]                Inserted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.

 [R22]Proviso omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986. Prior to its omission, the proviso stood 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 person, 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.

 [R23]Substituted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Prior to its substitution, Explanation 3, as amended by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978, stood 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 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 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.”

 [R24]Words “Deputy Commissioner (Appeals) or the” omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

 [R25] Inserted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984.

 [R26]Substituted for the following by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986 :

        “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.”

 [R27]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

 [R28]Words “clause (a) or clause (b) of” omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.

 [R29]Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.

 [R30]Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.

 [R31]Prior to its omission, sub-section (3), as amended by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976, stood as under :

        “(3) Notwithstanding anything contained in this section,—

   (a)   no penalty for failure to furnish the return of his total income under sub-section (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).”

 [R32] Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

 [R33]Words “Deputy Commissioner (Appeals) or the” omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. Earlier “Deputy Commissioner (Appeals)” was substituted for “Appellate Assistant Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988 and “or the” was inserted by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978.

 

 [R34]Inserted by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978.

 [R35]Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.

 [R36]Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.

 [R37]Words “, without reasonable cause,” omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.

 [R38] Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

 [R39]Words “Deputy Commissioner (Appeals) or the” omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. Earlier “Deputy Commissioner (Appeals)” was substituted for “Appellate Assistant Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988 and “or the” was inserted by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978.

 [R40] Inserted by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978.

 [R41]Substituted for “a sum which shall not be less than two thousand rupees but which may extend to one hundred thousand rupees” by the Finance Act, 2001, w.e.f. 1-6-2001. Earlier the quoted words were 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 the 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.

 

 [R42] Inserted by the Finance Act, 1984, w.e.f. 1-4-1985.

 [R43]Words “, without reasonable cause,” omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.

 [R44]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. Earlier certain words were inserted in the quoted portion by the Finance Act, 1988, w.e.f. 1-4-1989.

 [R45] Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

 [R46]Inserted by the Finance Act, 1990, w.e.f. 1-4-1990.

 [R47] Section 88A was omitted by the Finance (No. 2) Act, 1996, w.r.e.f. 1-4-1994.

 [R48]Substituted for “Deputy” by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

 [R49]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.

4. [R50]Substituted by the Finance Act, 1997, w.e.f. 1-6-1997. Prior to its substitution, sub-section (1), as inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989 and amended by the Finance Act, 1990, w.e.f. 1-4-1990, read as under :

        “(1) If any person fails to deduct the whole or any part of the tax as required by or under the provisions of Chapter XVII-B, 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.”

 [R51].Inserted by the Finance Act, 1990, w.e.f. 1-4-1990.

 [R52]Substituted for “Deputy” by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

 [R53] Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.

 [R54]Numbered as sub-section (1) by the Finance Act, 1990, w.e.f. 1-4-1990.

 [R55] Inserted by the Finance Act, 1990, w.e.f. 1-4-1990.

 [R56]                Substituted for “Deputy” by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

 [R57]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.

 [R58]Numbered as sub-section (1) by the Finance Act, 1990, w.e.f. 1-4-1990.

 [R59] Inserted by the Finance Act, 1990, w.e.f. 1-4-1990.

 [R60]Substituted for “Deputy” by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

 [R61] Substituted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999. Prior to its substitution, section 271F, as inserted by the Finance Act, 1997, w.e.f. 1-4-1997, read as under :

                                “271F. Penalty for failure to furnish return of income.—If a person who is required to furnish a return of his income as required by the proviso to sub-section (1) of section 139 fails to furnish such return on or before the due date, he shall be liable to pay by way of penalty, a sum of five hundred rupees.”

 [R62]Substituted for “one” by the Finance Act, 2001, w.e.f. 1-6-2001.

 

 [R63]Substituted for “five hundred” by the Finance Act 2001, w.e.f. 1-6-2001.

 

 [R64] Prior to its omission, section 272 stood as under:

                                “Where any person fails to give the notice of discontinuance of his business or profession as required by sub-section (3) of section 176, the Assessing Officer may direct that a sum shall be recovered from him by way of penalty which shall not be less than 10 per cent of the tax but which shall not exceed the amount of tax subsequently assessed on him in respect of any income of the business or profession up to the date of its discontinuance.”

