It was since 1956 that the provisions of search and seizure had made its

first entry into the Income Tax Act, 1961. Finance Act, 1964 was
substitutes of Section 132. Two committees had made certain
recommendations on the search and seizure provisions that are

 The Raja Chellaiah Committee and,

 The Kelkar Committee.

The article below tells us about the search and seizures under the
Income Tax Act, 1961.

The Authorized Officers to issue orders

1. The Director General of Income Tax, or

2. The Director of Income Tax, or
3. The Chief Commissioner of Income Tax, or
4. The Commissioner of Income Tax, or
5. Any such Joint Director or Joint Commissioner of Income Tax as
may be empowered by the Board.

The Director General or Director or the Chief Commissioner or

Commissioner or Joint Commissioner or Joint Director who thus have
been empowered by the Board can authorize any of the officers who are
subordinate to him not below the rank of the  Income Tax Officer to
conduct a search. Issuing of a search warrant in Form 45 is done by
Authorized Officer and the authorization.

Circumstances under Search and Seizure

132(1)
The authorized officer who is thus duly empowered by the Board has in
his possession any information through which he has reason to believe
that –

132(1)(a)
A person to whom a summon u/s 131(1) or a notice u/s 142(1) has
however been served in order to produce books of accounts or other
documents has thus failed or omitted to produce or cause to be
produced the said books of accounts or other documents, or,

132(1)(b)
A person to whom such a summon u/s 131(1) or a notice u/s 142(1) has
thus been or it might be issued is thus not likely to produce or thus
caused to be produced any books of account or any other document
which would be useful for or either relevant to any proceedings under the
Act; or

132(1) (c)
If any bullion, jewelry, money is in possession of a person or any other
valuable article/ thing and that kind of property represents wholly/partly
income or the property which has not been disclosed or it would not be
disclosed.

The persons who are to be searched for are:

(a)  Who has books of account or the documents which have not been
produced or are not likely to be produced in response to the notices or /
summons, or

(b) Persons who are in possession of any undisclosed property or

incomeWhat are the circumstances in which search and seizure can
be conducted?
132(1)
The authorized officer who is duly empowered by the Board has in his
possession any information through which he has reason to believe that
–
132(1 )(a)
A person to whom a summon u/s 131(1) or a notice u/s 142(1) has been
served to produce books of accounts or other documents has failed or
omitted to produce or cause to be produced the said books of accounts
or other documents, or,
132(1 )(b)
A person to whom a summon u/s 131(1) or a notice u/s 142(1) has been
or might be issued is not likely to produce or caused to be produced any
books of account or other document which will be useful for or relevant
to any proceedings under the Act; or
132(1) (c)
A person is in possession of money, bullion, jewellery or other valuable
article or thing and such property represents wholly or partly income or
property which has not been disclosed or would not be disclosed.
Who are the Persons to be searched: From the above it is clear that
the persons to be searched are persons:
(a)   who have books of account or documents which have not been
produced or are not likely to be produced in response to notices or /
summons, or
(b) persons who are likely to be in possession of undisclosed income or
property. 
What are the basis for search and seizure?
The assessing officer must have a reason to believe that the person,
whether or not a notice has been served on him, is not likely to produce
his books, etc. in such a case, the basic is that the person will suppress
books of account and other documents which may be useful and
relevant to an income tax proceedings. Here the authorizing authority, if
challenged, has to prove the basis of belief.
MAMCHAND AND CO v CIT (1970) 76 ITR 217 (CAL)
KUSUM LATAv CIT (1989) 180 ITR365 (RAJ)
There must be information with the authorizing authority relating to two
matters. One, the person should be in possession of money and
secondly such money represents either wholly or partly income or
property which has not been disclosed.
CIT v RAMESH CHANDER (1974) 93 ITR 450 (PUN)

