The various defaults in respect of which Penalty can be imposed by the Income Tax Department are summaries in details.
(1) Penalty where search has been initiated on or after 15.12.2016 [Section 271AAB(1A)]
The Assessing Officer may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under section 132 on or after the date on which the Taxation Laws (Second Amendment) Bill, 2016 receives the assent of the President, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him,—
(a) a sum computed 30% of the undisclosed income of the specified previous year, if the assessee—
(i) in the course of the search, in a statement under sub-section (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived:
(ii) substantiates the manner in which the undisclosed income was derived; and (iii) on or before the specified date—
(A) pays the tax, together with interest, if any, in respect of the undisclosed income: and
(B) furnishes the return of income for the specified previous year declaring such undisclosed income therein;
(b) a sum computed @ 60% of the undisclosed income of the specified previous year, if it is not covered under the provisions of clause (a).
Where penalty is levied under section 271AAB(1) or (1A), penalty under section 270 or section 271(1)(c)shall not be levied. [Section 27IAAB(2)]
(2) Penalty in respect of certain Income [Section 271AAC]
(i) The Assessing Officer may, notwithstanding anything contained in this Act other than the provisions of section 271AAB. direct that, in a case where the income determined includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D for any previous year, the assessee shall pay by way of penalty, in addition to tax payable under section 115BBE, a sum computed at the rate of 10% of the tax payable under section 115BBE(1)(i):
However, no penalty shall be levied in respect of income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D to the extent such income has been included by the assessee in the return of income furnished under section 139 and the tax in accordance with the provisions of section 115BBE(1)(i) has been paid on or before the end of the relevant previous year.
(ii) No penalty under the provisions of section 270A shall be imposed upon the assessee in respect of the income referred to in section 271AAC(1).
(iii) The provisions of sections 274 and 275 shall, as far as may be, apply in relation to the penalty referred to in this section.
2. Penalty for False Entry or Omitted Entry, etc. in Books of Account [Section 271AAD]
Without prejudice to any other provisions of this Act, if during any proceeding under this Act, it is found that in the books of account maintained by any person there is—
(i) a false entry; or
(ii) an omission of any entry which is relevant for computation of total income of such person, to evade tax liability,
the Assessing Officer may direct that such person shall pay by way of penalty a sum equal to the aggregate amount of such false or omitted entry.
(3) [Section 271H]-Penalty for Failure to Furnish Statements, etc.
(i) [Section 271H(1)]-Penalty for failure to furnish TDS / TCS statement or furnishing incorrect information in the statement:
Without prejudice to the provisions of the Act, a person shall be liable to pay penalty, if, he—
(a) fails to deliver or cause to be delivered a statement within the time prescribed in section 200(3) or the proviso to section 206C(3) relating to TCS; or
(b) furnishes incorrect information in the statement which is required to be delivered or cause to be delivered under section 200(3) or the proviso to section 206C(3).
(ii) [Section 271H(2)]-Quantum of Penalty:
The penalty referred to in sub-section (1) shall be a sum which shall not be less than Rs. 10.000 but which may extend to Rs. 1,00,000.
(iii) [Section 271H(3)]-No penalty if statement of TDS / TCS filed within one year:
Notwithstanding anything contained in the foregoing provisions of this section, no penalty shall be levied for the failure to file TDSITCS statement within the time prescribed, if the person proves that after paying tax deducted or collected along with the fee and interest, if any, to the credit of the Central Government, he had delivered or caused to be delivered the statement referred to in section 200(3) or the proviso to section 206C(3) before the expiry of a period of one year from the time prescribed for delivering or causing to be delivered such statement.
(iv) Penalty applicable only for tax deducted / collected on or after 1.7.2012:
The provisions of this section shall apply to a statement referred to in section 200(3) or the proviso to section 206C(3) which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after 1.7.20 12.
(4) [Section 271DA]-Penalty for Failure to comply with Provisions of Section 269ST
If a person receives any sum in contravention of the provisions of section 269ST, he shall be liable to pay, by way of penalty, a sum equal to the amount of such receipt:
However, no penalty shall be imposable if such person proves that there were good and sufficient reasons for the contravention.
Any penalty imposable under section 271DA shall be imposed by the Joint Commissioner.
(5) [Section 269SU, 271DB]-Mandating acceptance of payments through prescribed electronic modes
Every person, carrying on business, shall, provide facility for accepting payment through the prescribed electronic modes, in addition to the facility for other electronic modes of payment, if an, being provided b such person. if his total sales, turnover or gross receipts in business exceeds Rs. 50 Crore during the immediately preceding previous year.
In order to ensure compliance of the aforesaid provisions, new section 271DB to provides that the failure to provide facility for electronic modes of payment prescribed under section 269SU shall attract penalty of a sum of Rs. 5,000, for every day during which such failure continues. However, the penalty shall not be imposed if the person proves that there were good and sufficient reasons for such failure. Any such penalty shall be imposed by the Joint Commissioner.
Further, it is proposed to make a consequential amendment in the Payment and Settlement Systems Act, 2007 so as to provide that no bank or system provider shall impose any charge upon anyone, either directly or indirectly, for using the modes of electronic payment prescribed under section 269SU of the Income-tax Act.
(6) [Section 271J]- Penalty for furnishing incorrect information in Reports or Certificates
Without prejudice to the provisions of this Act, where the Assessing Officer or the Commissioner (Appeals), in the course of any proceedings under this Act, finds that:
— an accountant or
— a merchant banker or
— a registered valuer
has furnished incorrect information in any report or certificate furnished under any provision of this Act or the rules made thereunder, the Assessing Officer or the Commissioner (Appeals) may direct that such accountant or merchant banker or registered valuer, as the case may be, shall pay, by way of penalty, a sum of Rs. 10,000 for each such report or certificate.
(7) Procedure for imposing Penalty [Section 274]
(1) Opportunity of being heard [Section 2 74(1)]:
No order imposing a penalty under this Chapter shall be made unless the assessee has been heard, or has been given a reasonable opportunity of being heard.
(2) Penalty to be levied with prior approval of Joint commissioner in certain cases [Section 274(2)]:
No order imposing a penalty under this Chapter shall be made:
(a) by the Income-tax Officer, where the penalty exceeds Rs. 10,000;
(b) by the Assistant Commissioner/Deputy Commissioner, where the penalty exceeds Rs. 20,000, except with the prior approval of the Joint Commissioner.
(3) Copy of penally order to be sent to Assessing Officer [Section 274(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.
(4) Penalty on the basis of law on the date of default:
The quantum of penalty is to be determined in accordance with the law prevailing on the date of default and not the date on which penalty is imposed.