 [R65] Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Prior to its substitution, section 272A, as inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976 and later on amended by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978, Finance Act, 1982, w.e.f. 1-6-1982, Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986 and Finance Act, 1987, w.e.f. 1-6-1987, stood as under:

        “272A. Penalty for failure to answer questions, sign statements, allow inspections, etc.—

        (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 demanded of him by an Assessing Officer or a Deputy Commissioner (Appeals) or a Deputy Commissioner or a Commissioner (Appeals) or a Chief Commissioner or Commissioner in the exercise of his powers under this Act; or

   (b)   refuses to sign any statement made by him in the course of any proceeding under this Act which an Assessing Officer or a Deputy Commissioner (Appeals) or a Deputy Commissioner or a Commissioner (Appeals) or a Chief Commissioner or Commissioner may legally require him to sign,

        he shall pay, by way of penalty, a sum which may extend to one thousand rupees.

        (2) If a person fails,—

   (a)   to furnish in due time any of the returns or statements mentioned in section 133, section 206 or section 285B; or

   (b)   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

(ba)   to deliver or cause to be delivered in due time a copy of the declaration mentioned in section 197A; or

   (c)   to furnish a certificate as required by section 203; or

   (d)   to deduct and pay tax as required by sub-section (2) of section 226,

        he shall pay, by way of penalty, a sum which may extend to ten rupees for every day during which the failure continues.

        (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 the Chief Commissioner or Commissioner or the Commissioner (Appeals) or the Deputy Commissioner (Appeals), by the Chief Commissioner or Commissioner or the Commissioner (Appeals) or, as the case may be, the Deputy Commissioner (Appeals);

(aa)   in a case falling under clause (ba) of sub-section (2), by the Chief Commissioner or  Commissioner; and

   (b)   in any other case, by the Deputy Commissioner.

                                (4) No order under this section shall be passed by any officer 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 officer.”

 [R66]Substituted for “a sum which shall not be less than five hundred rupees but which may extend to ten thousand rupees” by the Finance Act, 2001, w.e.f. 1-6-2001.

 [R67]Words “or section 206A or section 206B” omitted by the Finance (No. 2) Act, 1996, w.e.f. 1-10-1996.

 [R68]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.

 [R69]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.

 [R70]Substituted for “which shall not be less than one hundred rupees, but which may extend to two hundred rupees,” by the Finance Act, 1999, w.e.f. 1-6-1999.

 [R71] Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.

 [R72]                Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999.

 [R73]                Substituted for “Deputy” by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

 [R74] Substituted for “Deputy” by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

 [R75] Substituted for “Deputy” by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

 [R76] Substituted for “Deputy” by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

 [R77]                Substituted for “Deputy” by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

 [R78]                Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

 [R79]Inserted by the Finance Act, 1986, w.e.f. 13-5-1986.

 [R80]Words “, without reasonable cause,” omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.

 [R81]Substituted for “Deputy Commissioner” by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. Earlier “Deputy Commissioner” was substituted for “Inspecting Assistant Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

 [R82]Substituted for “Assistant Director of Inspection” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

 [R83] Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

 [R84]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

 [R85]Prior to its omission, section 272B, as amended by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986, stood as under:

        “(1)  If a person fails to comply with the provisions of section 139A, he shall, on an order passed by the Assessing Officer, pay, by way of penalty, a sum which may extend to five hundred 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.”

 [R86]Inserted by the Finance Act, 1987, w.e.f. 1-6-1987.

 [R87]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

 [R88]Substituted for “a sum which may extend to five thousand rupees” by the Finance Act, 2001, w.e.f. 1-6-2001.

 [R89]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

 [R90]Substituted by the Finance Act, 1969, w.e.f. 1-4-1970.

 [R91]Inserted by the Finance Act, 1978, w.e.f. 1-6-1978.

 [R92]For the meaning of the term “regular assessment”.

 [R93]Words “, without reasonable cause,” omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.

 [R94]Inserted by the Finance (No. 2) Act, 1980, w.e.f. 1-9-1980.

 [R95] Inserted by the Finance Act, 1978, w.e.f. 1-6-1978.

