Penalties and Prosecutions
Default in complying with provisions of or with conditions prescribed under the Income-tax Act would attract certain penalty and in critical cases prosecutions as well. The document will provide you information about the punishable offenses, prosecutions and the quantum of penalties that can be imposed under the law.
There are three modes built in the fiscal legislation for encouraging tax compliance: (a) Charge of Interest, (b) imposition of penalty (c) launching of prosecution against tax delinquents. While charging of interest is compensatory on character, the imposition of penalty and institution of prosecution proceedings act as strong deterrents against potential tax delinquents.
What are the defaults which may invite levy of penalty?
Chapters XVII and XXI of Income-tax Act, 1961, contain various provisions empowering an Income-tax Authority to levy penalty in case of certain defaults. The following defaults may invite levy of penalty:
(i) When the assessee is in default or is deemed to be in default in making payment of tax, including the tax deducted at source, advance tax and the self-assessment tax. [Section 221 read with Sec.201(1)]
(ii) Failure to pay the advance tax as directed by the Assessing Officer or as estimated by the assessee. [Section 273(1)]
(iii) Failure to comply with a notice issued under section 142(1) or 143(2) or failure to comply with the direction issued under section 142(2A) to get the accounts audited. [Section 271(1)(b)]
(iv) Concealment of particulars of income or furnishing of inaccurate particulars of income. [Section 271(1)(c)]
(v) Failure to maintain books of accounts and documents by persons carrying on profession or business as prescribed under section 44AA. [Section 271A]
(vi) Failure to get the accounts audited in prescribed circumstances or failure to obtain the prescribed audit report within prescribed time period of failure to furnish the audit report along with the return, as required under section 44AB. [Section 271B]
(vii) Failure to subscribe to the eligible issue of capital [Section 271BB]
(viia) Penalty for failure to deduct tax at source. [Section 271C]
(viii) Accepting of any loan or deposit or repayment of deposit of Rs.20,000 or more otherwise than by account payee cheque or account payee draft, in contravention of the provisions of Section 269SS. [Section 271D]
(viiia) Repayment of loan in contravention of the conditions imposed in section 269T. [Section 271E]
(viiib) A. Failure of file the return of income as required under Section 239 (1), shall entail imposition of penalty. [Section 271F]
B. Failure to file the return as required under the proviso to Section 139(1), in the event of assessee fulfilling the prescribed conditions, i.e., certain persons in occupation of immovable property or owner of motor vehicle or subscriber to telephone, one who incurred expenditure on foreign travel, the holder of the credit card or a member of a club, subject to specific conditions, are required to file the return as per proviso to Section 139(1), failing which penalty may be imposed. (Proviso to Section 271F)
(ix) Refusal to answer in contravention of legal obligation. [Section 272A(1)(a)]
(x) Refusal to sign any statement made in the course of income-tax proceedings. [Section 272A(1)(b)]
(xi) Failure to attend or give evidence or produce books of accounts and documents in compliance with the requirements of summons under section 131(1). [Section 272A(1)(c)]
(xii) Failure to comply with the provisions of section 139A dealing with the application form and allotment of Permanent Account Number or General Index Register Number. [Section 272A(1)(d)]
(xiii) Failure to furnish information regarding securities. [Section 272A(2)(a)]
(xiv) Failure to give notice of discontinuance of business or profession. [Section 272A(2)(b)]
(xv) Failure to furnish in due time information sought under section 133 of the Income-tax Act. [Section 272A(2)(c)]
(xvi) Failure to furnish in due time prescribed returns/statements. [Section 272A(2)(c)]
(xvii) Failure to allow inspection or take copies of registers of companies. [Section 272A(2)(d)]
(xviii) Failure to furnish in due time the return of income by charitable or religious institutions. [Section 272A(2)(e)]
(xix) Failure to deliver in due time a copy of declaration of non-deduction of tax at source u/s.197A. [Section 272A(2)(f)]
(xx) Failure to furnish a certificate of tax deducted at source to the person on whose behalf tax has been deducted or collected as required by Section 203 or Section 206C. [Section 272A(2)(g)]
(xxi) Failure to deduct and pay tax from salary payable to an employee as directed by the Assessing Officer or the Tax Recovery Officer as required by Section 226(2). [Section 272A(2)(h)]
(xxii) Failure to allow an Income-tax Authority to collect any information useful or relevant to the purposes of Income-tax Act u/s.133B. [Section 272AA)]
(xxiii) Failure to comply with the provisions of section 203a dealing with tax Deduction Account Number [Section 272BB]
Is the levy of penalty automatic?
