law: The Income-Tax Act, 1961
  1[271. Failure to furnish returns, comply with notices, concealment of income, etc.-
  (1) If the 2[Assessing Officer] or the 3*** 4[Commissioner (Appeals)] 5[or the 6[Principal Commissioner or Commissioner]] in the course of any proceedings under this Act, is satisfied that any person-
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  (b) has 8*** failed to comply with a notice 9[under sub-section (2) of section 115WD or under sub-section (2) of section 115WE or under sub-section (1) of section 142] or sub-section (2) of section 143 10[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 11*** furnished inaccurate particulars of 12[such income, or]
  13[(d) has concealed the particulars of the fringe benefits or furnished inaccurate particulars of such fringe benefits,] he may direct that such person shall pay by way of penalty,-
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  15[(ii) in the cases referred to in clause (b), 16[in addition to tax, if any, payable] by him, 17[a sum of ten thousand rupees] for each such failure;]
  18[(iii) in the cases referred to in 19[clause (c) or clause (d)], 16[in addition to tax, if any, payable] by him, a sum which shall not be less than, but which shall not exceed 20[three times], the amount of tax sought to be evaded by reason of the concealment of particulars of his 21[income or fringe benefits] or the furnishing of inaccurate particulars of such 21[income or fringe benefits].
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  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 2[Assessing Officer] or the 3*** 4[Commissioner (Appeals)] 5[or the 6[Principal Commissioner or Commissioner]] to be false, or
  (B) such person offers an explanation which he is 1[not able to substantiate 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.
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  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.
  3[Explanation 3.-Where any person 4*** 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 subsection (1) of section 142 or section 148 and the Assessing Officer or the 5*** 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.]
  6[Explanation 4.-For the purposes of clause (iii) of this sub-section,-
  (a) the amount of tax sought to be evaded shall be determined in accordance with the following formula-
  (A - B) + (C - D)
  where,
  A = amount of tax on the total income assessed as per the provisions other than the provisions contained in section 115Jb or section 115JC (herein called general provisions);
  B = amount of tax that would have been chargeable had the total income assessed as per the general provisions been reduced by the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished;
  C = amount of tax on the total income assessed as per the provisions contained in section 115JB or section 115JC;
  D = amount of tax that would have been chargeable had the total income assessed as per the provisions contained in section 115JB or section 115JC been reduced by the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished:
  Provided that where the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished on any issue is considered both under the provisions contained in section 115JB or section 115JC and under general provisions, such amount shall not be reduced from total income assessed while determining the amount under item D:
  Provided further that in a case where the provisions contained in section 115JB or section 115JC are not applicable, the item (C - D) in the formula shall be ignored;
  (b) where in any case the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished has the effect of reducing the loss declared in the return or converting that loss into income, the amount of tax sought to be evaded shall be determined in accordance with the formula specified in clause (a) with the modification that the amount to be determined for item (A - B) in that formula shall be the amount of 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;
  (c) where in any case to which Explanation 3 applies, the amount of tax sought to be evaded shall be the tax on the total income assessed as reduced by the amount of advance tax, tax deducted at source, tax collected at source and self-assessment tax paid before the issue of notice under section 148.]]
  1[Explanation 5.-Where in the course of a 2[search initiated under section 132 before the 1st day of June, 2007], 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, 3[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 1[2[Principal Chief Commissioner or Chief Commissioner] or 3[Principal 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 4*** 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.]
  5[Explanation 5A.-Where, in the course of a search initiated under section 132 on or after the 1st day of June, 2007, the assessee is found to be the owner of-
  (i) 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 for any previous year; or
  (ii) any income based on any entry in any books of account or other documents or transactions and he claims that such entry in the books of account or other documents or transactions represents his income (wholly or in part) for any previous year, which has ended before the date of search and,-
  (a) where the return of income for such previous year has been furnished before the said date but such income has not been declared therein; or
  (b) the due date for filing the return of income for such previous year has expired but the assessee has not filed the return, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of 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.]
  6[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.]
  7[Explanation 7.-Where in the case of an assessee who has entered into an 8[international transaction or specified domestic 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) 9[or the 3[Principal Commissioner or Commissioner]] 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.]
