Penalty

Penalty — the law in short

Every authority in this library on penalty, with what each one decided.

• Vijay Krishnaswami v DDIT (Investigation) Supreme CourtHelps taxpayer
  The Settlement Commission accepted my disclosure. Can the department still prosecute me for evasion?
  No. Every order of settlement is conclusive under s.245-I, so where the Commission has recorded full and true disclosure the factual foundation for a wilful attempt to evade under s.276C(1) is gone and continuing the prosecution is an abuse of process. The prosecution was quashed and costs of Rs. 2,00,000 were imposed on the Revenue.
• RBANMS Educational Institution v B. Gunashekar Supreme CourtHelps department
  The section 269ST penalty falls on the person who receives the cash. If I am the buyer paying cash for property, am I exposed at all?
  Yes, but on a different footing. The Supreme Court confirmed that under section 269ST, with the penalty in section 271DA, action is to be taken on the recipient - and said in the same breath that there is also an onus on the person paying to disclose the source of such large cash. It then built the machinery by which such a payment reaches the department: a civil court before which a suit claims payment of Rs 2,00,000 or more in cash must intimate the jurisdictional Income-tax Department, and a Sub-Registrar before whom a document reciting cash consideration of that amount is presented for registration must do the same.
• K. Krishnamurthy v DCIT Supreme CourtCuts both ways
  After a search the Assessing Officer levied 10% penalty under section 271AAA on my entire assessed income — can it be confined to the part that was really undisclosed?
  It depends on how each slice of income came to light. The Supreme Court held on 13 February 2025 that penalty under section 271AAA is not automatic: the Assessing Officer must first show that the amount is undisclosed income of the specified previous year found in the course of the search. On the Rs.2,27,65,580 the assessee had admitted in his section 132(4) statement, explained the manner of earning and on which he paid tax with interest — late, but paid — the immunity in section 271AAA(2) applied and no penalty was leviable. Penalty at 10% survived only on Rs.2,49,90,000 offered later, during assessment.
• US Technologies International Pvt Ltd v CIT Supreme CourtHelps taxpayer
  You deducted the TDS but paid it late. Is penalty under s.271C leviable?
  No. Section 271C(1)(a) is attracted by a failure to deduct, not by late payment of tax already deducted. But interest under s.201(1A) still runs, and prosecution under s.276B remains available — this is not an amnesty.
• Singapore Airlines Ltd v CIT Supreme CourtCuts both ways
  My agents keep the difference between the price they charge customers and the net price they pay me — do I have to deduct TDS on money that never passed through my hands?
  Yes. The Supreme Court held on 14 November 2022 that the supplementary commission retained by IATA travel agents — the excess of the actual fare charged to the passenger over the net fare payable to the airline — is "commission" under section 194H, and the airlines were bound to deduct tax at source on it. Section 194H is read with section 182 of the Contract Act: where the contract shows a principal-agent relationship, the definition is attracted. But because the agents had paid tax on those amounts, no recovery of the shortfall could be made from the airlines; only interest under section 201(1A) survives, and the section 271C penalties were quashed.
• CIT v SSA's Emerald Meadows Supreme CourtHelps taxpayer
  The penalty notice does not say whether I concealed income or filed inaccurate particulars. Does that matter?
  It does. A penalty notice that does not specify which limb is alleged is reported as defective — you cannot answer a charge that has not been made.
• CIT v Bank of Nova Scotia Supreme CourtHelps taxpayer
  I have paid the short-deducted tax and the interest to close the matter — can the department still levy penalty under section 271C?
  No, not on findings like these. The Supreme Court dismissed the Revenue's appeal on 7 January 2016, holding there was no substantial question of law and that the Commissioner (Appeals) and the Tribunal had assessed the facts and the law properly and correctly. The Tribunal had cancelled the section 271C penalty on the footing that the case was not about recovery under section 201(1) or compensatory interest under section 201(1A) — both already paid to end the dispute — and that penalty requires contumacious conduct on the part of the assessee to be established, following the Delhi High Court in Itochu Corporation and Mitsui & Company.
• CIT v Jai Laxmi Rice Mills Supreme CourtHelps taxpayer
  The assessment in which the s.271E satisfaction was recorded has been set aside. Can the penalty stand?
  No. The Supreme Court held that once the original assessment order was set aside, the satisfaction recorded in it for initiating penalty under s.271E did not survive, and a penalty imposed on the basis of that order could not be sustained.
• MAK Data P Ltd v CIT Supreme CourtHelps department
  You surrendered the amount to buy peace and avoid litigation. Does that stop the penalty?
  No. The statute does not recognise 'to avoid litigation' or 'to buy peace' as an explanation at all. A surrender made only after the department confronts you with documents is not voluntary, and the penalty stood.
• Price Waterhouse Coopers Pvt Ltd v CIT Supreme CourtHelps taxpayer
  You forgot to add back something your own audit report flagged. Is that concealment?
  No. It is a bona fide and inadvertent human error — a computation mistake, not concealment or inaccurate particulars. The audit report disclosed the item, so nothing was hidden, and the penalty was deleted.
• Radheshyam Kejriwal v State of West Bengal Supreme CourtHelps taxpayerValidity unconfirmed
  The department dropped the penalty proceedings against me after finding the charge not made out. Can it still run the criminal prosecution on exactly the same allegation?
  No, on these facts. The Supreme Court divided. Sathasivam J would have dismissed the appeal, holding that adjudication and prosecution under the Foreign Exchange Regulation Act are independent and that the adjudicating officer's exoneration is at most a point for the accused to urge before the Magistrate. Chandramauli Kr. Prasad J, with Bedi J, declined to subscribe to that view, so the majority allowed the appeal and the prosecution could not continue. The majority accepted that the two proceedings are independent and can run together, but treated it as a different question once the adjudication has ended in exoneration on the same allegation.
• CIT v Reliance Petroproducts Pvt Ltd Supreme CourtHelps taxpayer
  The officer disallowed your claim. Does a disallowance automatically bring penalty with it?
  No. Section 271(1)(c) needs either concealment or particulars that are factually false. Where everything was disclosed truthfully and only the legal claim was untenable, there is nothing inaccurate — and no penalty.
• CIT v Atul Mohan Bindal Supreme CourtCuts both waysValidity unconfirmed
  Is penalty under s.271(1)(c) criminal, quasi-criminal or civil?
  Civil — a strict liability, so mens rea need not be established. But the conditions of the section must still be satisfied, and the matter was sent back to be reconsidered on that footing.
• Union of India v Rajasthan Spinning & Weaving Mills Supreme CourtCuts both ways
  After Dharmendra Textile, does penalty follow automatically from every default?
  No. Whether the penalty provision applies at all depends on the conditions expressly stated in it. Once it does apply, the authority loses discretion over the amount — but not before.
• CIT v Eli Lilly & Co (India) P Ltd Supreme CourtCuts both waysSuperseded by amendment
  The TDS officer says I under-deducted under s.192. If my estimate was made honestly, does that answer the demand, the interest and the penalty?
