AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
Failure to furnish returns, comply with notices, concealment of income, etc
X X X X Extracts X X X X
X X X X Extracts X X X X
....able] by him, 16[a sum of ten thousand rupees] for each such failure;] 17[(iii) in the cases referred to in clause (c) 18[or clause (d)], 19[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 income 21[or fringe benefits] or the furnishing of inaccurate particulars of such income 22[or fringe benefits]. 23[****]] 24[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 25[Assessing] Officer or 57[the Joint Commissioner (Appeals) or the Commissioner (Appeals)] 28[or the 54A[Principal Commissioner or] Commissioner] to be false, or (B) such person offers an explanation which he is not able to substantiate 29[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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r (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.] 55[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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....red 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, 38[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 39[54B[Principal Chief Commissioner or] Chief Commissioner or 54C[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 be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....curate particulars have been furnished, unless the assessee proves to the satisfaction of the Assessing Officer or 57[the Joint Commissioner (Appeals) or the Commissioner (Appeals)] 44[or the 54D[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.] 45[(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.] 52[(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 cl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....comply with notices. If the Assessing Officer, in the course of any proceedings under this Act, is satisfied that any person has failed to comply with a notice under sub-section (1) of section 142 or sub-section (2) of section 143 or with a direction issued under sub-section (2A) of section 142, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum which shall not be less than one thousand rupees but which may extend to twenty-five thousand rupees for each such failure." Earlier, Substituted vide Section 106 of the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 01-04-1989 before it was read as, "Failure to furnish returns, comply with notices, concealment of income, etc. 271. (1) If the Assessing Officer or the Deputy Commissioner (Appeals) or the Commissioner (Appeals) in the course of any proceedings under this Act, is satisfied that any person- (a) has failed to furnish the return of total income which he was required to furnish under sub-section (1) of section 139 or by notice given under sub-section (2) of section 139 or section 148 or has failed to furnish it within the time allowed and in the manner required by sub section (1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f 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 Assessing Officer or the Deputy Commissioner (Appeals) or the Commissioner (Appeals) to be false, or (B) such person offers an explanation which he is 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. 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 earl....
X X X X Extracts X X X X
X X X X Extracts X X X X
...."the amount of tax sought to be evaded",- (a) in any case where the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished exceeds the total income assessed, means the 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; (b) in any case to which Explanation 3 applies, means the tax on the total income assessed; (c) in any other case, means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished. Explanation 5 : Where in the course of a search under section 132, 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ty for failure to furnish the return of his total income under sub-section (1) of section 139 shall be imposed under sub-section (1) on an assessee whose total income does not exceed the maximum amount not chargeable to tax in his case by one thousand five hundred rupees ; (b) where a person has failed to comply with a notice under sub-section (2) of section 139 or section 148 and proves that he has no income liable to tax, the penalty imposable under sub-section (1) shall not exceed twenty-five rupees; (c) no penalty shall be imposed under sub-section (1) upon any person assessable under clause (i) of sub-section (1) of section 160, read with section 161, as the agent of a non-resident for failure to furnish the return under sub-section (1) of section 139 ; (d) the penalty imposed under clause (i) of sub-section (1) and the penalty imposed under clause (iii) of that sub-section, read with Explanation 3 thereto, shall not exceed in the aggregate twice the amount of the tax sought to be evaded : Provided that nothing contained in clause (a) or clause (b) shall apply to a case referred to in sub-clause (a) of clause (i) of sub-section (1). (4) If the Assessing Officer or th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was read as, "without reasonable cause" 8. Inserted vide Section 58 of the Finance Act, 2005 w.e.f. 01-04-2006 9. Inserted vide