Section 271J — the law in short
What the courts have decided on section 271J, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Danfoss Power Solutions Pvt Ltd v CIT(A)-38, New Delhi
ITATHelps taxpayerValidity unconfirmed
The Commissioner (Appeals) has levied a penalty under s.271J on my company because my accountant's Form 3CEB was said to contain incorrect information. Can the penalty be levied on me at all?
No. s.271J allows a penalty only against the accountant, merchant banker or registered valuer who furnished the incorrect information, and not against the assessee on whose behalf the report or certificate was furnished. The Tribunal held the penalty could not be levied on the assessee and directed its deletion.
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Statutory position — s.271J: the Rs 10,000 penalty on the accountant, merchant banker or registered valuer personally
CBDT Circulars & InstructionsCuts both ways
A notice under section 271J has come to me, the chartered accountant who signed the report, not to my client. On what can it be levied, and how much?
Section 271J allows the Assessing Officer or the Commissioner (Appeals), in the course of any proceedings under the Act, to direct an accountant, a merchant banker or a registered valuer who has furnished incorrect information in any report or certificate under the Act or the Rules to pay a penalty of Rs 10,000 for each such report or certificate. It reaches only those three classes of person, each defined in the Explanation; it cannot be levied on the assessee who filed the report.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.