What are the powers of the officer to whom authority is given for
search and seizure?
a)      enter and search any building, place, vessel, vehicle or aircraft
where he has reason t0o suspect that such books of accounts, other
documents, money, bullion, jewellery or other valuable article or thing
are kept.
b)      Break open the lock of any door,box, locker, safe, almirah or other
receptacle for exercising the powers conferred by clause (i) above where
the keys thereof are not available.
c)   Search any person who (a) has got out of, or (b) is about to get into,
or (c) is in the building, place, vessel, vehicle or aircraft, if the authorized
officer has reason to suspect that such person has secreted about his
person any such books of account, other documents, money, bullion,
jewellery or other valuable article or thing.
d)      Require any person who is found to be in possession or control of
any books of account or other documents maintained in the form of
electronic records, to afford the necessary facility to the authorized
officer to inspect all such books of account or other documents.
e)   Seize any such books of account, other documents, money, bullion,
jewellery or other valuable article or thing found as a result of such
search. However, w.e.f. 1-6-2003, the authorized officer shall have no
powers to seize any bullion, jewellery or other valuable article or thing
being stock-in-trade of the business found as a result of search. He shall
make a note or inventory of such stock-in- trade of business.
f)        Place marks of identification on any books of account or other
documents or make or cause to be made extracts or copies therefrom.
g) Make a note or an inventory of any such money, bullion, jewellery or
other valuable article or thing.
What are the additional powers of the authorized officer?
a) Deemed Seizure 132(1) : Where it is not possible or practicable to
take physical possession of any valuable article or thing and remove it to
a safe place due to its volume, weight or other physical characteristics or
due to it being of a dangerous nature, the authorized officer may serve
an order on the owner or the person who is in immediate possession
thereof that he shall not remove, part with or otherwise deal with it
except with the previous permission of such authorized officer and such
action of the authorized officer shall be deemed to be seizure of such
valuable article or thing.
b) Restraint Order 132(3) with explanation and section 132(8A) :
where it is not possible or practicable to seize any (a) books of accounts,
or other documents, or (b) money, bullion jewellery or other valuable
articles or things for reasons other than those mentioned , the authorized
officer may serve an order on the owner or a person who is in immediate
possession or control thereof that he shall not part with or otherwise deal
with it except with the previous permission of such officer and such
officer may take steps as may be necessary for compliance.
c) Power to requisition service of a police officer or officer of the
Central Government sec 132(2): The authorized officer may requisition
the services of any police officer or any of the officer of the Central
Government or of both to assist him for all or any of the purposes
specified above and it will be duty of every such officer to comply with
such requirements.
d) Examination of any person on oath sec 132(4) with
explanation: the authorized officer may, during the course of search or
seizure, examine on oath any person who is found to be in possession
or control of any books of accounts, documents, money, bullion,
jewellery or other valuable article or thing and any statement made by
such person during such examination may thereafter be used in
evidence in any proceeding under the I.T.Act,1 961. The statement can
be recorded during the course of search and seizure or when it is over.
Further, an explanation has been added to provide that the examination
of any person may be not merely be in respect of any books of account,
other documents or assets found as a result of the search, but also in
respect of all matters relevant for the purposes of any investigation
connected with any proceedings under the Income Tax Act,1 961.
e) Presumption of ownership of books of accounts and assets and
its truthfulness sec 132 (4A): it may be presumed a)the books of
account or other documents and assets found in possession of any
person in the course of a search belong to such person, b) the contents
of such books of accounts and other documents are true, c) the
signature and every other part of such books of account and other
documents which purports to be in the handwriting of any particular
person are in handwriting of that person or which may reasonably be
assumed to have signed or written the books of accounts or other
documents are in that person’s handwriting. In case of documents
stamped, executed or attested that it was duly stamped and executed or
attested by the person by whom it purports to have been so executed or
attested.
f) Copies of extract of books of account and documents sec
132(9): the person from whose custody any books of accounts or
documents are seized may make copies or take extracts therefrom in the
presence of authorized officer or any person empowered by him in his
behalf, at such place an time as the authorized officer may appoint in
this behalf.
g) Handling over of seized books and assets to assessing officer
sec 132(9A): such handling over is done within the period of 60 days
from the date on which the last of the authorization for search was
executed.
Seizure of jewellery:
a)        In the case of wealth tax assessee, gold, jewellery and
ornaments found in excess of gross weight disclosed in the wealth
disclosed in the wealth tax return only need to be seized.
b)        in case of person not assessee to wealth tax, gold jewellery and
ornaments to the extent of 500gms per married lady, 250 gms per
unmarried lady and 100 gms per male member of the family, need not
be seized. The same is treated as explained and no addition can be
made under sec 69. the said guidelines would apply to block
assessment.
Explain the powers, procedures followed by the authorized officer
with regards to requisition of books of accounts ?(sec 132)
a) Requisition of books of account, etc taken into custody under
any other law:
Section 132A provides that in case where any books of account or other
documents and assets have been taken into custody by the Officer or
authority under any law e.g by the Collector of Customs, the Sales Tax
Commissioner, etc, the Director General or Director or the Chief
Commissioner or Commissioner of Income Tax may, in such
circumstances as are covered by section 132 for search and seizure,
authorize in Form No 45C and Deputy Director, Assistant Commissioner,
Assistant Director or the Assessing Officer (Requisitioning Officer) to
require such officer or authority to deliver to him such books of account
or other documents and assets. This section however does not empower
to take under requisition assets and documents which are in the custody
of court.
JUDICIAL POSITION IN OUR COURTS”
Search does not get invalidated on allegation of bribery as affirmed in
Kamal Khosla v Director of Income Tax (Investigation) 258 ITR 43
> In case where the search officers dump documents and articles in
particular place and seal it, so that they could examine whether they
could seize it or not at their leisure, they may not be within their rights as
held in Dr. C. Balakrishnan Nair v CIT 237 ITR 70
>  Where the CIT had authorised a search merely on an intimation from
CBI without any effort to ascertain the correctness of the allegation of
money or other assets or primary verification the court held the search
was invalid, Ajit Jain Vs Union of India 242 ITR 302
>  In Ram Kumar Dhanuka v Union of India 252 ITR 205, the court has
held that nonresidents are not immune from the reach of powers of
search and seizure.
>  Constitutional validity affirmed in Pooran Mal v. Director of Inspection
93 ITR 505,  C. Venkata Reddy V ITO 66 ITR 212
>  Power to arrest denied in L.R.Gupta v  Union of India 194 ITR 32
> Interpretative clause cannot be invoked for the purposes of
authorization of search held in Dr. Nalini Mahajan v Director of Income
Tax 2571TR 123
> Just because cash was initially seized by the police, there could not be
action under section 482 of the Criminal Procedure Code, 1973, when
the cash seized had meanwhile become the subject matter of an other
search. Kushi Ram v Hashim, AIR 1959 SC 542.
> It would not be correct for the search officers to seize assets not
belonging to the assessee where there was explanation as to the
ownership of such assessee as held in Alleppey Financial Services V
ADIT 236 ITR 562.
> Immovable property cannot be seized held in Bapurao v ADI 247 ITR
98, followed Sardar Parduman Singh v Union of India 166 ITR 115.
Penalties and Prosecutions
Default in complying with provisions of or with conditions prescribed under the
Income-tax Act would attract certain penalty and in critical cases prosecutions as
well. The document will provide you information about the punishable offences,
prosecutions and the quantum of penalties that can be imposed under the law.
There are three modes built in the fiscal legislation for encouraging tax compliance:
(a) Charge of Interest, (b) imposition of penalty (c) launching of prosecution against
tax delinquents. While charging of interest is compensatory on character, the
imposition of penalty and institution of prosecution proceedings act as strong
deterrents against potential tax delinquents.
What are the defaults which may invite levy of penalty?
Chapters XVII and XXI of Income-tax Act, 1961, contain various provisions
empowering an Income-tax Authority to levy penalty in case of certain defaults. The
following defaults may invite levy of penalty:
(i) When the assessee is in default or is deemed to be in default in making payment
of tax, including the tax deducted at source, advance tax and the self assessment
tax. [Section 221 read with Sec.201(1)]
(ii) Failure to pay the advance tax as directed by the Assessing Officer or as
estimated by the assessee. [Section 273(1)]
(iii) Failure to comply with a notice issued under section 142(1) or 143(2) or failure to
comply with the direction issued under section 142(2A) to get the accounts audited.
[Section 271(1)(b)]
(iv) Concealment of particulars of income or furnishing of inaccurate particulars of
income. [Section 271(1)(c)]
(v) Failure to maintain books of accounts and documents by persons carrying on
profession or business as prescribed under section 44AA. [Section 271A]
(vi) Failure to get the accounts audited in prescribed circumstances or failure to
obtain the prescribed audit report within prescribed time period of failure to furnish
the audit report along with the return, as required under section 44AB. [Section
271B]
(vii) Failure to subscribe to the eligible issue of capital [Section 271BB]
(viia) Penalty for failure to deduct tax at source. [Section 271C]
(viii) Accepting of any loan or deposit or repayment of deposit of Rs.20,000 or more
otherwise than by account payee cheque or account payee draft, in contravention of
the provisions of Section 269SS. [Section 271D]
(viiia) Repayment of loan in contravention of the conditions imposed in section 269T.
[Section 271E]
(viiib) A. Failure of file the return of income as required under Section 239 (1), shall
entail imposition of penalty. [Section 271F]
B. Failure to file the return as required under the proviso to Section 139(1), in the
event of assessee fulfilling the prescribed conditions, i.e., certain persons in
occupation of immovable property or owner of motor vehicle or subscriber to
telephone, one who incurred expenditure on foreign travel, the holder of the credit
card or a member of a club, subject to specific conditions, are required to file the
return as per proviso to Section 139(1), failing which penalty may be imposed.
(Proviso to Section 271F)
(ix) Refusal to answer in contravention of legal obligation. [Section 272A(1)(a)]
(x) Refusal to sign any statement made in the course of income-tax proceedings.
[Section 272A(1)(b)]
(xi) Failure to attend or give evidence or produce books of accounts and documents
in compliance with the requirements of summons under section 131(1). [Section
272A(1)(c)]
(xii) Failure to comply with the provisions of section 139A dealing with the application
for and allotment of Permanent Account Number or General Index Register Number.
[Section 272A(1)(d)]
(xiii) Failure to furnish information regarding securities. [Section 272A(2)(a)]
(xiv) Failure to give notice of discontinuance of business or profession. [Section
272A(2)(b)]
