Penalty and Compliance FAQs for Professionals
Quick Reference Box
| Default | Penalty / Consequence | Section |
|---|---|---|
| Under-reporting of income | 50% of tax on under-reported income | 270A |
| Misreporting of income | 200% of tax on under-reported income | 270A(9) |
| Cash loan above ₹20,000 received | 100% of amount received | 271D |
| Cash loan above ₹20,000 repaid | 100% of amount repaid | 271E |
| Cash receipt above ₹2 lakh | 100% of amount received | 271DA |
| Wilful tax evasion | Imprisonment 6 months to 7 years + fine | 276C(1) |
| Non-filing of return | Imprisonment 3 months to 2 years | 276CC |
| Late TDS return | ₹200 per day (capped at TDS amount) | 234E |
| Immunity from 270A penalty | File Form 68 within 1 month | 270AA |
| All offences compoundable | No time limit | CBDT Oct 2024 |
Q1. The AO levied penalty under Section 270A for misreporting but did not specify which of the 8 limbs of Section 270A(9) applies. Is the penalty sustainable?
No — courts have consistently held this penalty unsustainable. The AO must specify the exact limb of Section 270A(9) being invoked. A general assertion of “misreporting” without identifying which specific category — misrepresentation of facts, false entry, suppression of receipts, etc. — is procedurally defective.
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