  It answers the penalty, not the tax and not the interest. The Supreme Court treated s.192(1) as requiring the employer to estimate the salary — an exercise akin to computation — and held that where there was a shortfall the officer proceeds under s.201(1) to recover it and interest under s.201(1A) runs from the date the tax was deductible to the date the tax was actually paid. On penalty it held that s.271C should not be invoked where the issue was a nascent one and the employers had acted bona fide.
• Union of India v Dharmendra Textile Processors Supreme CourtHelps department
  Does the department have to prove you meant to conceal?
  No. Penalty under s.271(1)(c) is a civil liability enacted to remedy loss of revenue, and wilful concealment is not an essential ingredient. Prosecution under s.276C, which does need a mental element, stands on a different footing.
• CIT v Gold Coin Health Food Pvt Ltd Supreme CourtHelps department
  The addition only reduced my returned loss and I still have no tax to pay for the year. Can the Assessing Officer levy concealment penalty for a year before 2003-04?
  Yes. A three-judge Bench of the Supreme Court held that Explanation 4 to section 271(1)(c) as amended by the Finance Act 2002 is clarificatory, not substantive, so penalty was leviable even between 1 April 1976 and 1 April 2003 where the addition of concealed income merely reduced a returned loss and the assessed figure remained a loss. The contrary view in Virtual Soft Systems Ltd v CIT was held to be not correct. Income in section 2(24) includes losses, which are negative profit, so there is nothing in a loss year that puts the assessee outside the penalty.
• CIT v Gold Coin Health Food P Ltd Supreme CourtHelps department
  My return declared a loss and even after the addition the assessed figure is still a loss. Can concealment penalty under section 271(1)(c) be levied when no tax is payable?
  Yes. A three-judge bench of the Supreme Court held that Explanation 4 to section 271(1)(c) is clarificatory and not substantive, so penalty was leviable even between 1 April 1976 and 1 April 2003 where the addition of concealed income merely reduced a returned loss and the assessed figure remained negative. Income in section 2(24) includes losses, as Harprasad had held, so the returned loss is no answer. The contrary view of a two-judge bench in Virtual Soft Systems Ltd v CIT was held not to be correct. The two assessees before the Court were spared, the Solicitor General having said the Department would not demand penalty from them.
• Sudarshan Silks & Sarees v CIT Supreme CourtHelps taxpayerValidity unconfirmed
  The Tribunal cancelled my penalty on the facts. Can the High Court set that aside as perverse when no such question was ever referred to it?
  No. The Supreme Court set aside the Karnataka High Court's order and restored the orders of the Commissioner (Appeals) and the Tribunal cancelling penalty under section 271(1)(c). The Tribunal is the final court of fact. Its finding on facts can be examined by the High Court in reference jurisdiction only if a question is referred saying that the finding is perverse, in the sense that no reasonable person could have reached it. The question actually referred was only whether the Tribunal was right in upholding the cancellation of penalty. Perversity having been neither raised nor referred, the High Court was precluded from discussing it.
• Dilip N. Shroff v JCIT Supreme CourtHelps taxpayerPartly overruled — read this first
  Is a valuation you put on an asset 'inaccurate particulars' if the officer disagrees with it?
  No. 'Inaccurate' connotes a deliberate act or omission and 'particulars' means the details disclosed in the return. Furnishing an assessment or valuation is not by itself inaccurate particulars. But read the editor's note — this case was later overruled in part.
• T. Ashok Pai v CIT Supreme CourtHelps taxpayerPartly overruled — read this first
  My bank's tax department prepared my return and got it wrong. I corrected it by revised returns which were accepted. Can concealment penalty still be levied on me?
  Not on these facts. The Supreme Court set aside the Karnataka High Court's judgment and allowed the assessee's appeal. The Tribunal had found the assessee bona fide, the fault lying with the professional group at his bank that handled his tax affairs, and had held that penalty could not be sustained where the revised return was accepted and no penalty was levied by reference to the original return. The reference to the High Court was general and raised no question of perversity, and the existence of mens rea is essentially a question of fact for the Tribunal. The Court also held that concealment of income and furnishing inaccurate particulars carry different connotations.
• Virtual Soft Systems Ltd v CIT Supreme CourtHelps taxpayerValidity unconfirmed
  My assessment ended in a loss, only a smaller loss than I returned. Can concealment penalty under section 271(1)(c) still be levied for a year before April 2003?
  No, for years before the Finance Act 2002 amendment took effect. The Supreme Court allowed the assessees' appeals and set aside the Delhi High Court. It held that as Explanation 4 to section 271(1)(c) stood before that amendment, both clause (a) and clause (c) presupposed a positive assessed income on which tax was payable; the only difference was whether the return itself showed a loss or a profit. The existence of a liability to pay tax was a condition precedent to penalty, and it was the Finance Act 2002, with effect from 1 April 2003, that first removed it. That amendment is substantive and prospective, so penalty could not be levied where the assessment ended in a loss.
• K.C. Builders v ACIT Supreme CourtHelps taxpayer
  The Tribunal cancelled my concealment penalty. Can the 276C prosecution still continue?
  No. Penalty under s.271(1)(c) and prosecution under s.276C rest on the same fact — concealment. Once the Tribunal, as the final fact-finding authority, holds there was no concealment and cancels the penalty, the substratum of the complaint disappears and quashing follows automatically.
• ADIT (Investigation) v Kum. A.B. Shanthi Supreme CourtHelps department
  You took a cash loan and now face penalty equal to the whole amount. Is there any relief?
  Yes, through s.273B. The Court upheld s.269SS as valid precisely because s.273B mitigates the hardship: no penalty is imposable if you prove reasonable cause for the failure.
• K.P. Madhusudhanan v CIT Supreme CourtHelps department
  Must the officer say in the notice that he is invoking Explanation 1?
  No. The Explanation is part of s.271 itself, so a notice under the section puts you on notice of the whole of it. No separate intimation that the Explanation is being applied is required.
• Prem Dass v ITO Supreme CourtHelps taxpayer
  The Tribunal cancelled my concealment penalty, but the prosecution under section 276C is still running. Does the penalty finding help me in the criminal court?
  Yes. The Supreme Court set aside the conviction and acquitted the appellant. Section 276C needs a wilful attempt to evade, which is a positive act that must be proved, and section 277 needs mens rea - that the person knew or believed the verification to be false, or did not believe it true. Neither can be made out from the presumption in section 132(4A) about seized books. The Court also held that the Tribunal's finding that this was a difference of opinion on estimates, not concealment, and the reduction of the penalty, could not be lost sight of, given the legislative intent in section 279(1A).
• CIT v Onkar Saran and Sons Supreme CourtHelps taxpayerValidity unconfirmed
  I concealed income in my original return, and repeated the same figures in the return I filed after a section 148 notice. Which year's penalty law applies - the old one or the one in force when the later return went in?
