Failure to furnish returns, comply with notices, concealment of income, etc.
Failure to furnish returns, comply with notices, concealment of income, etc.
271. (1) If the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceedings under this Act, is satisfied that any person—
(a) has without reasonable cause 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 without reasonable cause 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
*(b) has without reasonable cause failed to comply with a notice under sub-section (1) of section 142 or sub-section (2) of section 143, or
(c) has concealed the particulars of his income or furnished inaccurate particulars of such income,
he may direct that such person shall pay by way of penalty,—
1[*(i) in the cases referred to in clause (a), 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, but not exceeding in the aggregate fifty per cent of the assessed tax.
Explanation : In this clause, "assessed tax" means tax as reduced by the sum, if any, deducted at source under Chapter XVIIB or paid in advance under Chapter XVIIC ;]
(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 ;
†(iii) in the cases referred to in cl (c), in addition to any tax payable by him, a sum which shall not less than, but which shall not exceed twice, the amount of the income in respect of which the particulars have been concealed or inaccurate particulars have been furnished.
†Explanation : Where the total income returned by any person is less than eighty per cent of the total income (hereinafter in this Explanation referred to as the correct income) as assessed under section 143 or section 144 or section 147 (reduced by the expenditure incurred bona fide by him for the purpose of making or earning any income included in the total income but which has been disallowed as deduction), such person shall, unless he proves that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income for the purposes of clause (c) of this sub-section.
(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, notwith- standing anything contained in the other provisions of this Act, the penalty imposable under sub-section (1) shall be the same amount as would be impo- sable on that firm if that firm were an unregistered firm.
(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.
(4) If the Income-tax Officer or the Appellate Assistant Commissioner, 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 b*** correct income ; and no refund or other adjustment shall be claimable by any other partner by reason of such direction.
†(4A) Notwithstanding anything contained in clause (i) or clause (iii) of sub-section (1), the Commissioner may, in his discretion—
(i) reduce or waive the amount of minimum penalty imposable on a person under clause (i) of sub-section (1) for failure, without reasonable cause, to furnish the return of total income which such person was required to furnish under sub-section (1) of section 139, or
(ii) reduce or waive the amount of minimum penalty imposable on a person under clause (iii) of sub-section (1), if he is satisfied that such person—
(a) in the case referred to in clause (i) of this sub-section has, prior to the issue of notice to him under sub-section (2) of section 139, voluntarily and in good faith, made full disclosure of his income ; and in the case referred to in clause (ii) of this sub-section has, prior to the detection by the Income-tax Officer, of the conceal- ment of particulars of income in respect of which the penalty is imposable, or of the inaccuracy of particulars furnished in respect of such income, voluntarily and in good faith, made full and true disclosure of such particulars ;
(b) has co-operated in any enquiry relating to the assessment of such income ; and
(c) has either paid or made satisfactory arrangements for payment of any tax or interest payable in consequence of an order passed under this Act in respect of the relevant assessment year :
1[Provided that—
(i) if in a case the minimum penalty imposable under clause (i) of sub- section (1) for the relevant assessment year, or, where such disclosure relates to more than one assessment year, the aggregate of the mini- mum penalty imposable under the said clause for those years, exceeds a sum of fifty thousand rupees,
(ii) if in a case falling under clause (c) of sub-section (1), the amount ot income in respect of which penalty is imposable for the relevant assess- ment 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 shall be made by the Commissioner unless the previous approval of the Board has been obtained.]
†(4B) An order under sub-section (4A) shall be final and shall not be called in question before any court of law or any other authority.
1. Substituted by the Direct Taxes (Amendment) Act, 1974 with retrospective effect from 1-4-1962. The Amending Act has clarified by an independent section 22 that the amendment will not apply in the case of an assessee in whose case the Supreme Court has, on an appeal, held before 3-9-1973 that such penalty is to be calculated with reference to the income-tax payable by him in accordance with the notice of demand.
* Cl. (b) and cl. (i) of sub-sec. (1) of sec. 271 are proposed to be substituted by the Taxation Laws (Amendment) Bill, 1973, as reported by the Select Committee. For text see cl. 61(i) (a) and (b) of the Bill.
† Cl.(iii) of sub-sec. (1) and Explanation to sub-sec. (1) of sec. 271 are proposed to be amended by way of substitution and insertion by the Taxation Laws (Amendment) Bill, 1973, as reported by the Select Committee. For text see cl. 61 (i)(c) of the Bill.
* New sub-sec. (1A) and cl. (d) of sub-sec. (3) of sec. 271 are proposed to be inserted by the Taxation Laws (Amendment) Bill, 1973. For text see cl. 61 (ii) and (iii) of the Bill.
1. Substituted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971.
† Sub-secs. (4A) and (4B) are proposed to be omitted by the Taxation Laws (Amendment) Bill, 1973, as reported by the Select Committee. See cl. 61 (iv) of the Bill.
* New sec. 271A is proposed to be inserted by the Taxation Laws (Amendment) Bill, 1973. For text see cl. 62 of the Bill.
[As amended by the Finance Act, 1975 and by the Finance Act, 1974]