  1[(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[(1B) Where any amount is added or disallowed in computing the total income or loss of an assessee in any order of assessment or reassessment and the said order contains a direction for initiation of penalty proceedings under clause (c) of sub-section (1), such an order of assessment or reassessment shall be deemed to constitute satisfaction of the Assessing Officer for initiation of the penalty proceedings under the said clause (c).]
  (2) When the person liable to penalty is a registered firm or an unregistered firm which has been assessed under 3[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.
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  (4) If the 5[Assessing Officer] or the 6[*** 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.
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  8[(5) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1989 (3 of 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.]
  9[(6) Any reference in this section to the income shall be construed as a reference to the income or fringe benefits, as the case may be, and the provisions of this section shall, as far as may be, apply in relation to any assessment in respect of fringe benefits also.]
  10[(7) The provisions of this section shall not apply to and in relation to any assessment for the assessment year commencing on or after the 1st day of April, 2017.]
  1. Restored by Act 3 of 1989, s. 95 (w.e.f. 1-4-1989).
  2. Subs. by Act 4 of 1988, s. 2, for "Income-tax Officer" (w.e.f. 1-4-1988).
  3. The words "Deputy Commissioner (Appeals) or the" omitted by Act 21 of 1998, s. 65 (w.e.f. 1-10-1998).
  4. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978).
  5. Ins. by Act 20 of 2002, s. 101 (w.e.f. 1-6-2002).
  6. Subs. by Act 25 of 2014, s. 4, for "Commissioner" (w.r.e.f. 1-6-2013).
  7. Clause (a) omitted by Act 3 of 1989, s. 50 (w.e.f. 1-4-1989).
  8. The words "without reasonable cause" omitted by Act 46 of 1986, s. 19 (w.e.f. 10-9-1986).
  9. Subs. by Act 18 of 2005, s. 58, for "under sub-section (1) of section 142" (w.e.f. 1-4-2006).
  10. Ins. by Act 41 of 1975, s. 61 (w.e.f 1-4-1976).
  11. The word "deliberately" omitted by Act 5 of 1964, s. 40 (w.e.f. 1-4-1964).
  12. Subs. by Act 18 of 2005, s. 58, for "such income" (w.e.f. 1-4-2006).
  13. Ins. by s. 58, ibid. (w.e.f. 1-4-2006).
  14. Clause (i) omitted by Act 3 of 1989, s. 50 (w.e.f. 1-4-1989).
  15. Subs. by s. 50, ibid., for clause (ii) (w.e.f. 1-4-1989).
  16. Subs. by Act 20 of 2002, s. 101, for "in addition to any tax payable" (w.e.f. 1-4-2003).
  17. Subs. by Act 14 of 2001. s. 86, for "a sum which shall not be less than one thousand rupees but which may extend to twenty-five thousand rupee" (w.e.f 1-6-2001).
  18. Subs. by Act 41 of 1975, s. 61, for clause (iii) and the Explanation (w.e.f. 1-4-1976).
  19. Subs. by Act 18 of 2005, s. 58, for "clause (c)" (w.e.f. 1-4-2006).
  20. Subs. by Act 3 of 1989, s. 50, for "twice" (w.e.f. 1-4-1989).
  21. Subs. by Act 18 of 2005, s. 58, for "income' (w.e.f. 1-4-2006).
  22. The proviso omitted by Act 3 of 1989, s. 50 (w.e.f. 1-4-1989).
  1. Subs. by Act 46 of 1986, s. 19, for "not able to substantiate," (w.e.f. 10-9-1986).
  2. The proviso omitted by s. 19, ibid. (w.e.f. 10-9-1986).
  3. Subs. by Act 3 of 1989, s. 50, for the Explanation (w.e.f. 1-4-1989). Earlier Explanation 3 amended by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978).