  The law in force when the original return was filed. The Supreme Court dismissed the Revenue's appeals and held that where multiple returns are filed for a year, the law applicable to penalty proceedings is that in force on the date of the original return, if any. It is settled since Brij Mohan that penalty is governed by the law on the date of the offending return; the question was which return is the offending one. Since a penalty on reassessment can be quantified by reference to the income originally returned, the same return must also fix the date of the concealment.
• CIT v Mussadilal Ram Bharose Supreme CourtHelps taxpayerSuperseded by amendment
  My income was estimated at a higher profit rate after my books were rejected, so my return fell well short of the assessment. Does that by itself mean penalty for concealment?
  No. The Supreme Court held that the Explanation to section 271(1) raises a presumption, not a conclusion. Once the returned income falls below the stipulated proportion of the assessed income, the onus shifts to the assessee to show that the failure did not arise from fraud or gross or wilful neglect - but that onus is rebuttable. Where the fact-finding body, on relevant and cogent material, is satisfied that the assessee was not guilty and the Revenue leads no further evidence, no penalty follows. Whether the onus is discharged is a question of fact, and its answer raises no question of law.
• Brij Mohan v CIT Supreme CourtHelps department
  The penalty provision was made harsher after my assessment year but before I filed the return. Which version applies to my concealment penalty?
  The one in force when you filed. The Supreme Court held that a penalty is imposed for the commission of a wrongful act, so it is the law operating on the date the wrongful act is committed that determines the penalty. Where the penalty is for concealment of particulars of income, the concealment occurs when the return is filed, and the law ruling on that date applies. It is wholly immaterial that the concealed income falls to be assessed for an earlier year. The substituted clause brought in by the Finance Act, 1968 therefore governed a return filed in April 1968.
• CIT v Khoday Eswarsa & Sons Supreme CourtHelps taxpayer
  Additions were made to my income and confirmed on appeal. The penalty order simply relies on the reasons in the assessment. Is that enough to sustain a concealment penalty?
  No. The Supreme Court held that penalty proceedings are penal in character, so the Department must establish that the disputed receipt is the assessee's income, and must have before it, apart from the falsity of the assessee's explanation, cogent material or evidence from which it can be inferred that he consciously concealed particulars or deliberately furnished inaccurate ones. The original assessment order may be good evidence in the penalty proceedings, but penalty cannot be levied solely on the reasons given in it. Where the Tribunal cancels a penalty on findings of fact, no question of law arises and no reference can be directed.
• CIT v Anwar Ali Supreme CourtHelps taxpayerSuperseded by amendment
  My explanation for a cash deposit was rejected in the assessment and an addition was made — does that by itself mean penalty for concealment follows?
  No. The Supreme Court held that penalty proceedings are penal in character and separate from the assessment, so the department must prove that the disputed amount was in fact the assessee's income and that he consciously concealed it or deliberately furnished inaccurate particulars. A finding in the assessment that the explanation is false is good evidence but not conclusive. Where there was nothing beyond the falsity of the explanation, the penalty of Rs 66,000 on an unexplained deposit of Rs 87,000 could not stand and the Revenue's appeal was dismissed.
• Hindustan Steel Ltd v State of Orissa Supreme CourtCuts both waysPartly overruled — read this first
  Must penalty be imposed just because the law permits it?
  No. Penalty is discretionary and is not to be imposed merely because it is lawful to do so — and not at all for a technical or venial breach, or where the default flowed from a bona fide belief.
• CIT v S.V. Angidi Chettiar Supreme CourtHelps department
  Our firm was dissolved before the penalty order was passed, and as a registered firm it pays no tax of its own. Can a concealment penalty still be levied on it?
  Yes. A Constitution Bench of the Supreme Court held that penalty could be imposed on the firm after its dissolution. The provision continuing assessment proceedings against a discontinued firm applies to registered firms as much as unregistered ones, and assessment there means more than computation - it takes in the procedure for declaring and imposing liability and the machinery for enforcing it. Liability to pay tax is not a condition precedent to penalty, as clause (b) shows, since penalty may be imposed for failing to comply with a notice even where there is no assessable income. Jurisdiction depends on the officer's satisfaction before the assessment proceedings conclude.
• JCIT v Ganesh Agarwal High CourtCuts both ways
  The Assessing Officer sent a proposal to the Joint Commissioner for penalty on my cash receipts. Does the six month limitation run from that proposal or from the notice the Joint Commissioner later issued?
  From the notice. A Division Bench of the Karnataka High Court held that penalty proceedings under section 271DA begin only when the Joint Commissioner issues the notice under section 274, not when the Assessing Officer forwards a proposal, so the six months in section 275(1)(c) run from the end of the month of that notice. But the Court did not leave the Joint Commissioner free to sit on the proposal: it held he must issue the section 274 notice within six months of the end of the month in which he receives it, failing which the proceedings are time-barred. On that footing four of the ten penalty orders fell and six were restored.
• PCIT v Colo Colour Private Limited High CourtHelps taxpayer
  The officer accepted my purchases but estimated a profit element on them because the sales tax department listed my suppliers as hawala dealers. Can he then levy concealment penalty on that estimate?
  No. The Bombay High Court dismissed the Revenue's appeal, holding that no substantial question of law arose. The Assessing Officer had himself recorded that the purchases were not in doubt, because without the material the corresponding sales could not have been made, and had merely estimated 12.5 per cent of the purchase price as the benefit, with one per cent for commission. Penalty under section 271(1)(c) cannot be founded on an addition made on estimate or guesswork. Having accepted the assessee's material for assessment as not amounting to concealment, the Department could not relabel the same material as concealment under the garb of penalty proceedings.
• Sandeep Kaur Gill v Union of India High CourtHelps taxpayerValidity unconfirmed
  The financier insisted on cash. Can they penalise me under 271E for repaying the loan in cash?
  Not where reasonable cause is shown. Section 269T is mandatory, but bona fide belief coupled with the genuineness of the transaction is reasonable cause under s.273B, and once that is shown no penalty under s.271E is attracted.
• Chavakkad Service Co-operative Bank v ITO High CourtHelps taxpayerValidity unconfirmed
  Our audit report was late because the statutory auditor was late. Can the officer still levy the s.271B penalty?
  No, where the delay is genuinely the auditor's and the report reaches the officer before the assessment is completed. The Kerala High Court set aside penalties of Rs 1.5 lakh, holding that s.273B is peremptory: no penalty can be imposed under s.271B if the assessee proves reasonable cause, and a co-operative society has no control over the timetable of the statutory auditor appointed under the State co-operative law.
• CIT (TDS) v Turner General Entertainment Networks India High CourtHelps taxpayerSuperseded by amendment
  The show-cause notice came a year after the AO referred the matter to the JCIT. Which date starts the s.275(1)(c) clock?
  The reference, not the show-cause notice. The expression 'action for the imposition of penalty is initiated' in s.275(1)(c) refers to the date on which the first introductory step for such action is taken. The Assessing Officer's reference to the Joint Commissioner was that step, so the penalty order passed on the footing of the later show-cause notice was out of time.
