The section provides that a penalty of Rs 25,000 may be imposed on a person by the Assessing Officer, the Joint Commissioner (Appeals) or the Commissioner (Appeals) if he fails to keep and maintain the books of account and other documents as per section 62 or the rules made under it, in respect of any tax year, or fails to retain such books and documents for the period specified in those rules.
Why it is there
The duty to maintain and to retain books is what makes assessment possible, and without a sanction it would be an obligation with no consequence. The section fixes a single amount and puts the power to impose it with the officer or appellate authority before whom the failure surfaces.
Who it applies to
A person required by section 62 or the rules to keep and maintain books of account and other documents
A person required to retain them for the period specified in the rules
The Assessing Officer, the Joint Commissioner (Appeals) and the Commissioner (Appeals)
The figures, and what each one turns on
Read the condition in the same row. A figure quoted without it is a wrong answer with a citation attached.
What
Figure
The condition on it
Where
Penalty for failure to keep, maintain or retain books
Rs 25,000
Failure to keep and maintain books and documents as per section 62 or the rules in respect of any tax year, or to retain them for the period specified in the rules
Section 441
What this means in practice
There are two separate defaults and either is enough: clause (a) is a failure to keep and maintain, tested against section 62 and the rules for the tax year in question, and clause (b) is a failure to retain properly maintained books, which can arise years after the accounts were correctly written up. The penalty is a single stated amount rather than a range, but it is not automatic — the section says a penalty may be imposed. And the power is not the Assessing Officer's alone, so the point can be taken at the appellate stage.
An example
Illustrative only, and invented for this page. The figures are chosen to show the rule biting, not taken from any real matter.
A person required by section 62 to maintain books for a tax year produces nothing when they are called for, and the Assessing Officer may impose Rs 25,000 under clause (a). Another person maintained the books properly but destroyed them before the retention period in the rules had run — clause (b) is attracted on its own, and the earlier compliance is no answer.
Where you meet this section
In a penalty notice issued after an assessment or in an appellate proceeding where books called for could not be produced. Because the Joint Commissioner (Appeals) and the Commissioner (Appeals) are named alongside the Assessing Officer, it can be met at the appeal stage too.
The words themselves
A penalty of Rs. 25000 may be imposed on a person by the Assessing Officer or the Joint Commissioner (Appeals) or the Commissioner (Appeals)
Section 441, Income-tax Act, 2025.
What people get wrong
Treating the penalty as automatic. The section says it may be imposed.
Assuming only the Assessing Officer can impose it. Both appellate authorities are equally named.
Reading Rs 25,000 as a maximum to be scaled down. The section states a single amount, not a range.
Overlooking retention as a separate default under clause (b), even where the books were properly maintained.
Assuming one penalty covers several years. Clause (a) frames the default by reference to a tax year.
What this replaced
The correspondence is the Income Tax Department’s own, from its comparison utility for the 1961 and 2025 Acts. A renumbering is the easy half; whether the words changed is the half that decides cases.
271A - Failure to keep, maintain or retain books of account, documents, etc.
Read this before you rely on it. Every decision below was decided under the Income-tax Act, 1961. It appears here because it is tagged to a 1961 provision that the department’s own mapping carries to section 441. That is an inference we have drawn, not a holding on the new section: where the words changed in the move, the reasoning may not survive. Treat this as the place to start looking, not as authority on the 2025 Act.
Haresh Ghanshyamdas Makhija v ITOITATHelps taxpayertagged s.271A They already penalised me under 271A for keeping no books. Can they levy 271B on top?
Lokesh Kumar Sharma v ITOITATHelps taxpayertagged s.271A I never maintained books at all. Can they penalise me under 271B for not getting them audited?
Somnath Ghosh v ITOITATHelps taxpayertagged s.271A I kept no books at all. Can they penalise me under 271B for not getting the accounts audited?
What this page does not tell you. It does not reproduce the section. Everything above was written from the section’s own text as the Income Tax Department publishes it — the text is here, and nothing here is advice on your facts. Where a figure matters, read the sub-section it comes from.