95[Failure to furnish returns, comply with notices, concealment of income,
etc.
96271. (1) If the 97[Assessing] Officer or the 98[***] 99[Commissioner (Appeals)] 1[or the Commissioner] in
the course of any proceedings under this Act, is satisfied that any person—
(a) 2[* * *]
(b) has 3[* * *] failed to
comply with a notice 4[under sub-section
(2) of section 115WD or under sub-section (2) of
section 115WE or] under sub-section (1) of section 142 or sub-section (2) of section 143 5[or fails to comply
with a direction issued under sub-section (2A) of section
142], or
(c) has concealed the particulars of his income or
6[* * *] furnished
inaccurate particulars of 7[such income, or] 8
9[(d) has concealed the particulars of
the fringe benefits or furnished inaccurate particulars of such fringe
benefits,]
he may direct that such
person shall pay by way of penalty,—
(i) 10[* * *]
11[(ii) in
the cases referred to in clause (b),
12[in addition to tax, if
any, payable] by him, 13[a sum of ten
thousand rupees] for each such failure ;]
14[(iii) in
the cases referred to in clause (c)
15[or clause (d)], 16[in addition to tax, if
any, payable] by him, a sum which shall not be less than, but which shall not
exceed 17[three times], the amount
of tax sought to be evaded by reason of the concealment of particulars of his
income 18[or fringe benefits]
or the furnishing of inaccurate particulars of such income 18[or fringe benefits].
19[* * *]
20[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 explana- tion which is found by the 21[Assessing] Officer or the 22[***] 23[Commissioner (Appeals)] 24[or the Commissioner] to be
false, or
(B) such person offers an explanation which he is
not able to substantiate 25[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.
26[* * *]
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 earlier assessment year immediately preceding the year in which the
receipt, deposit, outgoing or investment appears (such earlier assessment year
hereafter in this Explanation
referred to as the first preceding year) which is sufficient to cover the
amount represented by such receipt, deposit or outgoing or value of such
investment (such amount or value hereafter in this Explanation referred to as the utilised amount) shall be
treated as the income of the assessee, particulars of which had been concealed
or inaccurate particulars of which had been furnished for the first preceding
year; and where the amount so added or deducted in the first preceding year is
not sufficient to cover the utilised amount, that part of the amount so added
or deducted in the year immediately preceding the first preceding year which is
sufficient to cover such part of the utilised amount as is not so covered shall
be treated to be the income of the assessee, particulars of which had been
concealed or inaccurate particulars of which had been furnished for the year
immediately preceding the first preceding year and so on, until the entire
utilised amount is covered by the amounts so added or deducted in such earlier
assessment years.
27[Explanation 3.—Where any person 28[***] fails, without
reasonable cause, to furnish within the period specified in 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 1st day of April, 1989, and
until the expiry of the period aforesaid, no notice has been issued to him
under clause (i) of sub-section
(1) of section 142 or section
148 and the Assessing Officer or the 29[***] Commissioner
(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.]
Explanation
4.—For the purposes of clause (iii)
of this sub-section, the expression “the amount of tax sought to be evaded”,—
30[(a) in
any case where the amount of income in respect of which particulars have been
concealed or inaccurate particulars have been furnished has the effect of
reducing the loss declared in the return or converting that loss into income,
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 31[as reduced by the
amount of advance tax, tax deducted at source, tax collected at source and
self-assessment tax paid before the issue of notice under section 148];
(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.]
32[Explanation 5.—Where in the course of a 33[search initiated under section 132 before the 1st day of June, 2007], 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 date of the search, but the return of income for such year has not been
furnished before the said date or, where such return has been furnished before
the said date, such income has not been declared 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, 34[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 35[Chief 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 been disclosed so far in his return of income to be furnished before
the expiry of time specified in 36[* * *] sub-section (1) of section 139, and also specifies in the statement the
manner in which such income has been derived and pays the tax, together with
interest, if any, in respect of such income.]
37[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 (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 for any previous
year; or
(ii) any income based on any entry in any books of
account or other documents or transactions and he 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 search and,—
(a) where the return of income for such
previous year has been furnished before the said date but such income has not
been declared therein; or
(b) the due date for filing the return of income
for such previous year has expired but the assessee has not filed the return,
then, notwithstanding that such income is declared by him
in any return of income furnished on or after the date of 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[Explanation 6.—Where any adjustment is
made in the income or loss declared in the return under the proviso to clause (a) of sub-section (1) of section 143 and additional tax charged under that
section, the provisions of this sub-section shall not apply in relation to the
adjustment so made.]
39[Explanation 7.—Where in the case of an assessee who has
entered into an international transaction defined in section
92B, any amount is added or disallowed in computing the total income under
sub-section (4) of section 92C, then, the amount
so added or disallowed 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 or
inaccurate particulars have been furnished, unless the assessee proves to the
satisfaction of the Assessing Officer or the Commissioner (Appeals) 40[or the 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.]
41[(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.]
42[(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 clause (c).]
(2) When the person liable
to penalty is a registered firm or an unregistered firm which has been assessed
under clause (b) of section 183 43, then notwithstanding anything
contained in the other provisions of this Act, the penalty imposable under
sub-section (1) shall be the same amount as would be imposable on that firm if
that firm were an unregistered firm.
(3) 44[Omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.]
(4) If the 45[Assessing] Officer or the 46[***] 47[Commissioner (Appeals)] in
the course of any proceedings under this Act, is satisfied that the profits of
a registered firm have been distributed otherwise than in accordance with the
shares of the partners as shown in the instrument of partnership on the basis
of which the firm has been registered under this Act, and that any partner has
thereby returned his income below its real amount, he may direct that such
partner shall, in addition to the tax, if any, payable by him, pay by way of
penalty a sum not exceeding one and a half times the amount of tax which has
been avoided, or would have been avoided if the income returned by such partner
had been accepted as his correct income; and no refund or other adjustment
shall be claimable by any other partner by reason of such direction.]
(4A) and (4B) [Omitted by the Taxation Laws (Amendment) Act, 1975,
w.e.f. 1-10-1975. Original sub-sections (4A) and (4B) were inserted by the
Income-tax (Amendment) Act, 1965, w.e.f. 12-3-1965. Later on sub-section (4A)
was substituted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971.]
48[(5) The provisions
of this section as they stood immediately before their amendment by the Direct
Tax Laws (Amendment) Act, 1989 shall apply to and in relation to any assessment
for the assessment year commencing on the 1st day of April, 1988, or any
earlier assessment year and references in this section to the other provisions
of this Act shall be construed as references to those provisions as for the
time being in force and applicable to the relevant assessment year.]
49[(6) Any reference in this
section to the income shall be construed as a reference to the income or fringe
benefits, as the case may be, and the provisions of this section shall, as far
as may be, apply in relation to any assessment in respect of fringe benefits
also.]