 [R96]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

 [R97]Substituted by the Finance Act, 1978, w.e.f. 1-6-1978. Earlier, clause (a) was amended by the Finance (No. 2) Act, 1977, w.e.f. 1-4-1977.

 [R98]Inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-9-1977.

 [R99] Inserted by the Finance Act, 1978, w.e.f. 1-6-1978.

 [R100]Words “without reasonable cause” omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.

 [R101]Substituted for “sub-section (3) of section 212” by the Finance Act, 1978, w.e.f. 1-6-1978.

 [R102]Words “without reasonable cause” omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.

 [R103]Inserted by the Finance Act, 1978, w.e.f. 1-6-1978.

 [R104]Substituted by the Finance Act, 1978, w.e.f. 1-6-1978.

 [R105]Inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-9-1977.

 [R106]Substituted by the Finance Act, 1978, w.e.f. 1-6-1978.

 [R107]Inserted by the Finance (No. 2) Act, 1980, w.e.f. 1-9-1980.

 [R108] Inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-9-1977.

 [R109]Numbered as Explanation 1 by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-4-1985.

 [R110]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

 [R111]Inserted by the Finance Act, 1981, w.e.f. 1-4-1981.

 [R112]Inserted by the Finance Act, 1978, w.e.f. 1-6-1978.

 [R113]Inserted by the Finance Act, 1981, w.e.f. 1-4-1981.

 [R114]Inserted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-4-1985.

 [R115]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.

 [R116]Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10-1975.

 [R117]See also Instruction No. 1417, dated 29-9-1981 and Circular No. 784, dated 22-11-1999..

 [R118]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

 [R119]Words “Chief Commissioner or” omitted by the Finance Act, 1993, w.e.f. 1-6-1993.

 [R120]Omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Prior to its omission, clause (i) stood as under:

       “(i)   reduce or waive the amount of penalty imposed or imposable on a person under clause (i)  of sub-section (1) of section 271 for failure, without reasonable cause, to furnish the return of total income which he was required to furnish under sub-section (1) of section 139; or”

 

 [R121]Should be deleted.

 [R122]Omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Prior to its omission, clause (iii) stood as under:

                “(iii)       reduce or waive the amount of interest paid or payable under sub-section (8) of section 139 or section 215 or section 217 or the penalty imposed or imposable under section 273,”

 [R123]Omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Prior to its omission, clause (a) stood as under:

                “(a)         in the case referred to in clause (i), has, prior to the issue of a notice to him under sub-section (2) of section 139, voluntarily and in good faith made full and true disclosure of his income;”

 [R124]For the meaning of the term “detection”.

 [R125]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

 

 [R126]For the meaning of the terms/expressions “voluntarily”, “good faith”, “disclosure” and “co-operated”

 [R127]For the meaning of the terms/expressions “voluntarily”, “good faith”, “disclosure” and “co-operated

 [R128]For the meaning of the terms/expressions “voluntarily”, “good faith”, “disclosure” and “co-operated

 

 [R129]Omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Prior to its omission, clause (c) stood as under:

                “(c)         in the cases referred to in clause (iii), has, prior to the issue of a notice to him under sub-section (2) of section 139, or where no such notice has been issued and the period for the issue of such notice has expired, prior to the issue of notice to him under section 148, voluntarily and in good faith made full and true disclosure of his income and has paid the tax on the income so disclosed,”

 [R130]Substituted for “in all the cases referred to in clauses (a), (b) and (c)” by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.

 

 [R131]For the meaning of the terms/expressions “voluntarily”, “good faith”, “disclosure” and “co-operated

 

 [R132]“1” and Explanation 2, as inserted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984, omitted by the Finance Act, 1985, w.e.f. 24-5-1985. Omitted Explanation 2  read as under:

        “Explanation 2.—Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing belonging to a person are seized under section 132 and within fifteen days of such seizure, the person makes a full and true disclosure of his income to the Commissioner, such person shall, for the purposes of clause (b) of this sub-section, be deemed to have made, prior to the detection by the Income-tax 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, a disclosure of such particulars.”

