An income tax notice is a taxpayer’s opportunity to make amends with respect to any defaults. Penalty under Section 272A is imposed on a taxpayer for non-compliance with income tax notice issued under Section 142(1) or Section 143(2), or failure to comply with the mandate issued under Section 142(2A). In this article, we look at Section 272A of Income Tax in detail.
Section 272A of Income Tax
The statement of the income tax department pertaining to Section 272A has been reproduced below:
272A (1)(d)- Fails to comply with a notice under sub-section (1) of section 142 or sub-section (2) of section 143 or fails to comply with a direction issued under sub-section (2A) of section 142,- Rs. 10,000/- for each default.
The section has been amended with effect from the 1st of July 2015. A notification of the amendment has been reproduced below.
Amendment of section 272A.
76. In section 272A of the Income-tax Act, in sub-section (2), with effect from the 1st day of June, 2015,—
| (a) | after clause (i), the following clause shall be inserted, namely:— | |
| “(m)to deliver or cause to be delivered a statement within the time as may be prescribed under sub-section (2A)of section 200 or sub-section (3A)of section 206C,”; | ||
| (b) | in the first proviso, for the words, brackets, figures and letter “statements under sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C”, the words, brackets, figures and letters “statements under sub-section (2A)or sub-section (3) of section 200 or the proviso to sub-section (3) or under sub-section (3A)of section 206C” shall be substituted. |
Section 142(1)
Section 142(1) includes provisions pertaining to the issue of notice to a taxpayer. This section of income tax authorizes the Assessing Officer to issue notice directing the taxpayer to comply with any of the following requirements, as may be applicable:
- File the income tax return, if it hasn’t been filed.
- Produce or cause to be produced required accounts or documents.
- Furnish in writing the requisite information in the prescribed manner, which includes a statement of assets and liabilities of the taxpayer.
Section 142(2A)
Section 142 (2A) contains provisions pertaining to special audit. This section of income tax stipulates that subject to the satisfaction of conditions justifying special audit, the Assessing Officer may direct the taxpayer to get his/her accounts audited or re-audited from a Chartered Accountant nominated by the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner or Commissioner.
Section 143(2)
Section 143(2) of Income Tax Act includes provisions pertaining to the issue of notice before conducting a scrutiny assessment under Section 143(3).
Penalty under Section 272A
If the taxpayer is not compliant with respect to the notice issued under Section 142(1) or Section 143(2) or fails to comply with an order issued under Section 142 (2A), he/she will be required to remit a penalty which amounts to a sum of Rs 10,000 for each failure.
Note, from 1st April 2018 the rules for penalty for late filing income tax return has changed. Now, taxpayers will have to pay a penalty of Rs.5000 if income tax return is late filed between 1st August and 31st December. If an income tax return is late filed after 31st December, then a penalty of Rs.10,000 will be levied. The penalty for late filing income tax return has been capped at Rs.1000 for taxpayers having a taxable income of less than Rs.1000.