  4. The words "who has not previously been assessed under this Act,' omitted by Act 20 of 2002, s. 101 (w.e.f. 1-4-2003).
  5. The words "Deputy Commissioner (Appeals) or the" omitted by Act 21 of 1998, s. 65 (w.e.f. 1-10-1998).
  6. Subs. by Act 20 of 2015, s. 70, for Explanation 4 (w.e.f. 1-4-2016).
  1. Ins. by Act 67 of 1984, s. 48 (w.e.f. 1-10-1984).
  2. Subs. by Act 22 of 2007, s.76, for "search under section 132" (w.e.f. 1-6-2007).
  3. Subs. by Act 46 of 1986, s. 19, for certain words (w.e.f. 10-9-1986).
  1. Subs. by Act 4 of 1988, s. 2, for "Commissioner" (w.e.f. 1-4-1988).
  2. Subs. by Act 25 of 2014, s. 4, for "Chief Commissioner" (w.r.e.f. 1-6-2013).
  3. Subs. by s. 4, ibid., for "Commissioner" (w.r.e.f. 1-6-2013).
  4. The words, brackets and letters "clause (a) or clause (b) of" omitted by Act 3 of 1989, s. 50 (w.e.f. 1-4-1989).
  5. Subs. by Act 33 of 2009, s. 74, for "Explanation 5A" (w.r.e.f. 1-6-2007). Earlier it was inserted by Act 22 of 2007, s. 76 (w.e.f. 1-6-2007 ).
  6. Ins. by Act 3 of 1989, s. 50 (w.e.f. 1-4-1989).
  7. Ins. by Act 14 of 2001, s. 86 (w.e.f. 1-4-2002).
  8. Subs. by Act 23 of 2012, s. 97, for the words "International transaction" (w.e.f. 1-4-2013).
  9. Ins. by Act 20 of 2002, s. 101 (w.e.f. 1-6-2002).
  1. Ins. by Act 41 of 1975, s. 61 (w.e.f. 1-4-1976).
  2. Ins. by Act 18 of 2008, s. 52 (w.e.f. 1-4-1989).
  3. Now Section 183 omitted by Act 18 of 1992, s. 65 (1-4-1993).
  4. Sub-section (3) omitted by Act 3 of 1989, s. 50 (w.e.f. 1-4-1989). Earlier it was amended by Act 41 of 1975, s. 61 (w.e.f. 1-4-1976).
  5. Subs. by Act 4 of 1988, s. 2, for "Income-tax Officer" (w.e.f. 1-4-1988).
  6. The words and brackets "Deputy Commissioner (Appeals) or, as the case may be, the" omitted by Act 21 of 1998, s. 65 (w.e.f. 1-10-1998). Earlier "Deputy Commissioner (Appeals)" was substituted for "Appellate Assistant Commissioner" by Act 4 of 1988, s. 2 (w.e.f. 1-4-1988) and the words and brackets "or, as the case may be, the Commissioner (Appeals)" were inserted by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978).
  7. Sub-sections (4A) and (4B) omitted by Act 41 of 1975, s. 61 (w.e.f. 1-10-1975). Earlier the said sub-sections was inserted by Act 1 of 1965, s. 3 (w.e.f. 12-3-1965) and later on sub-section (4A) was substituted by Act 42 of 1970, s. 48 (w.e.f. 1-4-1971).]
  8. Ins. by Act 3 of 1989, s. 50 (w.e.f.1-4-1989).
  9. Ins. by Act 18 of 2005, s. 58 (w.e.f. 1-4-2006).
  10. Ins. by Act 28 of 2016, s. 100 (w.e.f. 1-4-2017).
  1[271A. Failure to keep, maintain or retain books of account, documents, etc.-
  Without prejudice to the provisions of 2[section 270A or] section 271, if any person 3*** 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 4[Assessing Officer] or the 5[*** Commissioner (Appeals)] may direct that such person shall pay, by way of penalty, 6[ a sum of twenty-five thousand rupees].]
  1. Ins. by Act 41 of 1975, s. 62 (w.e.f. 1-4-1976).
  2. Ins. by Act 28 of 2016, s. 101 (w.e.f. 1-4-2017).
  3. The words ", without reasonable cause," omitted by Act 46 of 1986, s. 20 (w.e.f. 10-9-1986).
  4. Subs. by Act 4 of 1988, s. 2, for "Income-tax Officer" (w.e.f. 1-4-1988).
  5. The words and brackets "Deputy Commissioner (Appeals) or the" omitted by Act 21 of 1998, s. 65 (w.e.f. 1-10-1998). which was substituted as "Deputy Commissioner (Appeals)" for "Appellate Assistant Commissioner" by Act 4 of 1988, s. 2 (w.e.f. 1-4-1988) and the words and brackets "or the Commissioner (Appeals)" were inserted after "Appellate Assistant Commissioner" by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 1-4-1977).