(xv) Failure to furnish in due time information sought under section 133 of Income-
tax Act. [Section 272A(2)(c)]
(xvi) Failure to furnish in due time prescribed returns/statements. [Section 272A(2)
(c)]
(xvii) Failure to allow inspection or take copies of registers of registers of companies.
[Section 272A(2)(d)]
(xviii) Failure to furnish in due time the return of income by charitable or religious
institutions. [Section 272A(2)(e)]
(xix) Failure to deliver in due time a copy of declaration of non-deduction of tax at
source u/s.197A. [Section 272A(2)(f)]
(xx) Failure to furnish a certificate of tax deducted at source to the person on whose
behalf tax has been deducted or collected as required by Section 203 or Section
206C. [Section 272A(2)(g)]
(xxi) Failure to deduct and pay tax from salary payable to an employee as directed
by the Assessing Officer or the Tax Recovery Officer as required by Section 226(2).
[Section 272A(2)(h)]
(xxii) Failure to allow an Income-tax Authority to collect any information useful or
relevant to the purposes of Income-tax Act u/s.133B. [Section 272AA)]
(xxiii) Failure to comply with the provisions of section 203a dealing with tax
Deduction Account Number [Section 272BB]
Is the levy of penalty automatic?
No penalty under the Income-tax Act is imposed unless the person concerned has
been given reasonable opportunity of being heard.
What is the minimum and maximum penalty leviable?
The quantum of penalty leviable depends upon the nature of default. The relevant
section of Income-tax Act prescribe the minimum and maximum penalties which can
be levied.
Can the penalty be reduced or waived?
The Commissioner of Income-tax may reduce or waive the amount of any penalty
imposed or imposable, if prescribed conditions are satisfied. The assessee should
voluntarily and in good faith make full and true disclosure of income prior to the
detection of concealment by the Assessing Officer. In certain cases of genuine
hardship, the penalty levied can be reduced/waived if the assessee has co-operated
in any enquiry relating to the assessment and recovery of taxes. The
waiver/reduction of penalties is discretionary and dependent upon satisfaction or
prescribed conditions. No assessee can, a matter of right, claim waiver or reduction
of penalty imposed or imposable upon him. [Section 273A]
What are the offences punishable under the income tax act?
The following offences committed by a person are punishable:
(i) Removal, parting with or otherwise dealing with books of accounts, documents,
money, bullion, jewellery or other valuable article or thing put under restraint during
the search. [Section 275A]
(ii) Fraudulent removal, concealment, transfer or delivery of any property or any
interest in the property with the intention to thwart recovery of tax. [Section 276]
(iii) Failure on the part of a liquidator or receiver of a company to give notice of his
appointment to the Assessing Officer or failure to set apart amount notified by the
Assessing Officer, or parting away of company’s properties in contravention of
income-tax provision. [Section 276A]
(iv) Failure to enter into written agreement or failure to furnish the statement of
immovable property intended to be transferred u/s.269UC, or failure to surrender or
deliver the property u/s.269UE, purchased by the Appropriate Authority or doing or
omitting to do anything u/s.269UL, which will have the effect of transfer of property
without the permission of the Appropriate Authority (under the provisions of Chapter
XX-C) [Section 276AB]
(v) Failure to pay to the credit of the Central Government the tax deducted at source.
[Section 276B]
(va) Failure to pay the tax collected at source. [Section 276BB]
(vi) Willful attempt to evade any tax, penalty or interest [Section 276C(1)]
(vii) Willful attempt to evade the payment of any tax, penalty or interest levied under
Income Tax Act. [Section 276C(2)]
(viii) Willful failure to furnish in due time return of income. [Section 276CC)]
(viiia) Failure to furnish return of income in Search Cases as required under section
158BC [Section 276CCC]
(ix) Willful failure to produce accounts and documents as directed by issue of notice
under section 142(1) [Section 276D]
(x) Willful failure to get the accounts audited as directed by the Assessing Officer
under section 142(2A). [Section 276D]
(xi) Making of a statement in verification or delivery of an account or statement which
is false and which the concerned person knows or believes to be false or does not
believe to be true. [Section 277]
(xii) Abetting or inducing another person to make and deliver an account or
statement or declaration relating to any taxable income which is false and which he
either knows or believes to be false. [Section 278]
(xiii) Punishment for 2nd & subsequent offences in cases of certain defaults. [Section
278A]
No person shall be punished for any failure if he proves that there is reasonable
cause failure. [Section 278AA].
Who is liable to be prosecuted?
Any person, committing the offence is liable to be prosecuted. In this connection it is
not necessary that the person should be an assessee under the Income-tax Act. In
the case of an offence committed by a Company, Firm, Association of Persons or
Body of Individuals, every person in charge of or responsible for the conduct of the
business of the concern as well as the concern are deemed to be guilty. Similarly, in
the case of an offence by a Hindu Undivided Family, the karta thereof is deemed to
be guilty of the offence.
Is mens rea or culpable mental state or guilty intention necessary?
In case of willful act of omission or commission, the court shall presume the
existence of culpable mental state. However, the accused can rebut this presumption
by producing necessary evidence before the court. (Section 278E).
Can the offence be compounded?
Section 279(2) of Income-tax Act empowers a Chief Commissioner of Director
General of Income-tax to compound an offence either before or after the institution of
prosecution proceeding.
When public servant liable to be prosecuted?
If a public servant furnishes any information in contravention of the provisions of
Section 138(2), prosecution may be instituted against him with the previous sanction
of the Central Government. (Section 280).
PENALTIES
Updated with Amendment made vide Finance Act, 2016 and applicable for A.Y.
2017-18 and Onwards:
[AY 2017-18]

