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Hid penalties and prosecution

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Hid penalties and prosecution

  1. 1. Achal Garg – 02 Dhiraj Gaur -15 Gaurav Grewal -18 Nazish – 27 Sunny Bhat -54
  2. 2.  Procedure ◦ Before levying any penalty, assessee must be heard or reasonable opportunity must be given to him to be heard ◦ Joint Commissioner’s approval must be taken if Income Tax Officer imposes penalty of Rs 10,000 or Assistant of Deputy commissioner imposes penalty of Rs 20,000 ◦ Income Tax officer will send a copy of the penalty to the Assessing officer if both are not the same person
  3. 3.  Quantum of Penalty ◦ If the authority decides to impose penalty, it cannot be less than the prescribed minimum, quantum shall be as per date of default  Discretionary Power ◦ If the penalty to be imposed is a matter of discretion of the authority, it should be exercised with reason (not arbitrarily) and after considering relevant circumstances of the case  Penalty maybe imposed under more than one section at a time
  4. 4.  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 ax 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)]
  5. 5.  Wrong distribution of profits of registered firm [271(4)] ◦ Upto 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
  6. 6.  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
  7. 7.  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
  8. 8.  In case of concealment of income ◦ Person has made full and true disclosure prior to the detection of the Assessing Officer ◦ Person has cooperated with department in any inquiry ◦ Has paid or made satisfactory arrangements for payment of tax or interest payable  Reduction or waiver benefits can once taken cannot be received in any other year in future  If concealed income is greater than 5 lakh or penalty exceeds 1 lakh permission of Chief Commissioner is required
  9. 9.  Commissioner must record the reasons for waiver  Every order made by the commissioner regarding waivers is final and shall not be called into question by any court  A person cannot be prosecuted in relation to assessment of assessment year in which penalty has been waived by chief commissioner
  10. 10.  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 upto 2 years  Failure to provide officer necessary facilities to inspect accounts or documents [275B] ◦ Fine and imprisonment upto 2 years  Removal, concealment, transfer or delivery of property to thwart tax recovery [276] ◦ Fine and imprisonment upto 2 years
  11. 11.  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
  12. 12.  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 upto 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  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
  13. 13.  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  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  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
  14. 14.  If any prosecution of offence requires a culpable mental state on the accused, court presumes the existence of the mental state  Accused has to prove that he was in no such mental state if defense has to be taken on this ground  Culpable mental state includes intention, motive or knowledge of fact or belief in or reason to believe, a fact.
  15. 15.  Offences under section 276B, 276C,276CC,277 an 278 are deemed to be non-cognizable  A police officer has not authority to arrest a person without warrant

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