  6. Subs. by Act 14 of 2001, s. 87, for "a sum which shall not be less than two thousand rupees but which may extend to one hundred thousand rupees" (w.e.f. 1-6-2001).
  7[271AA. Penalty for failure to keep and maintain information and document, etc., in respect of certain transactions.-
  8[(1)] Without prejudice to the provisions of 9[section 270A or] section 271 or section 271BA, if any person in respect of an 10[international transaction or specified domestic transaction],-
  (i) fails to keep and maintain any such information and document as required by sub-section (1) or sub-section (2) of section 92D;
  (ii) fails to report such transaction which he is required to do so; or
  (iii) maintains or furnishes an incorrect information or document, 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 10[international transaction or specified domestic transaction] entered into by such person.]
  9[(2) If any person fails to furnish the information and the document as required under sub-section (4) of section 92D, the prescribed income-tax authority referred to in the said sub-section may direct that such person shall pay, by way of penalty, a sum of five hundred thousand rupees.]
  7. Subs. by Act 23 of 2012, s. 98, for section 271AA (w.e.f. 1-7-2012).
  8. Section 271AA renumbered as sub-section (1) thereof by Act 28 of 2016, s. 102 (w.e.f. 1-4-2017).
  9. Ins. by s. 102, ibid. (w.e.f. 1-4-2017).
  10. Subs. by Act 23 of 2012, s. 99, for "international transaction" (w.e.f. 1-4-2013).
  11[271AAA. Penalty where search has been initiated.-
  (1) 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 1st day of June, 2007 12[but before the 1st day of July, 2012], the assessee shall pay by way of penalty, in addition to tax, if any, payable by him, a sum computed at the rate of ten per cent. of the undisclosed income of the specified previous year.
  (2) Nothing contained in sub-section (1) shall apply 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) pays the tax, together with interest, if any, in respect of the undisclosed income.
  (3) No penalty under the provisions of clause (c) of sub-section (1) of section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in sub-section (1).
  (4) The provisions of sections 274 and 275 shall, so far as may be, apply in relation to the penalty referred to in this section.
  Explanation.-For the purposes of this section,-
  (a) "undisclosed income" means-
  (i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of a search under section 132, which has-
  (A) not been recorded on or before the date of search in the books of account or other documents maintained in the normal course relating to such previous year; or
  (B) otherwise not been disclosed to the 1[Principal Chief Commissioner or Chief Commissioner] or 2[Principal Commissioner or Commissioner] before the date of search; or
  (ii) any income of the specified previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the search not been conducted;
  (b) "specified previous year" means the previous year-
  (i) which has ended before the date of search, but the date of filing the return of income under sub-section (1) of section 139 for such year has not expired before the date of search and the assessee has not furnished the return of income for the previous year before the said date; or
  (ii) in which search was conducted.]
  11. Ins. by Act 22 of 2007, s. 77 (w.e.f. 1-4-2007).
  12. Ins. by Act 23 of 2012, s. 100 (w.e.f. 1-4-2012).
  1. Subs. by Act 25 of 2014, s. 4, for "Chief Commissioner" (w.e.f. 1-6-2013).
  2. Subs. by s. 4, ibid., for "Commissioner" (w.e.f. 1-6-2013).
  1[271AAB. Penalty where search has been initiated.-
  (1) 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 1st day of July, 2012 2[but before 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 at the rate of ten per cent of the undisclosed income of the specified previous year, if such 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 at the rate of twenty per cent of the undisclosed income of the specified previous year, if such assessee-
  (i) in the course of the search, in a statement under sub-section (4) of section 132, does not admit the undisclosed income; and
  (ii) on or before the specified date-
  (A) declares such income in the return of income furnished for the specified previous year; and
  (B) pays the tax, together with interest, if any, in respect of the undisclosed income;
  (c) a sum 3[computed at the rate of sixty per cent.] of the undisclosed income of the specified previous year, if it is not covered by the provisions of clauses (a) and (b).
  2[(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 at the rate of thirty per cent 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 at the rate of sixty per cent of the undisclosed income of the specified previous year, if it is not covered under the provisions of clause (a).]