• GE Capital US Holdings Inc v DCIT High CourtHelps taxpayerValidity unconfirmed
  The officer refused immunity under s.270AA saying the penalty was for misreporting. Must he show which clause of s.270A(9) applies?
  Yes. The Delhi High Court held that once the assessee complies with clauses (a) and (b) of s.270AA(1) - paying the tax and interest and not appealing - the officer must reach a firm conclusion that the case falls in the category of misreporting, because that alone warrants rejection of the immunity application. Here neither the assessment orders nor the show cause notices contained any finding answering any of the six clauses of s.270A(9); the notices alleged 'under-reporting/misreporting' in the alternative and invoked both s.270A(2) and s.270A(9), which made them vague. The Court quashed both the rejection orders and the show cause notices. It also held that a legal position taken on the strength of a binding High Court decision, later vindicated by the Supreme Court, is not misreporting.
• Chambal Fertilizers and Chemicals Ltd v PCIT, Udaipur High CourtHelps taxpayerValidity unconfirmed
  Can the officer reject a s.270AA immunity application without a hearing and without saying which clause of s.270A(9) applies?
  No. The Rajasthan High Court held that the Deputy Commissioner had violated the proviso to s.270AA(4) by giving no opportunity of hearing, that his order was wholly laconic and did not indicate under which part of s.270A(9) the case was said to fall, and that the revisional authority had, without cogent reasons, cursorily placed the case within clauses (a) and (c). On the facts the amount had not been detected by the department at all - it was disclosed voluntarily during scrutiny after ten other issues had been raised without any addition - so clauses (a) and (c) were not attracted. The Court quashed both orders and directed that immunity under s.270AA be granted.
• PCIT v Jai Maa Jagdamba Flour Private Limited High CourtHelps taxpayerValidity unconfirmed
  After a search on or after 1 July 2012, can the officer levy penalty under s.271(1)(c) instead of s.271AAB?
  No, not for the specified previous year. The Jharkhand High Court held that s.271AAB opens with a non obstante clause and excludes s.271(1)(c) where the undisclosed income relates to the specified previous year. Where the search was on 3 September 2014 the penalty, if any, had to be levied under s.271AAB, and because the assessee had admitted nothing in a s.132(4) statement and paid no tax on admitted income, the case fell under clause (c) of s.271AAB(1). The penalty actually levied under s.271(1)(c) could not stand. The Court also held it immaterial that no incriminating document had been found, because the statute keys the choice of section to the date of the search.
• PCIT v Sri Venkatesh Granites Pvt Ltd High CourtHelps taxpayerValidity unconfirmed
  The s.271AAB penalty order never says which limb of the definition of undisclosed income is satisfied. Can the penalty survive?
  No. The Tribunal held that the Assessing Officer's penalty order had nowhere specified whether the alleged undisclosed income satisfied the statutory parameters in the Explanation to s.271AAB, and cancelled the penalty for that reason alone. The Telangana High Court agreed and concurred that the penalty, whether at 30 per cent or at the 10 per cent the CIT (Appeals) had substituted, could not be sustained, and held that no question of law arose.
• Pr. Commissioner of Income Tax v Shree Madhi Surali Vibhag Nagarik Sahakari Dhiran Mandli Ltd High CourtHelps taxpayer
  Our credit society takes and repays members' money in cash across the counter like a bank. The officer has levied penalty under sections 271D and 271E on the whole turnover. Can it stand?
  No, on these facts. The Gujarat High Court upheld the deletion of penalties of Rs 28,66,93,898 under section 271D and Rs 27,12,01,825 under section 271E. Section 273B says no penalty is imposable if the person proves reasonable cause, and that gives the authority a discretion to be exercised justly on the record. The Commissioner (Appeals) and the Tribunal found on the facts that the society, whose members' accounts work like savings accounts repayable on demand, acted on a bona fide belief that sections 269SS and 269T did not apply, that the deposits were accepted as genuine with no addition made, and that its auditor had never reported a contravention. The Court found no legal infirmity and dismissed the Revenue's appeal, holding that no substantial question of law arose.
• Prem Brothers Infrastructure LLP v National Faceless Assessment Centre High CourtHelps taxpayerValidity unconfirmed
  The Assessing Officer raised my own section 14A disallowance and then called it misreporting, so he refused me immunity under section 270AA and levied penalty under section 270A. Can he do that?
  No. The Delhi High Court quashed the penalty order and directed the Assessing Officer to grant immunity under section 270AA. The only addition was a recomputation of a section 14A disallowance the assessee had itself estimated and disclosed. Both sides worked from the same details and reached different figures; the Court said that by no stretch of imagination can that be called misreporting. It also found that the penalty order did not say which limb of section 270A was attracted or how sub-section (9) was satisfied, and that the bare use of the word misreporting made the order manifestly arbitrary.
• Schneider Electric South East Asia (HQ) Pte Ltd v ACIT High CourtHelps taxpayerValidity unconfirmed
  Immunity under s.270AA was refused because the officer called it 'misreporting'. Can they do that with one word?
  No. Denying immunity on a bare label of misreporting, without identifying which limb of s.270A or which sub-clause of s.270A(9) is attracted, was held manifestly arbitrary. The Court directed that immunity be granted.
• Mohd. Farhan A. Shaikh v ACIT (Full Bench) High CourtHelps taxpayer
  Bombay had two conflicting lines on defective penalty notices. Which one won?
  The assessee's. A Full Bench held that the grounds must be conveyed through the statutory notice, that an omnibus notice suffers from the vice of vagueness, and that non-striking of the irrelevant portion renders the penalty order bad in law.
• Sundaram Finance Ltd v ACIT High CourtHelps departmentValidity unconfirmed
  The notice did not specify the default, but you clearly understood it. Does the defect still help you?
  In Madras, no. The assessee had understood the purport and import of the notice, and claiming depreciation on machinery that did not exist was inaccurate particulars. The penalty was upheld.
• PCIT v Ritu Singal High CourtHelps departmentValidity unconfirmed
  I told the search party the money was my unaccounted income. Is that enough to escape s.271AAA penalty?
  No, not by itself. The Delhi High Court held that all three conditions in s.271AAA(2) must be fulfilled before the escape route opens. The assessee had said the amounts advanced were her unaccounted income for the year, but did not specify how she had derived that income or what head it fell under - rent, capital gain, professional income, business income out of money lending, or the source of the money. Unless such facts are given with some specificity the requirement of substantiating the manner is not met. The appellate authorities had misdirected themselves and the penalty was restored.
• PCIT v Sandeep Chandak High CourtHelps departmentValidity unconfirmed
  The s.271AAB penalty notice came on the printed s.274 read with s.271 form. Does that by itself kill the penalty?