No penalty under the Income-tax Act is imposed unless the person concerned has been given reasonable opportunity of being heard.
What is the minimum and maximum penalty leviable?
The quantum of penalty leviable depends upon the nature of default. The relevant section of Income-tax Act prescribe the minimum and maximum penalties which can be levied.
Can the penalty be reduced or waived?
The Commissioner of Income-tax may reduce or waive the amount of any penalty imposed or imposable, if prescribed conditions are satisfied. The assessee should voluntarily and in good faith make full and true disclosure of income prior to the detection of concealment by the Assessing Officer. In certain cases of genuine hardship, the penalty levied can be reduced/waived if the assessee has co-operated in any inquiry relating to the assessment and recovery of taxes. The waiver/reduction of penalties is discretionary and dependent upon the satisfaction of prescribed conditions. No assessee can, a matter of right, claim waiver or reduction of penalty imposed or imposable upon him. [Section 273A]
Office and prosecution under the income tax act. why is prosecution necessary?
In the fight against tax evasion, the imposition of monetary penalty alone is not sufficient. A calculating tax evader finds it profitable to evade tax for years, if he knows that he may get away with it by paying penalty in the year in which he is caught. However, the prospect of landing in jail is a far more dreaded consequence and works as a deterrent. Further, for more serious defaults, sometimes launching of prosecution is prescribed without prescribing monetary penalties.
The Parliament has, therefore, been enacting deterrent laws for effective implementation of tax laws. The Income-tax Act contains a separate chapter XXII wherein offenses have been defined and punishment provided.
What are the offenses punishable under the income tax act?
The following offenses committed by a person are punishable:
(i) Removal, parting with or otherwise dealing with books of accounts, documents, money, bullion, jewelry, or other valuable article or thing put under restraint during the search. [Section 275A]
(ii) Fraudulent removal, concealment, transfer or delivery of any property or any interest in the property with the intention to thwart recovery of tax. [Section 276]
(iii) Failure on the part of a liquidator or receiver of a company to give notice of his appointment to the Assessing Officer or failure to set apart amount notified by the Assessing Officer, or parting away of the company’s properties in contravention of income-tax provision. [Section 276A]
(iv) Failure to enter into a written agreement or failure to furnish the statement of immovable property intended to be transferred u/s.269UC, or failure to surrender or deliver the property u/s.269UE, purchased by the Appropriate Authority or doing or omitting to do anything u/s.269UL, which will have the effect of the transfer of property without the permission of the Appropriate Authority (under the provisions of Chapter XX-C) [Section 276AB]
(v) Failure to pay to the credit of the Central Government the tax deducted at source. [Section 276B]
(va) Failure to pay the tax collected at source. [Section 276BB]
(vi) Willful attempt to evade any tax, penalty or interest [Section 276C(1)]
(vii) Willful attempt to evade the payment of any tax, penalty or interest levied under Income Tax Act. [Section 276C(2)]
(viii) Willful failure to furnish in due time return of income. [Section 276CC)]
(viiia) Failure to furnish return of income in Search Cases as required under section 158BC [Section 276CCC]
(ix) Willful failure to produce accounts and documents as directed by issue of notice under section 142(1) [Section 276D]
(x) Willful failure to get the accounts audited as directed by the Assessing Officer under section 142(2A). [Section 276D]
(xi) Making of a statement in verification or delivery of an account or statement which is false and which the concerned person knows or believes to be false or does not believe to be true. [Section 277]
(xii) Abetting or inducing another person to make and deliver an account or statement or declaration relating to any taxable income which is false and which he either knows or believes to be false. [Section 278]
(xiii) Punishment for 2nd & subsequent offenses in cases of certain defaults. [Section 278A]
(xiv) No person shall be punished for any failure if he proves that there is reasonable cause failure. [Section 278AA].
Who is liable to be prosecuted?