  (2) No penalty under the provisions of 1[section 270A or] clause (c) of sub-section (1) of section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in sub-section (1) 2[or sub-section (1A)].
  (3) The provisions of sections 274 and 275 shall, as far as may be, apply in relation to the penalty referred to in this section.
  Explanation.-For the purposes of this section,-
  (a) "specified date" means the due date of furnishing of return of income under sub-section (1) of section 139 or the date on which the period specified in the notice issued under section 153A for furnishing of return of income expires, as the case may be;
  (b) "specified previous year" means the previous year-
  (i) which has ended before the date of search, but the date of furnishing the return of income under sub-section (1) of section 139 for such year has not expired before the date of search and the assessee has not furnished the return of income for the previous year before the date of search; or
  (ii) in which search was conducted;
  (c) "undisclosed income" means-
  (i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of a search under section 132, which has-
  (A) not been recorded on or before the date of search in the books of account or other documents maintained in the normal course relating to such previous year; or
  (B) otherwise not been disclosed to the 3[Principal Chief Commissioner or Chief Commissioner] or 4[Principal Commissioner or Commissioner] before the date of search; or
  (ii) any income of the specified previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the search not been conducted.]
  1. Ins. by Act 23 of 2012, s. 101 (w.e.f. 1-7-2012).
  2. Ins. by Act 48 of 2016, s. 3 (w.e.f. 15-12-2016).
  3. Subs. by Act 28 of 2016, s. 103, for "which shall not be less than thirty per cent. but which shall not exceed ninety per cent." (w.e.f. 1-4-2017).
  1. Ins. by Act 28 of 2016, s. 103 (w.e.f. 1-4-2017).
  2. Ins. by Act 48 of 2016, s. 3 (w.e.f. 15-12-2016).
  3. Subs. by Act 25 of 2014, s. 4, for "Chief Commissioner" (w.r.e.f. 1-6-2013).
  4. Subs. by s. 4, ibid., for "Commissioner" (w.r.e.f. 1-6-2013).
  1[271AAC. Penalty in respect of certain income.-
  (1) 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 ten per cent of the tax payable under clause (i) of sub-section (1) of section 115BBE:
  Provided that 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 clause (i) of sub-section (1) of section 115BBE has been paid on or before the end of the relevant previous year.
  (2) No penalty under the provisions of section 270A shall be imposed upon the assessee in respect of the income referred to in sub-section (1).
  (3) The provisions of sections 274 and 275 shall, as far as may be, apply in relation to the penalty referred to in this section.]
  1. Ins. by Act 48 of 2016, s. 4 (w.e.f. 1-4-2017).
  2[271B. Failure to get accounts audited.-
  If any person fails 3*** to get his accounts audited in respect of any previous year or years relevant to an assessment year or 4[furnish a report of such audit as required under section 44AB], the 5[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 6[one hundred fifty thousand rupees], whichever is less.]
  2. Ins. by Act 21 of 1984, s. 30 (w.e.f. 1-4-1985).
  3. The words ", without reasonable cause," omitted by Act 46 of 1986, s. 21 (w.e.f. 10-9-1986).
  4. Subs. by Act 22 of 1995, s. 48, for "obtain a report of such audit as required under section 44AB or furnish the said repo rt 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" (w.e.f. 1-7-1995). Earlier certain words were inserted by Act 26 of 1988, s. 45 (w.e.f. 1-4-1989).
  5. Subs. by Act 4 of 1988, s. 2, for "Income-tax Officer" (w.e.f. 1-4-1988).
  6. Subs. by Act 14 of 2010, s. 50, for "one hundred thousand rupees" (w.e.f. 1-4-2011).
  7[271BA. Penalty for failure to furnish report under section 92E.-
  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.]
  7. Ins. by Act 14 of 2001, s. 89 (w.e.f. 1-4-2002).
  8[271BB. Failure to subscribe to the eligible issue of capital.-
  Whoever fails to subscribe any amount of subscription to the units issued under any scheme referred to in sub-section (1) of section 88A* to the eligible issue of capital under that sub-section within the period of six months specified therein, may be directed by the 9[Joint Commissioner] to pay, by way of penalty, a sum equal to twenty per cent of such amount.]