  Not on these facts. The Allahabad High Court looked past the caption to the body of the notice, which told the assessee that proceedings under s.271AAB were being taken and that his reply would be considered before any order was made under s.271AAB. Because the officer had never initiated any s.271(1)(c) proceeding in the s.143(3) assessment, and because the assessee's own reply showed he had understood the notice as a s.271AAB notice, the Court held the initiation was in accordance with law and restored the penalties the Tribunal had cancelled.
• PCIT v Mukeshbhai Ramanlal Prajapati High CourtHelps taxpayerValidity unconfirmed
  The officer never asked me how I earned the surrendered income. Can he still levy s.271AAA penalty because I did not substantiate the manner?
  No. The Gujarat High Court held that the requirement in s.271AAA(2)(ii) to substantiate the manner in which the undisclosed income was derived is consequential to, or a corollary of, the base requirement in clause (i) to specify that manner in the s.132(4) statement. The duty to substantiate begins only when the officer recording the statement elicits a response on the point. Where the Revenue failed to question the assessee at all about how the income was derived, it cannot jump to the later requirement, and when the base requirement itself fails the question of denying the immunity does not arise. The Tax Appeal was dismissed and the deletion of the penalty stood.
• PCIT v Neeraj Jindal High CourtHelps taxpayer
  After a search I filed higher income in my section 153A return and the officer accepted it. Can he levy concealment penalty just because the figure went up?
  No, not by itself. The Delhi High Court held that once the assessing officer accepts a return filed under section 153A, that return takes the place of the original return under section 139 for all purposes, including penalty, and penalty under section 271(1)(c) can only be on income assessed over and above the income returned under section 153A. A mere increase over the original return, without incriminating evidence, does not show concealment. Explanation 5 could not be invoked either, because no assets relating to assessment years 2005-06 and 2006-07 were found; the cash was found in the year of search. The Revenue's four appeals were dismissed.
• PCIT v JKD Capital & Finlease Ltd High CourtHelps taxpayer
  The assessing officer directed penalty under section 271E in my assessment order, but the Additional Commissioner only issued the show cause notice years later. Is that penalty time barred?
  Yes. The Delhi High Court held that under section 275(1)(c) time runs from when the Assessing Officer initiated the action - here December 2007, in the assessment order - not from the Additional Commissioner's show cause notice issued five years later. The penalty order therefore had to be passed by 30 June 2008, the later of the two limits in the clause. An order of 20 March 2012 was out of time. The Court also held that penalty for breach of section 269T is independent of the quantum proceedings, so an appeal against the assessment does not extend time. Appeal dismissed.
• CIT v Worldwide Township Projects Ltd High CourtHelps taxpayer
  The liability was created by a journal entry and no money moved. Does 269SS still apply?
  No. Passing a journal entry does not involve the acceptance of any loan or deposit of money, so s.269SS is not engaged. The Court also held that limitation for a s.271D penalty runs under s.275(1)(c), not s.275(1)(a)(ii).
• CIT v Manjunatha Cotton and Ginning Factory High CourtHelps taxpayer
  Your penalty notice keeps both limbs and strikes off neither. Does that make it bad?
  Yes. Concealment and inaccurate particulars are different charges. A printed form that retains every ground shows non-application of mind, denies you the chance to answer the actual charge, and makes the proceedings bad in law.
• CIT v Pruthvi Brokers & Shareholders High CourtHelps taxpayer
  Goetze says I cannot make a claim except by revised return. Does that stop me raising it before the CIT(A) or the Tribunal?
  No. An assessee is entitled to raise before the appellate authorities not merely additional legal submissions but additional claims not made in the return. Goetze (India) was confined to the power of the assessing authority and the Supreme Court expressly said it does not touch the power of the Tribunal under s.254. The appellate authorities have jurisdiction to entertain a new ground; whether they exercise the discretion to admit it is a separate question.
• CIT v Triumph International Finance (I) Ltd High CourtCuts both waysValidity unconfirmed
  We settled a loan against an amount the same party owed us, by journal entry, and paid only the small balance by cheque — can penalty under section 271E be levied?
  It depends, and on this record no. The Bombay High Court held on 12 June 2012 that repaying a loan or deposit by journal entry does contravene section 269T: the section draws no line between bona fide and other transactions, and does not speak of an outflow of funds, it simply bars every mode except an account payee cheque or draft. But section 273B saves the assessee where reasonable cause is shown, and that expression is wider than sufficient cause and is construed liberally. Here the same party owed the assessee almost the identical sum for shares, the genuineness of both legs was never doubted, and the penalty of Rs.4,28,99,325 was rightly deleted.
• CIT v Mohair Investment & Trading Co High CourtHelps departmentSuperseded by amendment
  The CIT(A) order came two years ago but the appeal is still in the Tribunal. Is the penalty already time-barred?
  No. The proviso to s.275(1)(a) does not take away the six months the officer gets from the end of the month in which the Tribunal's order is received. Where successive appeals are filed, the clock in the main limb runs from the final appellate order; the proviso's one-year period from the end of the financial year of receipt of the CIT(A)'s order is an exception for cases that stop at the CIT(A).
• CIT v Nalwa Sons Investments Ltd High CourtHelps taxpayerValidity unconfirmed
  My company was finally assessed on book profit under section 115JB. Can the officer still levy concealment penalty on a disallowance he made in the normal computation?
  No. The Delhi High Court held that where the assessment is finally made on book profit under section 115JB because that figure is higher, a disallowance in the normal computation produces no additional tax and so there is no amount of tax sought to be evaded within Explanation 4 to section 271(1)(c). The Court accepted that the assessee had made a false claim of depreciation on machinery it could not show it had used, and it disagreed with the reasons the Commissioner (Appeals) and the Tribunal had given. It still upheld the deletion of penalty, because the concealment had no role to play once tax was charged on book profit.
• CIT v Zoom Communication Pvt Ltd High CourtHelps departmentValidity unconfirmed
  I forgot to add back income tax and a written-off asset in my computation, but everything was there in the accounts. Reliance Petroproducts protects me from penalty, doesn't it?
  No, not on these facts. The Delhi High Court restored penalty under section 271(1)(c) on a company that had debited income tax paid and equipment written off to its profit and loss account and failed to add them back. Reliance Petroproducts protects a claim that is merely unsustainable in law where the facts are disclosed and the explanation is bona fide. Here the claims had no legal basis at all - section 40(a)(ii) barred one outright and section 32(1)(iii) had no application to the other - and the only explanation offered was oversight, with nothing said about whose oversight or how it survived audit.
• CIT v Aero Traders (P) Ltd High CourtHelps taxpayer
  My books were rejected and the Assessing Officer estimated my profit. Can he then levy concealment penalty under section 271(1)(c) on that estimated addition?
  No, on these facts. The Delhi High Court dismissed the Revenue's appeal against deletion of a Rs.36.41 lakh penalty. The Commissioner (Appeals) and the Tribunal had held that where the addition rests on an estimated rate of profit applied to turnover, and the Assessing Officer could point to no specific item of addition supported by conclusive evidence, there is no concealment or furnishing of inaccurate particulars. The High Court held that was purely a finding of fact, no perversity had been shown, and no substantial question of law arose. It was also relevant that the assessee's books were with the police, not withheld by it.
