Comparison of section 443 "Penalty in respect of certain income." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....cument. Background & Scope Statutory hooks: Clause 443 refers to sections 102, 103, 104, 105, 106 and section 195(1)(i); it also (in sub-section (5)) expressly refers to sections 471 and 472. The clause sits under the PENALTIES heading of the Income Tax Bill, 2025 (Old Version). The short explanatory sentence in the Bill identifies the target incomes as those including "cash credits, unexplained investment, unexplained money, unexplained expenditure, amount of investment ... and amount borrowed or repaid on hundi." No definitions are supplied within the clause itself; it relies on the definitions and meanings in the referenced sections (102-106). The clause applies where "the income determined in his case for any tax year includes any inc....

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....ing authority. The cross-references to existing sections (102-106 and 195) anchor scope: the clause does not redefine the categories but imports them. The proviso in sub-section (3) operates as an incentive for voluntary disclosure in returns and timely payment of the 195(1)(i) tax. Exceptions/Provisos Carve-outs and conditions explicitly stated: * Sub-section (3): No penalty where the relevant income has been included in the return furnished u/s 263 and tax under 195(1)(i) has been paid on or before the end of the relevant tax year. * Sub-section (4): Prohibits simultaneous imposition of penalty u/s 439 for the same income. * Sub-section (5): Procedural application of sections 471 and 472 (only in the Bill text). Illustrations *....

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.... a sub-section (5): "The provisions of sections 471 and 472 shall as far as may be, apply in relation to the penalty referred to in this section." The enacted statute (Section 443, Income-tax Act, 2025) omits this sub-section (5). * Explanatory material: The Bill text includes an explanatory line stating the clause "seeks to provide for imposition of penalty, if the income which includes any cash credits, unexplained investment, unexplained money, unexplained expenditure, amount of investment, etc., not fully disclosed in books of account and amount borrowed or repaid on hundi." The enacted section in Document 1 contains only the statutory text and does not carry this explanatory sentence. * Practical impact * Procedural regime: The o....

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....n whether sections 471/472 apply "as far as may be" to this penalty. Practical Implications * Compliance and risk: Assessments that characterise receipts as falling u/ss 102-106 expose assessees to an additional 10% penalty on tax u/s 195(1)(i). Timely disclosure and payment (as per sub-section (3)) mitigate the penalty risk. * Record-keeping: Taxpayers engaged in transactions that may be classified as cash credits, unexplained investments, unexplained money/expenditure, investments or hundi transactions should keep contemporaneous documentation to evidence disclosure in returns and tax payment within the relevant year. * Administrative procedure: If sections 471 and 472 apply (as stated in the Bill), practitioners should follow the ....