  8. Ins. by Act 12 of 1990, s. 43 (w.e.f. 1-4-1990).
  * Section 88A omitted by Act 33 of 1996, s. 35 (w.e.f. 1-4-1994).
  9. Subs. by Act 21 of 1998, s. 3, for "Deputy Commissioner" (w.e.f. 1-10-1998).
  1[271C. Penalty for failure to deduct tax at source.-
  2[3[(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.]
  4[(2) Any penalty imposable under sub-section (1) shall be imposed by the 5[Joint Commissioner].]
  1. Ins. by Act 4 of 1988, s. 108, (w.e.f. 1-4-1989).
  2. Subs. by Act 26 of 1997, s. 53, for sub-section (1), (w.e.f. 1-6-1997). Earlier it was amended by Act 12 of 1990, s. 44 (w.e.f. 1-4-1990).
  3. Section 271C renumbered as sub-section (1) thereof by Act 12 of 1990, s. 44 (w.e.f. 1-4-1990).
  4. Ins. by s. 44, ibid (w.e.f. 1-4-1990).
  5. Subs. by Act 21 of 1998, s. 3, for "Deputy Commissioner" (w.e.f. 1-10-1998).
  6[271CA. Penalty for failure to collect tax at source.-
  (1) If any person fails to collect the whole or any part of the tax as required by or under the provisions of Chapter XVII-BB, 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 collect as aforesaid.
  (2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner.]
  6. Ins. by Act 21 of 2006, s. 52 (w.e.f. 1-4-2007
  271D. Penalty for failure to comply with the provisions of section 269SS.-
  7[(1)] If a person takes or accepts any loan or deposit 8[or specified sum] 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 8[or specified sum] so taken or accepted.
  9[(2) Any penalty imposable under sub-section (1) shall be imposed by the 5[Joint Commissioner].]
  5. Subs. by Act 21 of 1998, s. 3, for "Deputy Commissioner" (w.e.f. 1-10-1998).
  7. Section 271D renumbered as sub-section (1) thereof by Act 12 of 1990, s. 45 (w.e.f. 1-4-1990).
  8. Ins. by Act 20 of 2015, s. 71 (w.e.f. 1-6-2015).
  9. Ins. by Act 12 of 1990, s. 45 (w.e.f. 1-4-1990).
  10[271DA. Penalty for failure to comply with provisions of section 269ST.-
  (1) 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:
  Provided that no penalty shall be imposable if such person proves that there were good and sufficient reasons for the contravention.
  (2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner.]
  10. Ins. by Act 7 of 2017, s. 85 (w.e.f. 1-4-2017).
  271E. Penalty for failure to comply with the provisions of section 269T.-
  11[(1)] If a person repays any 12[loan or deposit] 13[or specified advance] 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 12[loan or deposit] 13[or specified advance] so repaid.]
  14[(2) Any penalty imposable under sub-section (1) shall be imposed by the 5[Joint Commissioner].]
  5. Subs. by Act 21 of 1998, s. 3, for "Deputy Commissioner" (w.e.f. 1-10-1998).
  11. Section 271E renumbered as sub-section (1) thereof by Act 12 of 1990, s. 46 (w.e.f. 1-4-1990).
  12. Subs. by Act 32 of 2003, s. 95, for "Deposit" (w.e.f. 1-6-2003).
  13. Ins. by Act 20 of 2015, s. 72 (w.e.f. 1-6-2015).
  14. Ins. by 12 of 1990, s. 46 (w.e.f. 1-4-1990).
  1[271F. Penalty for failure to furnish return of income.-
  If a person who is required to furnish a return of his income, as required under sub-section (1) of section 139 or by the provisos to that sub-section, fails to furnish such return before the end of the relevant assessment year, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of five thousand rupees.]
  2[Provided that nothing contained in this section shall apply to and in relation to the return of income required to be furnished for any assessment year commencing on or after the 1st day of April, 2018.]
