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manish (service)     18 August 2009

what are penalties if guilty found under section 143(2)

hi i want to know about the penalties, fines and other punishments for guilty found under section 143(2) of income tax act 1961.

i'll be very thankful if some body help me.


 4 Replies

A V Vishal (Advocate)     18 August 2009


Basically 143(2) notice is issued for scrutiny of accounts for a return filed u/s. 139 or under a notice u/s. 142.

After the books are scrutinized and any arthimethical errors or any non disclosure of income or wrong claims of deductions/exemptions are adjusted and the true income is arrived and tax computed thereon . Any Advance Tax, TDS or self assessment tax paid will be adjusted and the balance shall be payable by the assessee.

The penalty for contravening the act viz.  wrong disclosure of income, wrong claim of deductions/exemptions shall lead to proceedings under S.271(1)(c). The minimum penalty u/s. 27(1)(c) is 100% of tax payable and maximum penalty is 300% of such  tax evaded.

Dinyar (Law Research)     19 August 2009

There is one case law "Chandrapal vs. ITAT 261 ITR 67 which states that 'Where the assessee had claimed examption after disclosing the relevant basic facts, penalty was not levied".

Also in CIT vs. Ajaib 253 ITR 630 it was pointed out that 'mere disallowance of an expense does not mean that the assessee has furnished incorrect particulars of its income.

Sivadas Chettur (Chartered accountant)     24 September 2009

In addition to the penalty u/s 271(1)(c) the assessee may be visted with penalty u/s 269SS and 269TT as per 271D and 271 E respectively in addition to the various penalties u/s 271 series.

Vineet (Director)     06 October 2009

The penalties leviable post issue of notice u/s 143(2) are:

U/s 271(1)(b) for Non compliance-Max Rs 10,000 for each occasion

U/s 271(1)(c) for concealment of furnishing inaccurate particulars of income 100% to 300% of tax on such income

u/s 271D for failure to comply with section 269SS equal to the amount of loan or deposit accepted

u/s 271E for failure to comply with section 269T equal to the sum/loan repaid

further penalties u/s 271A, 271B may also be levied if found during the assessment proceedings that assessee has not maintined prescribed books of accounts or failed to get them audite if required.

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