penalties and prosecution of income tax act

2.  Failure to file return, not furnishing the return in specified period or
not disclosing full income in case of search [158 BFA(2)]
◦ Mini 100% , Max 300% of tax sought to be evaded
 Penalty on tax in default [221(1)]
◦ Not exceeding tax in arrears
 Failure to comply with notices (to get accounts audited, to produce
documents, produce evidence) [271(1)(b)]
◦ Rs 10,000
 Concealment or inaccurate particulars of income [271(1)(c)]
◦ Mini 100% , Max 300% of tax sought to be evaded

3.  Wrong distribution of profits of registered firm [271(4)]
◦ Up to 150% of Tax sought to be evaded
 Failure to maintain or retain accounts, documents [271A]
◦ Rs 25,000
 Penalty where search has been initiated on or after 1-jun-2007 [271AAA]
◦ 10% of undisclosed income
 Failure to get accounts audited [271B]
◦ .5% of turnover, sales, gross receipts etc or Rs 1 Lakh whichever is less
 Failure to deduct tax at source [271C]
◦ Equal to tax not deducted

4.  Penalty for failure to collect tax at source [271CA]
◦ Equal to tax not collected
 Failure to take or accept loan/deposit (greater than Rs 20,000) by
cheque or draft [271D]
◦ Equal to amount of deposit of loan
 Failure to repay loan/deposit (greater than Rs 20,000) by cheque or
draft [271E]
◦ Equal to amount of deposit or loan so re-paid
 Failure to furnish return of income [271F]
◦ Rs 5,000

5.  Failure to file return of fringe benefits [271FB]
◦ Rs 100 per day of default
 Failure to answer questions, sign statements, allow inspection
[272A(1)]
◦ Rs 10,000 for each default
 Failure regarding tax deduction and tax collection account number
[272B]
◦ Rs 10,000
 Failure to furnish annual information return for special
transactions(u/s 285BA) [272BB]
◦ Rs 100 per day of default

6.  Contravention of order u/s 132(3), not to remove books
of accounts, money, jewellery etc without permission of
authorized officer [275A]
◦ Fine and imprisonment up to 2 years
 Failure to provide officer necessary facilities to inspect
accounts or documents [275B]
◦ Fine and imprisonment up to 2 years
 Removal, concealment, transfer or delivery of property
to thwart tax recovery [276]
◦ Fine and imprisonment up to 2 years

7.  Transfer of property greater than 5 lakh without complying with
provisions [276AB]
◦ Fine and imprisonment of 3 months to 7 years
 Failure to pay the tax deducted at source [276B]
◦ Fine and imprisonment of 3 months to 7 years
 Failure to pay the tax collected at source [276BB]
◦ Fine and imprisonment of 3 months to 7 years
 Willful attempt to evade tax(false book entries, omission of
entries etc) [276C]
◦ For amount > 1 lakh , fine and imprisonment of 6 months to 7 years, in
other cases 3 months to 3 years

8.  Failure to furnish return of income in search cases [276CC]
◦ If tax evaded > 1 lakh , fine and imprisonment of 6 months to 7
years, in other cases 3 months to 3 years
 Failure to furnish return of income [276CCC]
◦ Fine and imprisonment of 3 months to 3 years
 Failure to produce accounts and documents [276D]
◦ Rs 4 to 10 per day and imprisonment of up to 1 year
 False statement in verification [277]
◦ If tax evaded > 1 lakh , fine and imprisonment of 6 months to 7
years, in other cases 3 months to 3 years

9.  Upon liquidation of company, failure to give notice to assessing
officer in 30 days, set aside money for tax liabilities or parting
with assets of company in contravention on Sec 178(3) [276A]
◦ Imprisonment of 6 months to 2 years
 Abetment of false returns [278]
◦ If tax evaded > 1 lakh , fine and imprisonment of 6 months to 7 years, in
other cases 3 months to 3 years
 Punishment for second and subsequent offences in section
276B,276C,276CC,277 or 278
◦ Fine and imprisonment of 6 months to 2 years
 Disclosure of particulars by public servants [280(1)]
◦ Fine and imprisonment of 6 months

10.  Offences by companies [278B]
◦ Liability will be of Managing Director of any such officer who
has willfully committed the offense
 Offences by Hindu undivided families [278C]
◦ Liability will be of Karta of any such member who has
willfully committed the offense