Section Nature of default Penalty leviable

(1) (2) (3)

140A(3) Failure to pay wholly or partly— Such amount as Assessing

Officer may impose but not
(a) self-assessment tax, or exceeding tax in arrears

(b) interest and fee, or

(c) both

under section 140A(1)

158BFA(2) Determination of undisclosed income of block Minimum : 100 per cent of

period tax leviable in respect of
undisclosed income

Maximum : 300 per cent of

tax leviable in respect of
undisclosed income.

221(1) Default in making payment of tax Such amount as Assessing

Officer may impose but not
exceeding amount of tax in
arrears

234E Failure to file statement within time prescribed in Rs. 200 for every day during
section 200(3) or in proviso to section 206C(3) which failure continues but
not exceeding tax
deductible/collectible

234F Default in furnishing return of income within time  a)  Rs. 5000 if return is
furnished on or before 31
December of assessment
year.
 b)  Rs. 10,000 in any other
 case
Note: if total income of the
person does not exceeds
Rs. 5 lakh then fee payable
shall be Rs. 1000

270A(1) Under-reporting and misreporting of income A sum equal to 50% of the

amount of tax payable on
under-reported income.
However, if under-reported
income is in consequence
of any misreporting thereof
by any person, the penalty
shall be equal to 200% of
the amount of tax payable
on under-reported income

271(1)(b) Failure to comply with a notice under section Fixed at Rs. 10,000 for each
115WD(2)/115WE(2)/142(1) or section 143(2) or failure.
failure to comply with a direction under section Note:- However, the above
142(2A) penalty shall not be levied
to and in relation to any
assessment for the A.Y
commencing on or after the
1st day of April, 2017.

271(1)(c) Concealment of particulars of income or fringe Minimum : 100 per cent

benefits or furnishing of inaccurate particulars of
income or fringe benefits Maximum : 300 per cent of
tax sought to be evaded in
addition to tax payable

Note:

‘Amount of tax sought to be

evaded’ shall be aggregate
of tax sought to be evaded
under the general
provisions and the tax
sought to be evaded under
the provisions of MAT or
AMT. However, if an
amount of concealed
income is considered both
under the general
provisions and provisions of
MAT or AMT, such amount
shall not be considered in
computing tax sought to be
evaded under provisions of
MAT or AMT. Further,
where provisions of MAT or
AMT are not applicable, the
computation of tax sought to
be evaded under the
provisions of MAT or AMT
 shall be ignored.

Note:- However, the above

penalty shall not be levied
to and in relation to any
assessment for the A.Y
commencing on or after the
1st day of April, 2017.

271(4) Distribution of profits by registered firm otherwise Not exceeding 150 per cent
than in accordance with partnership deed and as of difference between tax on
a result of which partner has returned income partner’s income assessed
below the real income and tax on income returned,
in addition to tax payable

Note:- However, the above

penalty shall not be levied
to and in relation to any
assessment for the A.Y
commencing on or after the
1st day of April, 2017.