Section 61 of the Taxation Laws (Amendment) Act, 1975 w.e.f. 01-04-1976 10. Omitted vide Section 40 of the Finance Act, 1964 w.e.f. 01-04-1964 before it was read as, "deliberately" 11. Substituted vide Section 58 of the Finance Act, 2005 w.e.f. 01-04-2006 before it was read as, "income," 12. Inserted vide Section 58 of the Finance Act, 2005 w.e.f. 01-04-2006 13. Omitted vide Section 50 of the Direct Tax Laws (Amendment) Act, 1989 w.e.f. 01-04-1989 before it was read as, "(i) in the cases referred to in clause (a),- (a) in the case of a person referred to in sub-section (4A) of section 139, where the total income in respect of which he is assessable as a representative assessee does not exceed the maximum amount which is not chargeable to income-tax, a sum not exceeding one per cent of the total income computed under this Act without giving effect to the provisions of sections 11 and 12, for each year or part thereof during which the default continued; (b) in any other case, in addi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....all not be less than, but which shall not exceed twice, the amount of the income in respect of which the particulars have been concealed or inaccurate particulars have been furnished." Earlier, Substituted vide Section 19 of the Finance Act, 1968 w.e.f. 01-04-1968 before it was read as, "(iii) in the cases referred to in clause (c), in addition to any tax payable by him, a sum which shall not be less than twenty per cent but which shall not exceed one and a half times the amount of the tax, if any, which would have been avoided if the income as returned by such person had been accepted as the correct income." 18. Inserted vide Section 58 of the Finance Act, 2005 w.e.f. 01-04-2006 19. Substituted vide Section 101 of the Finance Act, 2002 w.e.f. 01-04-2003 before it was read as, "in addition to any tax payable" 20. Substituted vide Section 50 of the Direct Tax Laws (Amendment) Act, 1989 w.e.f. 01-04-1989 before it was read as, "twice" 21. Inserted vide Section 58 of the Finance Act, 2005 w.e.f. 01-04-2006 22. Inserted vide Section 58 of the Finance Act, 2005 w.e.f. 01-04-2006 23. Omitted vide Section 50 of the Di....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent & Miscellaneous Provisions) Act, 1986 w.e.f. 10-09-1986 before it was read as, "Provided that nothing contained in this Explanation shall apply to a case referred to in clause (B ) in respect of any amount added or disallowed as a result of the rejection of any explanation offered by such person, if such explanation is bona fide and all the facts relating to the same and material to the computation of his total income have been disclosed by him." 31. Substituted vide Section 50 of the Direct Tax Laws (Amendment) Act, 1989 w.e.f. 01-04-1989 before it was read as, "Explanation 3: Where any person who has not previously been assessed under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act, fails, without reasonable cause, to furnish within the period specified in sub-clause (iii) of clause (a) of 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 first day of April, 1974, and, until the expiry of the period aforesaid, no notice has been issued to him under sub-section (2) of section 139 or section 148 and the Assessing Officer ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssioner" 40. Omitted vide Section 50 of the Direct Tax Laws (Amendment) Act, 1989 w.e.f. 01-04-1989 before it was read as, "clause (a) or clause (b) of" 41. Substituted vide Section 74 of the Finance (No.2) Act, 2009 w.e.f. 01-06-2007 before it was read as, "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 (hereinafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him by utilizing (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 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 the search and the due date for filing the return of income for such year has expired and the assessee has not filed the return, then, notwithstanding that such income is declared by him in any return o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) of sub-section (1) the Commissioner may, in his discretion- (i) reduce or waive the amount of minimum penalty imposable on a person under clause (i) of sub-section (1) for failure, without reasonable cause, to furnish the return of total income which such person was required to furnish under sub-section (1) of section 139, or (ii) reduce or waive the amount of minimum penalty imposable on a person under clause (iii) of sub-section (1), if he is satisfied that such person- (a) in the case referred to in clause (i) of this sub-section has, prior to the issue of notice to him under sub-section (2) of section 139, voluntarily and in good faith, made full disclosure of his income; and in the case referred to in clause (ii) of this sub-section has, prior to the detection by the Income-tax Officer, of the concealment of particulars of income in respect of which the penalty is imposable, or of the inaccuracy of particulars furnished in respect of such income, voluntarily and in good faith, made full and true disclosure of such particulars; (b) has co-operated in any enquiry relating to the assessment of such income; and (c) has either paid or made satisfactory arrangements fo....