Any person, committing the offense is liable to be prosecuted. In this connection, it is not necessary that the person should be an assessee under the Income-tax Act. In the case of an offense committed by a Company, Firm, Association of Persons, or Body of Individuals, every person in charge of or person responsible for the conduct of the business of the concern as well as the concern is deemed to be guilty. Similarly, in the case of an offense by a Hindu Undivided Family, the Karta thereof is deemed to be guilty of the offense.
Is mens rea or culpable mental state or guilty intention necessary?
In case of willful act of omission or commission, the court shall presume the existence of culpable mental state. However, the accused can rebut this presumption by producing necessary evidence before the court. (Section 278E).
Can the offence be compounded?
Section 279(2) of Income-tax Act empowers a Chief Commissioner of Director General of Income-tax to compound an offence either before or after the institution of prosecution proceeding.
When public servant liable to be prosecuted?
If a public servant furnishes any information in contravention of the provisions of Section 138(2), prosecution may be instituted against him with the previous sanction of the Central Government. (Section 280).
PENALTIES
Updated with Amendment made vide Finance Act, 2019 and applicable for A.Y. 2021-22 and Onwards:
| Section | Nature of default | Penalty leviable |
| (1) | (2) | (3) |
| 140A(3) | Failure to pay wholly or partly— | Such amount as Assessing Officer may impose but not exceeding tax in arrears |
| (a) self-assessment tax, or | ||
| (b) interest and fee, or | ||
| (c) both | ||
| under section 140A(1) | ||
| 158BFA(2) | Determination of undisclosed income of block period | Minimum : 100 per cent of tax leviable in respect of undisclosed income |
| Maximum : 300 per cent of tax leviable in respect of undisclosed income. | ||
| 221(1) | Default in making payment of tax | Such amount as Assessing Officer may impose but not exceeding amount of tax in arrears |
| 234E | Failure to file statement within time prescribed in section 200(3) or in proviso to section 206C(3) | Rs. 200 for every day during which failure continues but not exceeding tax deductible/collectible |
| 234F | Default in furnishing return of income within time prescribed in section 139(1) | a) Rs. 5000 if return is furnished on or before 31 December of assessment year.b) Rs. 10,000 in any other case
Note: if total income of the person does not exceeds Rs. 5 lakh then fee payable shall be Rs. 1000 |
| 234G | Fee for default in submission of statement/certificate prescribed under section 35/ Section 80G | Rs. 200 per day |
| 270A(1) | Under-reporting and misreporting of income | A sum equal to 50% of the amount of tax payable on under-reported income.However, if under-reported income is in consequence of any misreporting thereof by any person, the penalty shall be equal to 200% of the amount of tax payable on under-reported income |
| 271(1)(b) | Failure to comply with a notice under section 115WD(2)/115WE(2)/142(1) or section 143(2) or failure to comply with a direction under section 142(2A) | Fixed at Rs. 10,000 for each failure.Note:- However, the above penalty shall not be levied to and in relation to any assessment for the A.Y commencing on or after the 1st day of April, 2017. |
| 271(1)(c) | Concealment of particulars of income or fringe benefits or furnishing of inaccurate particulars of income or fringe benefits | Minimum : 100 per cent |
| Maximum : 300 per cent of tax sought to be evaded in addition to tax payable | ||
| Note: | ||
| ‘Amount of tax sought to be evaded’ shall be aggregate of tax sought to be evaded under the general provisions and the tax sought to be evaded under the provisions of MAT or AMT. However, if an amount of concealed income is considered both under the general provisions and provisions of MAT or AMT, such amount shall not be considered in computing tax sought to be evaded under provisions of MAT or AMT. Further, where provisions of MAT or AMT are not applicable, the computation of tax sought to be evaded under the provisions of MAT or AMT shall be ignored. | ||
| Note:- However, the above penalty shall not be levied to and in relation to any assessment for the A.Y commencing on or after the 1st day of April, 2017. | ||
| 271(4) | Distribution of profits by registered firm otherwise than in accordance with partnership deed and as a result of which partner has returned income below the real income | Not exceeding 150 per cent of difference between tax on partner’s income assessed and tax on income returned, in addition to tax payable |
