Rationalisation of penalty provisions relating to under-reported income

Section 270A contains provisions relating to penalty for under-reporting and misreporting of income. The existing provisions provide for various situations for the purposes of levy of penalty under this section. However, these provisions do not contain the mechanism for determining under-reporting of income and quantum of penalty to be levied in the case where the person has under-reported income and furnished the return of income for the first time under section 148 of the Act.

In order to provide for manner of computing the quantum of penalty in a case where the person has under-reported income and furnished his return for the first time under section 148, it is proposed to suitably amend the provisions of section 270A.

These amendments will take effect retrospectively from 1st April, 2017 and will, accordingly, apply in relation to assessment year 2017-2018 and subsequent assessment years.

[Clause 61]

 

 

 

Penalty computation for under-reported income clarified for returns filed during reassessment, applied retrospectively to relevant assessment years. Amendments prescribe the method to compute the quantum of penalty where a taxpayer under-reports income and furnishes a return for the first time during reassessment proceedings; they address the existing absence of such a computation mechanism and apply retrospectively to cover specified assessment years.