 

 [R133]“1” and Explanation 2, as inserted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984, omitted by the Finance Act, 1985, w.e.f. 24-5-1985. Omitted Explanation 2  read as under:

                                “Explanation 2.—Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing belonging to a person are seized under section 132 and within fifteen days of such seizure, the person makes a full and true disclosure of his income to the Commissioner, such person shall, for the purposes of clause (b) of this sub-section, be deemed to have made, prior to the detection by the Income-tax 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, a disclosure of such particulars.”

 [R134]Omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Prior to its omission, clause (a), as amended by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984, stood as under:

                “(a)         if in a case the penalty imposed or imposable under clause (i) of sub-section (1) of section 271 or the minimum penalty imposable under section 273 for the relevant assessment year, or, where such disclosure relates to more than one assessment year, the aggregate of the penalty imposed or imposable under the said clause or of the minimum penalty imposable under the said section for those years, exceeds a sum of one hundred thousand rupees, or”

 [R135]Substituted for “the Chief Commissioner or Commissioner except with the previous approval of the Board” by the Finance Act, 1993, w.e.f. 1-6-1993. Earlier the words “Chief Commissioner or Commissioner” was substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988

 [R136]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 27-9-1991.

 [R137]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

 [R138] Words “Chief Commissioner or” omitted by the Finance Act, 1993, w.e.f. 1-6-1993.

 [R139]Inserted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984.

 [R140] Substituted for “the Chief Commissioner or Commissioner except with the previous approval of the Board” by the Finance Act, 1993, w.e.f. 1-6-1993. Earlier the words “Chief Commissioner or Commissioner” was substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.

 [R141]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.

 [R142]Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.

 [R143]                Inserted by the Finance Act, 1994, w.e.f. 1-6-1994.

 [R144]Inserted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.

 [R145] Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.

 [R146]Substituted for “section 270, clause (a) or clause (b) of sub-section (1) of section 271, section 271A, section 271B, sub-section (2) of section 272A, sub-section (1) of section 272AA, sub-section (1) of section 272B” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.

 [R147]The italicised word and figures shall be inserted by the Finance Act, 2001, w.e.f. 1-4-2002.

 

 [R148]The italicised word and figures shall be inserted by the Finance Act, 2001, w.e.f. 1-4-2002.

 

 [R149]Inserted by the Finance Act, 1990, w.e.f. 1-4-1990.

 [R150]Inserted by the Finance Act, 1997, w.e.f. 1-4-1997.

 [R151]The italicised word and figures shall be inserted by the Finance Act, 2001, w.e.f. 1-4-2002.

 

 [R152] Inserted by the Finance Act, 1987, w.e.f. 1-6-1987.

 

 [R153]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Original sub-section (2) which was amended by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971, was omitted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1975.

 [R154] Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

 [R155] Substituted for “Deputy” by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

 [R156]Substituted by the Taxation Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Prior to its substitution, sub-section (3), as substituted by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978, stood as under:

                                “(3) A Deputy Commissioner (Appeals) or a Commissioner (Appeals), on making an order under this Chapter imposing a penalty, shall forthwith send a copy of the same to the  Assessing Officer.”

 [R157] Substituted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971.

 

 [R158]Renumbered by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1989.

 

 [R159]Substituted for clauses (a) and (b) by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Prior to its substitution, clause (a) as amended by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978, stood as under:

“(a)   in a case where the relevant assessment or other order is the subject-matter of an appeal to the Deputy Commissioner (Appeals) or the Commissioner (Appeals) under section 246 or an appeal to the Appellate Tribunal under sub-section (2) of section 253, after the expiration of a period of—

    (i)   two years from the end of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed, or

   (ii)   six months from the end of the month in which the order of the Deputy Commissioner (Appeals) or the  Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the Chief Commissioner or Commissioner,

whichever period expires later;

                (b)           in any other case, after the expiration of two years from the end of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed.”

 [R160]Words “Deputy Commissioner (Appeals) or the” omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.

 

 [R161] Inserted by the Finance Act, 2000, w.e.f. 1-6-2000.

 

 [R162] Words “Deputy Commissioner (Appeals) or the” omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. Earlier the quoted words were inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.

 

 [R163]Inserted by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1989.

 [R164] Substituted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.