Penalty under section 272A is levied if a taxpayer fails to comply with notice issued to him under section 142(1) or section 143(2) or fails to comply with adirection issued under section 142(2A). Before understanding the penalty provisions of section 272A we shall take a brief overview of provisions of section 142(1), 142(2A) and section 143(2).
Under section 142(1), the Assessing Officer can issue notice asking the taxpayer
to file the return of income if he has not filed the return of income or to produce or cause to be produced such accounts or documents as he may require or
to furnish in writing and verified in the prescribed manner, information in such form and on such points or matters (including a statement of all assets and liabilities of the taxpayer, whether included in the accounts or not) as he may require.
Section 142(2A) deals with special audit. As per section 142(2A), if the conditions justifying special audit as given in section 142(2A) are satisfied, then the Assessing Officer can direct the taxpayer to get his accounts audited or re-audited from a chartered accountant nominated by the Principal Chief Commissioner or Chief Commissioner or PrincipalCommissioner or Commissioner.
Section 143(2) deals with the provisions relating to the issuance of notice before conducting a scrutiny assessment under section 143(3).
If the taxpayer fails to comply with notice issued to him under section 142(1) or section 143(2) or fails to comply with adirection issued under section 142(2A), then as per section 272A he shall be liable for a penalty of Rs. 10,000 for each failure.