| Note:- However, the above penalty shall not be levied to and in relation to any assessment for the A.Y commencing on or after the 1st day of April, 2017. | ||
| 271A | Failure to keep, maintain, or retain books of account, documents, etc., as required under section 44AA | Rs. 25,000 |
| 271AA(1) | (1) Failure to keep and maintain information and documents required by section 92D(1) or 92D(2) | 2% of value of each international transaction/or specified domestic transaction entered into |
| (2) Failure to report such transaction | ||
| (3) Maintaining or furnishing incorrect information or document | ||
| 271AA(2) | Failure to furnish information and document as required under Section 92D(4) | Rs. 5,00,000/- |
| 271AAA | Where search has been initiated before 1-7-2012 and undisclosed income found | 10% of undisclosed income |
| 271AAB(1) | Where search has been initiated on or after 1-7-2012 but before 15-12-2016 and undisclosed income found | (a) 10% of undisclosed income of the specified previous year if assessee admits the undisclosed income; substantiates the manner in which it was derived; and on or before the specified date pays the tax, together with interest thereon and furnishes the return of income for the specified previous year declaring such undisclosed income |
| (b) 20% of undisclosed income of the specified previous year if assessee does not admit the undisclosed income, and on or before the specified date declare such income in the return of income furnished for the specified previous year and pays the tax, together with interest thereon; | ||
| (c) 60% of undisclosed income of the specified previous year if it is not covered by (a) or (b) above | ||
| 271AAB(1A) | Where search has been initiated on or after 15-12-2016 and undisclosed income found | (a) 30% of undisclosed income of the specified previous year if assessee admits the undisclosed income; substantiates the manner in which it was derived; and on or before the specified date pays the tax, together with interest thereon and furnishes the return of income for the specified previous year declaring such undisclosed income(b) 60% of undisclosed income of the specified previous year in any other case. |
| 271AAC | Income determined by Assessing Officer includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D for any previous year. [if such income is not included by assessee in his return or tax in accordance with section 115BBE has not been paid] | 10% of tax payable under section 115BBE. |
| 271AAD | Penalty, if during any proceedings under the Act, it is found that in the books of accounts maintained by assessee, there is:a) A false entry; or
b) Any entry relevant for computation of total income of such person has been omitted to evade tax liability. |
100% of such false entries or omitted entry. |
| 271B | Failure to get accounts audited or furnish a report of audit as required under section 44AB | One-half per cent of total sales, turnover or gross receipts, etc., or Rs. 1,50,000, which-ever is less |
| 271BA | Failure to furnish a report from an accountant as required by section 92E | Rs. 1,00,000 |
| 271BB | Failure to subscribe any amount to units issued under scheme referred to in section 88A(1) | 20 per cent of such amount |
| 271C | Failure to deduct tax at source, wholly or partly, under sections 192 to 196D (Chapter XVII-B) or failure to pay wholly or partly tax u/s 115-O(2) or second proviso to section 194B | Amount equal to tax not deducted or paid |
| 271CA | Failure to collect tax at source as required under Chapter XVII-BB | Amount equal to tax not collected |
| 271D | Taking or accepting any loan or deposit or specified sum in contravention of the provisions of Section 269SS.“Specified sum” means any sum of money receivable, whether as advance or otherwise, in relation to transfer of an immovable property, whether or not the transfer takes place. | Amount equal to loan or deposit or specified sum so taken or accepted |
| 271DA | Receiving an amount of Rs. 2 lakh or more from a person in a day [section 269ST] | Amount equal to such receipt |
| 271DB | Failure to provide facility for accepting payment through prescribed electronic modes of payment as referred to in section 269SU | Rs. 5,000 rupees for every day of default |
| 271E | Repayment of any loan or deposit or specified advance otherwise than in accordance with provision of Section 269T.“Specified advance” means any sum of money in the nature of advance, by whatever name called, in relation to transfer of an immovable property, whether or not transfer takes place. | Amount equal to loan or deposit or specified advance so repaid |
| 271F | Failure to furnish return as required by section 139(1) or by its provisos before the end of the relevant assessment year | Rs. 5,000Note: Applicable upto the Assessment year 2017-18 |
