Amended and updated notes on section 271AAC of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to Penalty in respect of certain income.
Chapter XXI (Sections 270A to 275) of the Income Tax Act 1961 deals with the provisions related to penalties imposable. Section 271AAC of IT Act 1961 provides for Penalty in respect of certain income.
Recently, we have discussed in detail section 271AA (Penalty for failure to keep and maintain information and document, etc., in respect of certain transactions) of IT Act 1961.
Today, we learn the provisions of section 271AAC of Income-tax Act 1961 as amended by the Finance Act 2022. The amended provision of section 271AAC is effective for financial year 2022-23 relevant to the assessment year 2023-24.
In this article, you will learn detail of the provisions of section 271AAC of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962 as provided by Ministry of Law and Justice, Government of India.
Section-271AAC: Penalty in respect of certain income
Section 271AAC (1):
The Assessing Officer or the Commissioner (Appeals) 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.
[Sub-section (1) of section 271AAC amended (inserted) w.e.f. 1-April-2022 by the Finance Act 2022]
Section 271AAC (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).
Section 271AAC (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.