TP Penalty for Underreporting and Misreporting of Income By CA Nisha Bhandari 1st Edition Dec 2025

TP Penalty for Underreporting and Misreporting of Income By CA Nisha Bhandari 1st Edition Dec 2025

TP Penalty for Underreporting and Misreporting of Income By CA Nisha Bhandari 1st Edition Dec 2025

The Finance Act, 2016 had, made significant changes in penalty related provisions as penalty under section 271(1)(c) for concealment and furnishing of inaccurate particulars of income was replaced by penalty for underreporting and mis-reporting of income. For this purpose two new sections 270A and 270AA were inserted in the Income Tax Act with effect from the assessment year 2017-18. The basic objective of such a radical change was to rationalise and bring objectivity, certainty and clarity in the penalty provision and thereby reduce litigation. Under the currently applicable law, the main ingredients for imposing penalty are underreporting and misreporting of income.

As we know presently, the Government is on move to eliminating corruption and favouritism under proceedings before the Income Tax Department and for this purpose, the CBDT has notified the Faceless Penalty Scheme vide Notification No. 3/2021, dt. 12-1-2021. This scheme is made effective from 12-1-2021 and is on same lines as Faceless Assessment Scheme, 2020 and Faceless Appeal Scheme, 2020. Under the Faceless Penalty Scheme all penalty proceedings will be carried out without any human interface. All notices and replies shall be issued and submitted digitally. A separate part dealing with proceedings under Faceless Penalty Scheme is incorporated in the book to facilitate the assessees to represent their case in the new faceless era.

The subject matter of the book is divided in eleven parts, as under –

• Basic Issues as to Penalty Proceedings
• Penalty for Underreporting and Misreporting of Income [Sections 270A and 270AA]
• Penalties Other than Penalty for Underreporting and Misreporting of Income
• Concealment Penalty Under Section 271(1)(c)
• Levy of Fee Under Sections 234E, 234F, 234G and 234H
• Waiver, Reduction and Non-Imposition of Penalty [Sections 273A, 273AA and 273B
• Procedural Aspects and Limitation vis-a-Vis Levy of Penalty [Sections 274 and 275]
• Proceedings Under Faceless Penalty Scheme [Effective from 12-1-2021]
• Appellate Remedy with Stay Specific Issues
• Handling Penalty Notices in the Present Faceless era with Appropriate Solutions
• Penalty Provisions Vis-a-Vis Income Tax Act, 2025