| 271FA1 | Failure to furnish an annual information return as required under section 285BA(1)2 | Rs. 500 per day of default |
| 271FAA | Furnishing of inaccurate information in statement of financial transaction or reportable account | Rs. 50,000 |
| Failure to furnish annual information return within the per iod specified in notice u/s 285BA(5) | Rs. 1,000 per day of default | |
| 271FAB | Section 9A provides that fund management activity carried out by an eligible offshore investment fund through an eligible fund manager acting on behalf of such fund shall not constitute business connection in India (subject to certain conditions).The provision requires that eligible investment fund shall furnish within 90 days from the end of the financial year a statement, in respect of its activities in a financial year, in the prescribed form containing information relating to fulfilment of specified conditions and such other information or documents as may be prescribed. Penalty to be levied if investment fund failed to comply with the requirement. | Rs. 5,00,000 |
| 271FB | Failure by an employer to furnish the return of fringe benefits as required under section 115WD(1) | Rs. 100 for every day of default |
| 271G(Refer Note-3) | Failure to furnish any information or document as required by section 92D(3) | 2% of the value of the international transaction/specified domestic transaction for each failure |
| 271GA | Section 285A provides for reporting by an Indian concern if following two conditions are satisfied:a) Shares or interest in a foreign company or entity derive substantial value, directly or indirectly, from assets located in India; and
b) Such foreign company or entity holds such assets in India through or in such Indian concern. In this case, the Indian entity shall furnish the prescribed information for the purpose of determination of any income accruing or arising in India under Section 9(1)(i). In case of any failure, the Indian concern shall be liable to pay penalty. |
Penalty shall be:a) a sum equal to 2% of value of transaction in respect of which such failure has taken place, if such transaction had effect of, directly or indirectly, transferring right of management or control in relation to the Indian concern;
b) a sum of Rs. 5,000 in any other case. |
| 271GB(1) | Failure to furnish report under section 286(2) | Rs. 5,000 per day upto 30 days and Rs. 15,000 per day beyond 30 days |
| 271GB(2) | Failure to produce the information and documents within the period allowed under section 271GB(6) | Rs. 5,000 for every day during which the failure continues. |
| 271GB(3) | Failure to furnish report or failure to produce information/documents under section 286 even after serving order under section 271GB(1) or 271GB(2) | Rs. 50,000 for every day for which such failure continues beginning from the date of serving such order. |
| 271GB(4) | Failure to inform about inaccuracy in report furnish under section 286(2)Or furnishing of inaccurate information or document in response to notice issued under section 286(6). | Rs. 5,00,000 |
| 271H(Refer Note-4) | Failure to deliver/cause to be delivered a statement within the time prescribed in section 200(3) or the proviso to section 206C(3), or furnishes incorrect information in the statement | W.e.f. 1-10-2014 Assessing Officer may direct payment of penalty. Penalty shall not be less than Rs. 10,000 but may extend to Rs. 1,00,000 |
| 271K | Penalty of default in submission of statement/certificate prescribed under section 35/Section 80G | Rs. 10,000 to Rs. 1 lakh |
| 271-I | As per section 195(6) of the Act, any person responsible for paying to a non-resident or to a foreign company, any sum (whether or not chargeable to tax), shall furnish the information relating to such payment in Form 15CA and 15CB. Penalty shall be levied in case of any failure. | Rs. 1,00,000 |
| 271J | Furnished incorrect information in any report or certificate by an accountant or a merchant banker or a registered valuer | Rs. 10,000 for each incorrect report or certificate |
| 272A(1) | Refusal or failure to : | Rs. 10,000 for each failure/default |
| (a) answer questions | ||
| (b) sign statement | ||
| (c) attend to give evidence or produce books of account, etc., in compliance with summons under section 131(1) | ||
| (d) comply with notice u/s 142(1), 143(2) or failure to comply with direction issued u/s 142(2A). | ||
| 272A(2) | Failure to : | |