271A Failure to keep, maintain, or retain books of Rs. 25,000

account, documents, etc., as required under
section 44AA

271AA(1) (1) Failure to keep and maintain information and 2% of value of each
documents required by section 92D(1) or 92D(2) international transaction/or
specified domestic
(2) Failure to report such transaction transaction entered into

(3) Maintaining or furnishing incorrect information

or document

271AA(2) Failure to furnish information and document as Rs. 5,00,000/-

required under Section 92D(4)

271AAA Where search has been initiated before 1-7-2012 10% of undisclosed income
and undisclosed income found

271AAB(1) Where search has been initiated on or after 1-7- (a) 10% of undisclosed
2012 but before 15-12-2016 and undisclosed income of the specified
income found previous year if assessee
admits the undisclosed
income; substantiates the
manner in which it was
derived; and on or before
the specified date pays the
tax, together with interest
thereon and furnishes the
return of income for the
specified previous year
declaring such undisclosed
income
 (b) 20% of undisclosed
income of the specified
previous year if assessee
does not admit the
undisclosed income, and on
or before the specified date
declare such income in the
return of income furnished
for the specified previous
year and pays the tax,
together with interest
thereon;

(c) 60% of undisclosed

income of the specified
previous year if it is not
covered by (a) or (b) above

271AAB(1A Where search has been initiated on or after 15- (a) 30% of undisclosed
) 12-2016 and undisclosed income found income of the specified
previous year if assessee
admits the undisclosed
income; substantiates the
manner in which it was
derived; and on or before
the specified date pays the
tax, together with interest
thereon and furnishes the
return of income for the
specified previous year
declaring such undisclosed
income
(b) 60% of undisclosed
income of the specified
previous year in any other
case.

271AAC Income determined by Assessing Officer includes 10% of tax payable under
any income referred to in section 68, section 69, section 115BBE.
section 69A, section 69B, section 69C or section
69D for any previous year. [if such income is not
included by assessee in his return or tax in
accordance with section 115BBE has not been
paid]

271B Failure to get accounts audited or furnish a report One-half per cent of total
of audit as required under section 44AB sales, turnover or gross
receipts, etc., or Rs.
1,50,000, which-ever is less

271BA Failure to furnish a report from an accountant as Rs. 1,00,000

required by section 92E

271BB Failure to subscribe any amount to units issued 20 per cent of such amount
under scheme referred to in section 88A(1)
271C Failure to deduct tax at source, wholly or partly, Amount equal to tax not
under sections 192 to 196D (Chapter XVII-B) or deducted or paid
failure to pay wholly or partly tax u/s 115-O(2) or
second proviso to section 194B

271CA Failure to collect tax at source as required under Amount equal to tax not
Chapter XVII-BB collected

271D Taking or accepting any loan or deposit or Amount equal to loan or

specified sum in contravention of the provisions of deposit or specified sum so
Section 269SS. taken or accepted
“Specified sum” means any sum of money
receivable, whether as advance or otherwise, in
relation to transfer of an immovable property,
whether or not the transfer takes place.

271DA Receiving an amount of Rs. 3 lakh or more from a Amount equal to such
person in a day [section 269ST] receipt

271E Repayment of any loan or deposit or specified Amount equal to loan or

advance otherwise than in accordance with deposit or specified
provision of Section 269T. advance so repaid
“Specified advance” means any sum of money in
the nature of advance, by whatever name called,
in relation to transfer of an immovable property,
whether or not transfer takes place.

271F Failure to furnish return as required by section Rs. 5,000

139(1) or by its provisos before the end of the Note: Applicable upto the
relevant assessment year Assessment year 2017-18

271FA1 Failure to furnish an annual information return as Rs. 100 per day of default
required under section 285BA(1) 2

Failure to furnish annual information return within Rs. 500 per day of default
the period specified in notice u/s 285BA(5)

271FAB Section 9A provides that fund management Rs. 5,00,000

activity carried out by an eligible offshore
investment fund through an eligible fund manager
acting on behalf of such fund shall not constitute
business connection in India (subject to certain
conditions).
The provision requires that eligible investment
fund shall furnish within 90 days from the end of
the financial year a statement, in respect of its
activities in a financial year, in the prescribed form
containing information relating to fulfilment of
specified conditions and such other information or
documents as may be prescribed. Penalty to be
levied if investment fund failed to comply with the
requirement.