• Madhushree Gupta v Union of India High CourtCuts both waysValidity unconfirmed
  The Assessing Officer just wrote "initiate penalty proceedings under section 271(1)(c)" at the foot of the assessment order. Section 271(1B) now says that is enough. Can I still challenge it?
  The provision survives, but the Delhi High Court read it consistently with Article 14 rather than at face value. Section 271(1B), inserted by the Finance Act 2008 with retrospective effect from 1 April 1989, deems a direction to initiate penalty proceedings in an assessment order to be satisfaction for section 271(1)(c). The petitioners said this legislatively presumes away a jurisdictional fact the Assessing Officer must find for himself. The Court did not strike the provision down; it said it had applied the settled principles by reading the amended provision so as to be in consonance with the safeguards contained in Article 14. The Revenue accepted that it does not reopen assessments that have already become final.
• CIT v Sunil Kumar Goel High CourtHelps taxpayerValidity unconfirmed
  I took and repaid small cash loans from my family's sister concern, all recorded in the books. Must penalty follow automatically under sections 271D and 271E?
  No. The Punjab and Haryana High Court held that section 273B opens with a non obstante clause and overrides sections 271D and 271E, so an assessee who proves reasonable cause escapes penalty even though section 269SS or 269T has been contravened. On these facts the Tribunal had found the cash loans were between family members and a sister concern, taken for business exigency, entered in cash books produced to the Revenue, with no tax avoidance or evasion and no prejudice to the Revenue. That is reasonable cause, and whether it exists is a finding of fact giving rise to no substantial question of law.
• CIT v Mahendra C. Shah High CourtHelps taxpayerValidity unconfirmed
  I declared the seized assets in my section 132(4) statement but nobody asked me how I earned the money, and I paid the tax only with a revised return. Do I lose the Explanation 5 immunity?
  No. The Gujarat High Court held that the assessee had complied with the second exception to Explanation 5 and cancelled the penalty. Where the authorised officer does not ask how the undisclosed income was derived, the assessee cannot be denied immunity because the statement does not say so; the officer is bound to explain Explanation 5 in full and cannot stop short so that the Revenue may take advantage of the lapse. As for payment, the provision fixes no time for paying the tax and interest, and it is enough that payment is shown before the assessment is completed. Disclosure in the return itself is not what the exception turns on.
• CIT v Idhayam Publications Ltd High CourtHelps taxpayer
  Money moves both ways between me and my company on a current account. Is that a loan under 269SS?
  No. Deposits into and withdrawals from a running current account between a director and the company are not a loan or advance, so ss.269SS and 269T do not reach them and penalty on that footing cannot stand.
• CIT v Noida Toll Bridge Co Ltd High CourtHelps taxpayerValidity unconfirmed
  My promoter paid a third party for me by account payee cheque and the amount was put through my books by journal entry. Is that a loan taken in cash?
  No. The Delhi High Court declined to entertain the Revenue's appeal and upheld the deletion of penalty of Rs 4.85 crore under section 271D. The Tribunal had found that the transaction was by account payee cheque, that no payment was made in cash by the assessee or on its behalf, that no loan was accepted in cash, and that the amount paid on the assessee's behalf by its promoter was passed through the books by a journal entry crediting the promoter's account. Those are findings of fact, and on them section 269SS was not attracted. The order gave rise to no question of law, much less a substantial question of law.
• Surajmal Parsuram Todi v CIT High CourtHelps taxpayer
  I never maintained books of account at all. Can the department penalise me under section 271B for not getting them audited?
  No. The Gauhati High Court held that where an assessee has not maintained books of account at all, penalty under section 271B for failure to get them audited cannot be imposed. Maintenance of accounts is required by section 44AA, and failure there is punished by section 271A. Once that default is complete there is nothing to audit, so no failure under section 44AB can arise and section 271B has nothing to bite on. The Tribunal had overlooked this. The question was answered in the negative and in favour of the assessee, leaving the department to act under section 271A.
• CIT v Kaushalya High CourtCuts both waysPartly overruled — read this first
  Is a defective s.274 notice always fatal?
  On this view, no. Section 274 prescribes no particular form, and a mistake in language or a failure to strike out the inapplicable limb does not by itself invalidate the notice — you must show you were actually prejudiced.
• Dahod Sahakari Kharid Vechan Sangh v CIT High CourtCuts both ways
  Does failing to file a cross-objection make the findings decided against you final?
  The Tribunal had treated findings against the assessee as final because no cross-objection had been filed, even though the assessee had succeeded before the Commissioner (Appeals). The Gujarat High Court held that this reasoning would render Rule 27 redundant and nugatory, and set it aside.
• Mayur Bhararbhai Popat v ITO ITATHelps departmentValidity unconfirmed
  I applied for immunity under s.270AA after paying the tax on the s.80GGC disallowance. The Assessing Officer refused it because he had charged misreporting. Was he entitled to?
  Yes, on this decision. Section 270AA(3) grants immunity only where penalty proceedings under s.270A have NOT been initiated in the circumstances in s.270A(9). Once the Assessing Officer invokes s.270A(9), the statute itself excludes immunity, and the 200 per cent penalty under s.270A(8) follows. The qualification is important: where the invocation of s.270A(9) is a bare label with no clause identified and no reasoning on its ingredients, the Delhi High Court in Prem Brothers Infrastructure LLP v NFAC (W.P.(C) 7092/2022, 31 May 2022) quashed the penalty and directed immunity to be granted — so the battleground is the quality of the initiation, not the availability of s.270AA in the abstract.
• TSC Fashions Pvt Ltd v ITO ITATHelps departmentValidity unconfirmed
  My client missed the tax audit because the old auditor stopped cooperating. Is that a reasonable cause that kills the s.271B penalty?
  Not on assertion alone. The Tribunal confirmed the penalty because the assessee produced no correspondence, email, letter, complaint or affidavit against the earlier auditor, and showed no proactive steps of its own; a bald plea of auditor non-cooperation is a mere allegation and does not discharge the burden under s.273B.
• Mithibai College Employees Co-operative Credit Society Ltd v ITO ITATHelps taxpayerValidity unconfirmed
  The notice said under-reporting; the order said misreporting. Can the charge change between them?
  No. The enhanced penalty for misreporting is available only if the case falls within a named sub-clause of s.270A(9), and the officer must say which. Shifting to a heavier charge in the order, having alleged only under-reporting in the notice, sank the penalty.
• Uday Garudachar v ITO ITATHelps taxpayerValidity unconfirmed
  My client set off the whole house property loss against salary for AY 2018-19, not knowing about the new Rs 2,00,000 cap. The officer restricted it and has levied a s.270A penalty for under-reporting. Can the penalty be resisted?