| (a) furnish requisite information in respect of securities as required under section 94(6) ; | Rs. 10,000 for each failure/default. (In respect of penalty for failure, in relation to a declaration mentioned in section 197A, a certificate as required by section 203 and returns u/s s 206 and 206C and statements under Section 200(2A) or section 200(3) or proviso to section 206C(3) or section 206C(3A), penalty shall not exceed amount of tax deductible or collectible) | |
| (b) give notice of discontinuance of business or profession as required under section 176(3) ; | ||
| (c) furnish in due time returns, statements or certificates, deliver de-claration, allow inspection, etc., under sections 133, 134, 139(4A), 139(4C), 192(2C), 197A, 203, 206, 206C, 206C(1A) and 285B; | ||
| (d) deduct and pay tax under section 226(2) | ||
| (e) file a copy of the prescribed statement within the time specified in section 200(3) or the proviso to section 206C(3) (up to 1-7-2012) | ||
| (f) file the prescribed statement within the time specified in section 206A(1) | ||
| (g) Failure to deliver or cause to be delivered a statement under Section 200(2A) or Section 206C(3A) within prescribed time.With effect from June 1, 2015, it is mandatory for an office of the Government, paying TDS or TCS, as the case may be, without production of a challan, to deliver a statement in the prescribed form and manner to the prescribed authority. | ||
| 272AA(1) | Failure to comply with section 133B | Not exceeding Rs. 1,000 |
| 272B | Failure to comply with provisions relating to PAN or Aadhaar as referred to in section 139A/139A(5)(c)/(5A)/(5C) | Rs. 10,000 for each default |
| 272BB(1) | Failure to comply with section 203A | Rs. 10,000 for each failure/default |
| 272BB(1A) | Quoting false tax deduction account number/tax collection account number/tax deduction and collection account number in challans/certificates/statements/documents referred to in section 203A(2) | Rs. 10,000 |
Note : No penalty is imposable for any failure under sections 271(1)(b), 271A, 271AA, 271B, 271BA, 271BB, 271C, 271CA, 271D, 271E, 271F, 271FA, 271FAB, 271FB, 271G, 271GA, 271GB, 271H, 271-I, 272A(1)(c) or (d), 272A(2), 272AA(1), 272B, 272BB(1), 272BB(1A), 272BBB(1), 273(1)(b), 273(2)(b) and 273(2)(c) if the person or assessee proves that there was reasonable cause for such failure (section 273B).
Section 273AA provides that a person may make application to the Principal Commissioner/Commissioner for granting immunity from penalty, if (a) he has made an application for settlement under section 245C and the proceedings for settlement have abated; and (b) penalty proceeding have been initiated under this Act. The application shall not be made after the imposition of penalty after abatement.
OFFENCES AND PROSECUTIONS
| Section | Nature of default | Punishment (rigorous imprisonment) | Fine |
| (1) | (2) | (3) | (4) |
| 275A | Contravention of order made under section 132(1) (Second Proviso) or 132(3) in case of search and seizure | Up to 2 years | No limit |
| 275B | Failure to afford necessary facility to authorised officer to inspect books of account or other documents as required under section 132(1)(iib) | Up to 2 years | No limit |
| 276 | Removal, concealment, transfer or delivery of property to thwart tax recovery | Up to 2 years | No limit |
| 276A | Failure to comply with provisions of section 178(1) and (3) re : company in liquidation | 6 months to 2 years | — |
| 276AB | Failure to comply with provisions of sections 269UC, 269UE and 269UL re : purchase of properties by Government(Refer Note-5) | 6 months to 2 years | No limit |
| 276B | Failure to pay to credit of Central Government (i) tax deducted at source under Chapter XVII-B (non-cognizable offence under section 279A), or (ii) tax payable u/s 115-O(2) or second proviso to section 194B | 3 months to 7 years | No limit |
| 276BB | Failure to pay the tax collected under the provisions of section 206C | 3 months to 7 years | No limit |
| 276C(1) | Wilful attempt to evade tax, penalty or interest or under-reporting of Income (non-cognizable offence under section 279A)— | ||
| (a) where tax sought to be evaded exceeds Rs. 1 lakh (Rs. 25 lakh w.e.f. 1-7-2012) | 6 months to 7 years | No limit | |
| (b) in other cases | 3 months to 3 years (2 years w.e.f. 1-7-2012) | No limit | |
| 276C(2) | Wilful attempt to evade payment of any tax, penalty or interest (non-cognizable offence under section 279A) | 3 months to 3 years (2 years w.e.f. 1-7-2012) | No limit |
| 276CC | Wilful failure to furnish returns of fringe benefits under section 115WD/115WH or return of income under section 139(1) or in response to notice under section 142(1)(i) or section 148 or section 153A (non-cognizable offence under section 279A)— | ||
| (a) where tax sought to be evaded exceeds Rs. 1 lakh (Rs. 25 lakh w.e.f. 1-7-2012) | 6 months to 7 years | No limit | |