  1. Subs. by Act 20 of 2002, s. 102, for section 271F (w.e.f. 1-6-2002).
  2. Ins. by Act 7 of 2017, s. 86 (w.e.f. 1-4-2018).
  3[271FA. Penalty for failure to furnish 4[statement of financial transaction or reportable account].-
  If a person who is required to furnish 5[a statement of financial transaction or reportable account] under sub-section (1) of section 285BA, fails to furnish such 6[statement] within the time prescribed under sub-section (2) thereof, the income-tax authority prescribed under said sub-section (1) may direct that such person shall pay, by way of penalty, a sum of 7[five hundred rupees] for every day during which such failure continues:
  Provided that where such person fails to furnish the 6[statement] within the period specified in the notice issued under sub-section (5) of section 285BA, he shall pay, by way of penalty, a sum of 8[one thousand rupees] for every day during which the failure continues, beginning from the day immediately following the day on which the time specified in such notice for furnishing the 6[statement] expires.]
  3. Subs. by Act 17 of 2013, s. 58, for section 271FA (w.e.f. 1-4-2014).
  4. Subs. by Act 25 of 2014, s. 70, for "annual information return" (w.e.f. 1-4-2015).
  5. Subs. by s. 70, ibid., for "an annual information return" (w.e.f. 1-4-2015).
  6. Subs. by s. 70, ibid., for "return" (w.e.f. 1-4-2015).
  7. Subs. by Act 13 of 2018, s. 53, for "one hundred rupees" (w.e.f. 1-4-2018).
  8. Subs. by s. 53, ibid., for "five hundred rupees" (w.e.f. 1-4-2018).
  9[271FAA. Penalty for furnishing inaccurate statement of financial transaction or reportable account.-
  If a person referred to in clause (k) of sub-section (1) of section 285BA, who is required to furnish a statement under that section, provides inaccurate information in the statement, and where-
  (a) the inaccuracy is due to a failure to comply with the due diligence requirement prescribed under sub-section (7) of section 285BA or is deliberate on the part of that person; or
  (b) the person knows of the inaccuracy at the time of furnishing the statement of financial transaction or reportable account, but does not inform the prescribed income-tax authority or such other authority or agency; or
  (c) the person discovers the inaccuracy after the statement of financial transaction or reportable account is furnished and fails to inform and furnish correct information within the time specified under sub-section (6) of section 285BA, then, the prescribed income-tax authority may direct that such person shall pay, by way of penalty, a sum of fifty thousand rupees.]
  9. Ins. by Act 25 of 2014, s. 71 (w.e.f. 1-4-2015).
  10[271FAB. Penalty for failure to furnish statement or information or document by an eligible investment fund.-
  If any eligible investment fund which is required to furnish a statement or any information or document, as required under sub-section (5) of section 9A fails to furnish such statement or information or document within the time prescribed under that sub-section, the income-tax authority prescribed under the said sub-section may direct that such fund shall pay, by way of penalty, a sum of five hundred thousand rupees.]
  10. Ins. by Act 20 of 2015, s. 73 (w.e.f. 1-4-2016).
  11[271FB. Penalty for failure to furnish return of fringe benefits.-
  If an employer, who is required to furnish a return of fringe benefits, as required under sub-section (1) of section 115WD, fails to furnish such return within the time prescribed under that sub-section, the Assessing Officer may direct that such employer shall pay, by way of penalty, a sum of one hundred rupees for every day during which the failure continues.]
  11. Ins. by Act 18 of 2005, s. 59 (w.e.f. 1-4-2006).
  1[271G. Penalty for failure to furnish information or document under section 92D.-
  If any person who has entered into an 2[international transaction or specified domestic transaction] fails to furnish any such information or document as required by sub-section (3) of section 92D, the Assessing Officer 3[or the Transfer Pricing Officer as referred to in section 92CA] 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 2[international transaction or specified domestic transaction for each such failure.]
  1. Ins. by Act 14 of 2001, s. 91 (w.e.f. 1-4-2002).
  2. Subs. by Act 23 of 2012, s. 102, for "international transaction" (w.e.f. 1-4-2013).
  3. Ins. by Act 25 of 2014, s. 72 (w.e.f. 1-10-2014).
  4[271GA. Penalty for failure to furnish information or document under section 285A.-
  If any Indian concern, which is required to furnish any information or document under section 285A, fails to do so, the income-tax authority, as may be prescribed under the said section, may direct that such Indian concern shall pay, by way of penalty,-
  (i) a sum equal to two per cent of the value of the transaction in respect of which such failure has taken place, if such transaction had the effect of directly or indirectly transferring the right of management or control in relation to the Indian concern;
  (ii) a sum of five hundred thousand rupees in any other case.]