  Yes, on this authority. The Bangalore Tribunal deleted a s.270A penalty where the assessee had disclosed the whole computation of house property income but had set off the loss in full because he was unaware of s.71(3A), which had been inserted with effect from assessment year 2018-19 — the very year in issue. The explanation was held bona fide within s.270A(6), so the addition did not amount to under-reported income.
• Niket Maheshbhai Shah v ITO ITATHelps taxpayerValidity unconfirmed
  I gave up the fight on the s.80GGC disallowance and paid the tax. Now there is a 200 per cent penalty under s.270A for misreporting. Can I still resist the penalty?
  Yes. The Tribunal quashed the penalty outright. Claiming a deduction the assessee genuinely believed was available is not under-reporting or misreporting, and where the penalty order does not say which limb of s.270A(9) is attracted or how its ingredients are satisfied, the order is arbitrary and cannot stand.
• Krishore Kumar Rajagopal v DDIT ITATHelps taxpayer
  I left my foreign ESOPs out of Schedule FA. Is the Rs 10 lakh penalty automatic?
  No. Section 43 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015 says the officer 'may direct' a penalty, so the levy is discretionary. Where the ESOP perquisite had already suffered TDS and the capital gain on sale was offered to tax, the Tribunal treated the omission from Schedule FA as a technical breach and deleted the Rs 10 lakh penalty for each year.
• DCIT v Umiya Co-operative Credit Society Ltd ITATHelps taxpayerValidity unconfirmed
  Our credit society takes deposits and repays loans in cash to members. Can the department levy 271D and 271E on the whole amount?
  Not where the transactions are genuine dealings with members in the ordinary course. The Tribunal upheld the deletion of penalties under s.271D and s.271E on cash deposits and repayments of roughly Rs 28 crore and Rs 27 crore, treating a co-operative credit society's dealings with its own limited membership as attracting the reasonable cause protection in s.273B, particularly where no addition was made in the assessment and the genuineness of the transactions was not in dispute.
• Capgemini Technology Services India Ltd v ACIT ITATHelps taxpayerValidity unconfirmed
  I claimed cess before the 2022 amendment and filed Form 69. Can they still levy s.270A penalty?
  No. A cess claim made in good faith on High Court authority that was binding when the return was filed is not under-reported income, and the proviso to s.155(18) gives statutory immunity where Form 69 was filed and the recomputed tax paid.
• Vinil Venugopal v DDIT (Special Bench) ITATHelps taxpayer
  Is the Rs 10 lakh penalty under s.43 of the Black Money Act automatic once the officer finds a foreign asset missing from Schedule FA?
  No. A Special Bench of the Tribunal, answering a reference on the point, held that the word 'may' in s.43 carries its plain meaning, is directory, and cannot be read as 'shall'. The imposition of the penalty is therefore not mandatory and not automatic: the Assessing Officer has a discretion to impose it or not, depending on the facts and circumstances of each case. The Special Bench answered the reference only; it did not examine the merits of the penalty orders before it, and directed the appeals to be placed before the Division Bench for disposal.
• Delta Farm Services v ITO ITATHelps taxpayer
  I sell tractors to farmers who pay in cash instalments, and the officer has levied penalty equal to the whole of the cash received for breaching the two lakh limit. Is there any defence?
  Yes, reasonable cause. The Delhi Tribunal deleted the penalty of Rs 4,69,52,797 under section 271DA. The officer never doubted the genuineness of the cash sales and never alleged that unaccounted money was being routed back. The firm had identified every buyer with Aadhaar, land records and Form 60, accounted for every receipt and filed its statements of specified financial transactions. Section 269ST had come in from 1 April 2017 and this was the first year, and the firm's belief that cash below Rs 2 lakh could be taken at any one time was plausible on the language of the section. Penalty is quasi-criminal and is not for a technical or venial breach.
• Sanjay Bhupatrai Shah v DDIT ITATHelps taxpayerValidity unconfirmed
  My name is on a foreign account only as a second holder and my son owns it. Is the Rs 10 lakh penalty still mine?
  No, on these facts. The Mumbai Tribunal deleted s.43 penalties on a father who had been named as a joint holder of a foreign investment for administrative convenience where the son had declared full ownership of it. The omission from Schedule FA rested on a bona fide belief that he was not the owner, and financing an asset does not make the financier its owner.
• DCIT v Priya Blue Industries P Ltd ITATHelps taxpayerValidity unconfirmed
  The AO has levied a s.271AA penalty saying I did not maintain transfer pricing documentation, without saying which documents. Does that penalty stand?
  No, on this decision. A penalty under s.271AA has to identify the information or document prescribed by s.92D read with rule 10D that was not maintained or furnished; a general assertion will not do, and here neither the assessment order nor the penalty order said which document was missing. The Tribunal gave a second and independent ground: the penalty was passed in a perfunctory manner without the requisite show-cause notice and without proper opportunity, the officer having called for rule 10D documents without naming any clause of the rule. That the transactions the penalty was levied on had not been adjusted by the Transfer Pricing Officer at all was added as a further point, not as the basis of the decision.
• N C Shaw and Co Beverages P Ltd v ITO (TDS) ITATHelps taxpayer
  I manufacture liquor and settle volume-linked scheme discounts with my distributors by credit note. The TDS officer says those credit notes are commission under s.194H and has made me an assessee in default. Is he right?
  No, on these facts. The Kolkata Bench held that a post-sale discount in cash or in kind, given to a buyer with whom the seller deals on a principal-to-principal basis, is a normal sales discount that reduces the sale price and is not commission or brokerage within Explanation (i) to s.194H, so there was no obligation to deduct and no default under s.201(1) or interest under s.201(1A); the consequential s.271C penalty went with it. Note what this order is not: although the assessee argued s.194R and s.194Q at length, the Tribunal decided the case entirely on s.194H and its operative paragraphs say nothing about either provision.
• Bright Singh Chelladurai v ITO ITATHelps taxpayerHigh Courts differ
  The officer penalised my client Rs 25,000 under s.271A for not keeping books and then another Rs 1,50,000 under s.271B for not getting them audited. Can he do both for the same year?
  No. Having levied the s.271A penalty for not maintaining books under s.44AA, the officer ought not to have levied a s.271B penalty as well — if no books were kept there was nothing to audit, so s.44AB was not violated. The Tribunal deleted the s.271B penalty and left the s.271A penalty standing.
• Wahid Ali v JCIT ITATHelps taxpayerValidity unconfirmed
  I received sale consideration for my property in cash. Is that a 269SS breach attracting 271D?
  On this decision, no. Section 269SS prohibits receipt of a sum by way of loan or deposit; sale consideration on a completed transfer of immovable property is neither, and since s.271D is entirely derivative of a s.269SS contravention, the penalty had no statutory foundation.
• Ocean Diving Centre Ltd v CIT(A) ITATHelps taxpayer
  The foreign investment was in my balance sheet and elsewhere in the return, just not in Schedule FA. Does that still cost Rs 10 lakh?