| (b) in other casesNote : *** A person shall not be liable to be prosecuted under this section if he furnishes the return before expiry of assessment year or the tax payable by such person, not being a company, as reduced by the advance tax self-assessment tax paid before expiry of the assessment year, TDS and TCS, does not exceed Rs. 10,000. | 3 months to 3 years (2 years w.e.f. 1-7-2012) | No limit | |
| 276CCC | Wilful failure to furnish in due time return of total income required to be furnished by notice u/s 158BC(a) | 3 months to 3 years | No limit |
| 276D(Refer Note-6) | Wilful failure to produce accounts and documents under section 142(1) or to comply with a notice under section 142(2A) | Up to 1 year | (Refer Note-7)Rs. 4 to Rs. 10 for every day of default |
| 277 | False statement in verification or delivery of false account, etc. (non-cognizable offence under section 279A) | ||
| (a) where tax sought to be evaded exceeds Rs. 1 lakh (Rs. 25 lakh w.e.f. 1-7-2012) | 6 months to 7 years | No limit | |
| (b) in other cases | 3 months to 3 years (2 years w.e.f. 1-7-2012) | No limit | |
| 277A | Falsification of books of account or document, etc., to enable any other person to evade any tax, penalty or interest chargeable/leviable under the Act | 3 months to 3 years (2 years w.e.f. 1-7-2012) | No limit |
| 278 | Abetment of false return, account, statement or declaration relating to any income or fringe benefits chargeable to tax (non-cognizable offence under section 279A) | ||
| (a) where tax, penalty or interest sought to be evaded exceeds Rs. 1 lakh (Rs. 25 lakh w.e.f. 1-7-2012) | 6 months to 7 years | No limit | |
| (b) in other cases | 3 months to 3 years (2 years w.e.f. 1-7-2012) | No limit | |
| 278A | Second and subsequent offences under section 276B, 276C(1), 276CC, 277 or 278 | 6 months to 7 years | No limit |
| 280(1) | Disclosure of particulars by public servants in contravention of section 138(2) [Prosecution to be instituted with previous sanction of Central Government under section 280(2)] | Up to 6 months (simple/rigorous) | No limit |
Notes :
1. No person is punishable for any failure under section 276A, 276ABor 276Bif he proves that there was reasonable cause for such failure (vide section 278AA).
2. (a) Prosecution for offences under section 275A, section 275B, section 276, section 276A, section 276B, section 276BB, section 276C, section 276CC, section 276D, section 277, section 277Aand section 278to be instituted with previous sanction of Principal Director General/Principal Chief Commissioner/Principal Commissioner/Director General/Chief Commissioner/Commissioner, except where prosecution is at the instance of the Commissioner (Appeals) or the appropriate authority (vide section 279).
(b) The offences under Chapter XXII can be compounded (either before or after the institution of proceedings) by Principal Director General/Director General or Principal Chief Commissioner/Chief Commissioner.
3. Where an offence under this Act has been committed by a person, being a company, and the punishment for such offence is imprisonment and fine, then, such company shall be punished with fine and every person, referred to in sub-section (1) of section 278B, or the director, manager, secretary or other officer of the company referred to in sub-section (2) of section 278Bshall be liable to be proceeded against and punished in accordance with the provisions of this Act.
4. With effect from 1-4-2008 under section 278ABa person may apply to the Principal Commissioner/Commissioner for granting immunity from prosecution, if he has applied for settlement under section 245Cand the proceedings have abated under section 245HA. The application shall not be made after institution of prosecution proceedings after abatement.
Notes:-
1. With effect from assessment year 2015-16 “annual information return” has been changed to “statement of financial transaction or reportable account” and word “return” has been changed to “statement”.
2. With effect from assessment year 2015-16 a new section 271FAA has been inserted to provide for a penalty of Rs. 50,000 for furnishing inaccurate statement of financial transaction or reportable account in certain cases.
3. With effect from 1-10-2014 TPO can also levy penalty.
4. Section 271H as amended with effect from 1-10-2014 provides that penalty shall be levied by Assessing Officer.
5. Non-operative with effect from 1-7-2002.
6. With effect from October 1, 2014, if a person wilfully fails to produce accounts and documents as stated or wilfully fails to comply with the direction given, he shall be punishable with rigorous imprisonment for a term which may extend to one year and with fine (quantum of fine has not been specified).
7. No limit w.e.f. 1-10-2014.
[As Amended by Finance Act, 2020]