271FB Failure by an employer to furnish the return of Rs. 100 for every day of
fringe benefits as required under section default
115WD(1)
271G3 Failure to furnish any information or document as 2% of the value of the
required by section 92D(3) international
transaction/specified
domestic transaction for
each failure

271GA Section 285A provides for reporting by an Indian Penalty shall be:
concern if following two conditions are satisfied: a) a sum equal to 2% of
a) Shares or interest in a foreign company or value of transaction in
entity derive substantial value, directly or respect of which such
indirectly, from assets located in India; and failure has taken place, if
b) Such foreign company or entity holds such such transaction had effect
assets in India through or in such Indian concern. of, directly or indirectly,
In this case, the Indian entity shall furnish the transferring right of
prescribed information for the purpose of management or control in
determination of any income accruing or arising in relation to the Indian
India under Section 9(1)(i). concern;
In case of any failure, the Indian concern shall be b) a sum of Rs. 5,000 in any
liable to pay penalty. other case.

271GB(1) Failure to furnish report under section 286(2) Rs. 5,000 per day upto 30
days and Rs. 15,000 per
day beyond 30 days

271GB(2) Failure to produce the information and documents Rs. 5,000 for every day
within the period allowed under section 271GB(6) during which the failure
continues.

271GB(3) Failure to furnish report or failure to produce Rs. 50,000 for every day for
information/documents under section 286 even which such failure continues
after serving order under section 271GB(1) or beginning from the date of
271GB(2) serving such order.

271GB(4) Failure to inform about inaccuracy in report Rs. 5,00,000

furnish under section 286(2)
Or furnishing of inaccurate information or
document in response to notice issued under
section 286(6).

271H4 Failure to deliver/cause to be delivered a W.e.f. 1-10-2014 Assessing

statement within the time prescribed in section Officer may direct payment
200(3) or the proviso to section 206C(3), or of penalty. Penalty shall not
furnishes incorrect information in the statement be less than Rs. 10,000 but
may extend to Rs. 1,00,000

271-I As per section 195(6) of the Act, any person Rs. 1,00,000
responsible for paying to a non-resident or to a
foreign company, any sum (whether or not
chargeable to tax), shall furnish the information
relating to such payment in Form 15CA and
15CB. Penalty shall be levied in case of any
failure.

271J Furnished incorrect information in any report or Rs. 10,000 for each
certificate by an accountant or a merchant banker incorrect report or certificate
or a registered valuer
272A(1) Refusal or failure to : Rs. 10,000 for each
failure/default
(a) answer questions

(b) sign statement

(c) attend to give evidence or produce books of

account, etc., in compliance with summons under
section 131(1)

(d)  comply with notice u/s 142(1), 143(2) or

failure to comply with direction issued u/s
142(2A).

272A(2) Failure to :

(a) furnish requisite information in respect of Rs. 10,000 for each

securities as required under section 94(6) ; failure/default. (In respect of
penalty for failure, in relation
(b) give notice of discontinuance of business or to a declaration mentioned
profession as required under section 176(3) ; in section 197A, a certificate
as required by section 203
(c) furnish in due time returns, statements or and returns u/ss 206 and
certificates, deliver de-claration, allow inspection, 206C and statements
etc., under sections 133, 134, 139(4A), 139(4C), under Section 200(2A) or
192(2C), 197A, 203, 206, 206C, 206C(1A) and section 200(3) or proviso to
285B; section 206C(3) or section
206C(3A), penalty shall not
(d) deduct and pay tax under section 226(2) exceed amount of tax
deductible or collectible)
(e) file a copy of the prescribed statement within
the time specified in section 200(3) or the proviso
to section 206C(3) (up to 1-7-2012)

(f) file the prescribed statement within the time

specified in section 206A(1)

(g) Failure to deliver or cause to be delivered a

statement under Section 200(2A) or Section
206C(3A) within prescribed time.
     With effect from June 1, 2015, it is mandatory
for an office of the Government, paying TDS or
TCS, as the case may be, without production of a
challan, to deliver a statement in the prescribed
form and manner to the prescribed authority.

272AA(1) Failure to comply with section 133B Not exceeding Rs. 1,000

272B Failure to comply with provisions of section Rs. 10,000

139A/139A(5)(c)/(5A)/(5C)