  4. Ins. by Act 20 of 2015, s. 74 (w.e.f. 1-4-2016).
  5[271GB. Penalty for failure to furnish report or for furnishing inaccurate report under section 286.-
  (1) If any reporting entity referred to in section 286, which is required to furnish the report referred to in sub-section (2) of the said section, in respect of a reporting accounting year, fails to do so, the authority prescribed under that section (herein referred to as prescribed authority) may direct that such entity shall pay, by way of penalty, a sum of,-
  (a) five thousand rupees for every day for which the failure continues, if the period of failure does not exceed one month; or
  (b) fifteen thousand rupees for every day for which the failure continues beyond the period of one month.
  (2) Where any reporting entity referred to in section 286 fails to produce the information and documents within the period allowed under sub-section (6) of the said section, the prescribed authority may direct that such entity shall pay, by way of penalty, a sum of five thousand rupees for every day during which the failure continues, beginning from the day immediately following the day on which the period for furnishing the information and document expires.
  (3) If the failure referred to in sub-section (1) or sub-section (2) continues after an order has been served on the entity, directing it to pay the penalty under sub-section (1) or, as the case may be, under sub-section (2), then, notwithstanding anything contained in sub-section (1) or sub-section (2), the prescribed authority may direct that such entity shall pay, by way of penalty, a sum of fifty thousand rupees for every day for which such failure continues beginning from the date of service of such order.
  (4) Where a reporting entity referred to in section 286 provides inaccurate information in the report furnished in accordance with sub-section (2) of the said section and where-
  (a) the entity has knowledge of the inaccuracy at the time of furnishing the report but fails to inform the prescribed authority; or
  (b) the entity discovers the inaccuracy after the report is furnished and fails to inform the prescribed authority and furnish correct report within a period of fifteen days of such discovery; or
  (c) the entity furnishes inaccurate information or document in response to the notice issued under sub-section (6) of section 286, then, the prescribed authority may direct that such person shall pay, by way of penalty, a sum of five lakh rupees.]
  5. Ins. by Act 28 of 2016, s. 104 (w.e.f. 1-4-2017).
  1[271H. Penalty for failure to furnish statements, etc.-
  (1) Without prejudice to the provisions of the Act, the 2[Assessing Officer may direct that a person shall pay by way of] penalty, if, he-
  (a) fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C; or
  (b) furnishes incorrect information in the statement which is required to be delivered or caused to be delivered under sub-section (3) of section 200 or the proviso to sub-section (3) ofsection 206C. (2) The penalty referred to in sub-section (1) shall be a sum which shall not be less than ten thousand rupees but which may extend to one lakh rupees.
  (3) Notwithstanding anything contained in the foregoing provisions of this section, no penalty shall be levied for the failure referred to in clause (a) of sub-section (1), 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 cause to be delivered the statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C before the expiry of a period of one year from the time prescribed for delivering or causing to be delivered such statement.
  (4) The provisions of this section shall apply to a statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C 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 the 1st day of July, 2012.
  1. Ins. by Act 23 of 2012, s. 103 (w.e.f. 1-7-2012).
  2. Subs. by Act 25 of 2014, s. 73, for certain words (w.e.f. 1-10-2014).
  3[271-I. Penalty for failure to furnish information or furnishing inaccurate information under section 195.-
  If a person, who is required to furnish information under sub-section (6) of section 195, fails to furnish such information, or furnishes inaccurate information, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of one lakh rupees.]
  3. Ins. by Act 20 of 2015, s. 75 (w.e.f. 1-6-2015).
  4[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 ten thousand rupees for each such report or certificate.
  Explanation.--For the purposes of this section,-
  (a) "accountant" means an accountant referred to in the Explanation below sub-section (2) of section 288;
  (b) "merchant banker" means Category I merchant banker registered with the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992.
  (c) "registered valuer" means a person defined in clause (oaa) of section 2 of the Wealth-tax Act, 1957.]
  4. Ins. by Act 7 of 2017, s. 87 (w.e.f. 1-4-2017).