  No, on these facts. The Mumbai Tribunal cancelled a s.43 penalty where a resident company's investment in Panamanian entities was shown in its balance sheet and in another schedule of the return but not in Schedule FA. The officer has a discretion under s.43 and it has to be exercised judicially; where there is no defiance of law and no mala fide or dishonest breach, the section is not attracted.
• Alrameez Construction P Ltd v CIT/NFAC ITATHelps taxpayer
  The only addition is the gap between the stamp duty value and my price. Can that carry a s.270A penalty?
  No, on this Tribunal's reasoning, and note the facts it rests on. The Tribunal read s.270A as dealing with deemed income only where the addition is made under s.115JB or s.115JC, so an addition under s.43CA read with s.56(2)(x) falls outside the under-reporting scheme; where a deeming provision applies the assessee has no option but to accept the difference, so neither concealment nor under-reporting can be established. Two further grounds carried the result: the notice never said which limb of s.270A was charged, and the assessment order itself recorded that the assessee had accepted the addition to buy peace. The penalty of Rs. 20,843 was deleted; the addition of Rs. 1,34,100 stands.
• Lokesh Kumar Sharma v ITO ITATHelps taxpayerValidity unconfirmed
  I never maintained books at all. Can they penalise me under 271B for not getting them audited?
  No. Section 44AB requires a person to get 'his accounts' audited, which presupposes that accounts exist. Where the default is at the earlier stage of not maintaining books under s.44AA, the audit obligation never arises, and the penalty for that default is s.271A — not s.271B.
• Sushil Kumar Paul v ACIT ITATHelps taxpayerSuperseded by amendment
  Search penalty under s.271AAB, but the notice used the ordinary s.271(1)(c) printed form. Is that valid?
  No. Section 271AAB has different rates under different clauses, so the notice must tell you which clause and which rate is proposed. A mechanical s.271(1)(c) form bears no relation to the ingredients of s.271AAB and cannot support the penalty.
• Yuvraj Singh v ITO ITATHelps taxpayerValidity unconfirmed
  The officer treated my cash deposits as turnover, said I crossed the s.44AB limit and levied s.271B. The quantum was settled under Vivad se Vishwas. Does the penalty still stand?
  No. Where the assessee's declared turnover was below the s.44AB threshold and the officer crossed the threshold only by adding cash deposits to it, and the quantum dispute ended under the Vivad se Vishwas Scheme 2020 without any final judicial finding on the correctness of the turnover, the benefit of the doubt goes to the assessee and the s.271B penalty is reversed.
• Thane Zilla Madhyamik Shikshak Sangh Sahakari Parpedhi Maryadit v ACIT ITATHelps taxpayerValidity unconfirmed
  My society's chartered accountant told the penalty officer it was a co-operative bank. Can the department use that admission to deny section 80P?
  No. The Mumbai Bench held that no addition and no denial of a deduction can be made merely on the admission of a person, still less the assessee's authorised representative, without going into the actual charter documents, and that there is no estoppel against the statute. The society's chartered accountant had argued before the Commissioner (Appeals) in a section 271D penalty matter that it was a co-operative bank, and the penalty was deleted on that basis; he later filed an affidavit saying it had been a genuine misinterpretation. On the bye-laws and objects the society took deposits only from members and lent only to members, and it held no licence from the Reserve Bank of India, so it was a co-operative credit society and not a co-operative bank. Section 80P(4) did not shut it out and the deduction under section 80P(2)(a)(i) was allowed for each of the years in appeal.
• Rashmi Jalan v ACIT ITATHelps taxpayer
  The 271AAB notice does not say which clause or what rate. Can the penalty survive?
  No. Section 271AAB contains clauses (a), (b) and (c) with different conditions and different rates, so an omnibus show-cause notice that names neither the clause nor the rate leaves the assessee unable to know the case to be met and denies a real opportunity under s.274. The Tribunal also held, independently, that the levy had no foundation where no statement was recorded under s.132(4) and the returned income was accepted under s.143(3) without any addition.
• Guntur District Co-operative Central Bank Ltd v DIT ITATCuts both ways
  We had no reportable transactions and filed no SFT. Can they still levy penalty under 271FA?
  No, not for a year in which there was nothing to report. Section 285BA casts the filing obligation on a person who has registered or recorded a specified financial transaction during the financial year, so where no such transaction exists the duty to furnish the statement never arises and s.271FA has nothing to bite on. The burden is on the department to show that reportable transactions were in fact recorded before it can allege a failure.
• Sanmathi Ambanna v Jt CIT ITATHelps taxpayerValidity unconfirmed
  I took a cash loan from my father-in-law. Can they levy 271D on a genuine family transaction?
  No, on these facts. The Tribunal deleted the penalty, holding that near relatives are not 'other persons' within the mischief of s.269SS in a genuine family transaction, and that in any event unforeseen business circumstances requiring cash from a relative amounted to reasonable cause under s.273B.
• Banwari Sitaram Pasari HUF v ACIT ITATHelps taxpayerSuperseded by amendment
  The officer has added up my whole commodity contract value as turnover and penalised me under s.271B. Is contract value turnover?
  No. Where the assessee buys and sells commodities on a commodity exchange without delivery being taken or given, the total value of the transactions booked with the exchange cannot be treated as turnover for deciding whether accounts had to be audited under s.44AB. The transactions were speculative, no delivery took place, and the s.271B penalty was deleted.
• CBDT instruction of 18 August 2025 on Black Money Act prosecutions CBDT Circulars & InstructionsHelps taxpayer
  The foreign asset is small and no penalty is proposed. Can they still prosecute me for leaving it out of Schedule FA?
  Not on the Board's own instruction. It directs that prosecution under s.49 or s.50 of the Black Money Act is not to be initiated in cases where penalty under s.42 or s.43 is not imposed or not imposable because the asset falls within the proviso to those sections - assets other than immovable property whose aggregate value does not exceed Rs 20 lakh. It amends an earlier instruction of 15 March 2022.
• CBDT Circular 32/2019 CBDT Circulars & InstructionsHelps departmentSuperseded by amendment
  My turnover crossed Rs. 50 crore. Must I offer UPI and RuPay, and what does it cost me if I don't?
  Yes, from 1 January 2020. A business whose turnover, sales or gross receipts exceeded Rs. 50 crore in the preceding previous year must provide three facilities under s.269SU: RuPay debit card, BHIM-UPI and UPI QR code. Section 271DB charges Rs. 5,000 for each day of default, and after the grace period the count runs from 1 February 2020.
• CBDT Circular 22/2017 CBDT Circulars & InstructionsHelps taxpayerValidity unconfirmed
  We take loan repayments in cash instalments. Do the instalments add up against the two lakh limit?
  Not for NBFCs and HFCs. The Board has clarified that each instalment of loan repayment is a single transaction, so instalments received against one loan are not aggregated when testing the two lakh rupee ceiling in s.269ST.

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.