272BB(1) Failure to comply with section 203A Rs. 10,000 for each
failure/default

272BB(1A) Quoting false tax deduction account number/tax Rs. 10,000

 collection account number/tax deduction and
collection account number in
challans/certificates/statements/documents
referred to in section 203A(2)
Note : No penalty is imposable for any failure under sections 271(1)(b), 271A,
271AA, 271B, 271BA, 271BB, 271C, 271CA, 271D, 271E, 271F, 271FA, 271FAB,
271FB, 271G, 271GA, 271GB, 271H, 271-I, 272A(1)(c) or (d), 272A(2), 272AA(1),
272B, 272BB(1), 272BB(1A), 272BBB(1), 273(1)(b), 273(2)(b) and 273(2)(c) if the
person or assessee proves that there was reasonable cause for such failure (section
273B).
Section 273AA provides that a person may make application to the Principal
Commissioner/Commissioner for granting immunity from penalty, if (a) he has made
an application for settlement under section 245C and the proceedings for settlement
have abated; and (b) penalty proceeding have been initiated under this Act. The
application shall not be made after the imposition of penalty after abatement.
Read- Power of Principal Commissioner or Commissioner To Reduce Or Waive
Penalty
OFFENCES AND PROSECUTIONS
Updated with Amendment made vide Finance Act, 2017 and applicable for A.Y.
2017-18 and Onwards

Section Nature of default Punishment Fine

(rigorous
imprisonment)

(1) (2) (3) (4)

275A Contravention of order made under section 132(1) Up to 2 years No limit

(Second Proviso) or 132(3) in case of search and
seizure

275B Failure to afford necessary facility to authorised officer Up to 2 years No limit

to inspect books of account or other documents as
required under section 132(1)(iib)

276 Removal, concealment, transfer or delivery of property Up to 2 years No limit

to thwart tax recovery

276A Failure to comply with provisions of section 178(1) 6 months to 2 years —

and (3) re : company in liquidation

276AB Failure to comply with provisions of sections 269UC, 6 months to 2 years No limit
269UE and 269UL re : purchase of properties by
Government5

276B Failure to pay to credit of Central Government (i) tax 3 months to 7 years No limit
deducted at source under Chapter XVII-B (non-
cognizable offence under section 279A), or (ii) tax
payable u/s 115-O(2) or second proviso to section
194B
276BB Failure to pay the tax collected under the provisions of 3 months to 7 years No limit
section 206C

276C(1) Wilful attempt to evade tax, penalty or interest or

under-reporting of Income (non-cognizable offence
under section 279A)—

(a) where tax sought to be evaded exceeds Rs. 1 6 months to 7 years No limit
lakh (Rs. 25 lakh w.e.f. 1-7-2012)

(b) in other cases 3 months to 3 years No limit

(2 years w.e.f. 1-7-
2012)

276C(2) Wilful attempt to evade payment of any tax, penalty or 3 months to 3 years No limit
interest (non-cognizable offence under section 279A) (2 years w.e.f. 1-7-
2012)

276CC Wilful failure to furnish returns of fringe benefits

under section 115WD/115WH or return of income
under section 139(1) or in response to notice under
section 142(1)(i) or section 148 or section 153A (non-
cognizable offence under section 279A)—

(a) where tax sought to be evaded exceeds Rs. 1 6 months to 7 years No limit
lakh (Rs. 25 lakh w.e.f. 1-7-2012)

(b) in other cases 3 months to 3 years No limit

(2 years w.e.f. 1-7-
2012)

276CCC Wilful failure to furnish in due time return of total 3 months to 3 years No limit
income required to be furnished by notice u/s
158BC(a)

276D6 Wilful failure to produce accounts and documents Up to 1 year Rs. 4 to

7

under section 142(1) or to comply with a notice under Rs. 10 for

section 142(2A) every day
of default

277 False statement in verification or delivery of false

account, etc. (non-cognizable offence under section
279A)

(a) where tax sought to be evaded exceeds Rs. 1 6 months to 7 years No limit
lakh (Rs. 25 lakh w.e.f. 1-7-2012)

(b) in other cases 3 months to 3 years No limit

(2 years w.e.f. 1-7-
2012)

277A Falsification of books of account or document, etc., to 3 months to 3 years No limit

enable any other person to evade any tax, penalty or (2 years w.e.f. 1-7-
interest chargeable/leviable under the Act 2012)
 278 Abetment of false return, account, statement or
declaration relating to any income or fringe benefits
chargeable to tax (non-cognizable offence under
section 279A)

(a) where tax, penalty or interest sought to be 6 months to 7 years No limit

evaded exceeds Rs. 1 lakh (Rs. 25 lakh w.e.f. 1-
7-2012)

(b) in other cases 3 months to 3 years No limit

(2 years w.e.f. 1-7-
2012)

278A Second and subsequent offences under section 276B, 6 months to 7 years No limit
276C(1), 276CC, 277 or 278

280(1) Disclosure of particulars by public servants in Up to 6 months No limit

contravention of section 138(2) [Prosecution to be (simple/rigorous)
instituted with previous sanction of Central
Government under section 280(2)]
Notes :
1. No person is punishable for any failure under section 276A, 276AB or 276B if he
proves that there was reasonable cause for such failure (vide section 278AA).