(i) A.O. in u/s 143(3)/144/147/153A, (ii) CIT(A) in u/s 250, (iii) CIT in u/s 263
3 Penalty proceedings must be initiated before levying any penalty . Penalty proceedings are initiated by issuing a SCN
4 A.O. must be initiated penalty proceedings u/s 271(1)(C) before completion of assessement, and CIT(A) must be initiated penalty proceedings u/s 271(1)(C) before passing order u/s 250, and CIT must be initiated penalty proceedings u/s 271(1)(C) before passing order u/s 263 5 A.O. can levy penalty for concealment on the additions made by him not on the additions made by the CIT(A) . Similarly vice - versa 6 There will be no penalty for concealment of income on additions made on a Question of Law
7 Penalty other than 271(1)(C) can be levied by initiating penalty proceedings(by issuing SCN) and such peoceedings can be initiated at ANY TIME 8imp Penalty Order and Assessement Order are distinct order . Similary, penalty proceedings and assessment proceedings are distinct proceedings 9 Penalty is levied by passing a penalty order
10 Penalty will not levied Addition/Disallowances made by ITAT
11 If A.O. disallows expenditure of u/s 14A(exp. on exempt income), this will not mean that the assessee has concealed income/exp.
12 INTANGIBLE ADDITIONS - Sometimes the A.O. makes additions for purely technical reasons eg. Application of a presumptive rate of G.P . these additions are commonly referred as "INTANGIBLE ADDITIONS". Penalty for concealment of income cannot be levied on intangible additions. Intangible additions represents the real income of assessee and can be used in subsequent assessment years for explaining the unexplained investments, unexplained cash credits and unexplained assets
Intangible additions so used in explaining the unexplained investments etc. shall be deemed as concealed income and penalty u/s 271(1)(C) shall levied and further provides that in such a case penalty proceedings can be initiated even after the completion of assessment. and even after 6 A/Y year because A.O. is not opening case , he is imposing only penalty. Penalty shall be assable as the income of that year in which intangible addition made
- if intangible additions is made then penalty u/s 271(1)© will not imposed but this additions shall not increase capital. Therefore if assessee wants to take this additions in books than penalty u/s 271(1)© shall be charged
14 In case of concealment income these are required- i) tax, ii) interest u/s 234A,B,C, iii) penalty u/s 271(1)©
15 A debatable issue would not amount to concealment of income
16 NEW LAW OF PENALTY FOR CONCEALMENT OF INCOME IN CASE OF SEARCH & SEIZURE "SPECIFIED DATE"- means the previous year-
- the due date of furnishing of ROI u/s 139(1) or date on which period specified in the notice issued u/s 153A for furnishing of ROI as case may be
"SPECIFIED PREVIOUS YEAR" means the P/Y-
i) which has ended before date of search, but the date of furnishing the ROI u/s 139 for that year has not expired before the date of search and assessee has not furnished the ROI before the date of search
ii) in which search was conducted "UNDISCLOSED INCOME" means-
i) any income of specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books or other documents or transactions found in course of search u/s 132, which has
a) not been recorded on or before the date of search in the books or other documents maintained in normal course relating to such P/Y b) otherwise not been disclosed to the CIT before the date of search
ii) any income of the specified p/y represented, by any entry in respect of an expense recorded in books or other documents maintained in the normal course relating to specified p/y which is found to be false and would not have been found to be so had the search not been conducted A.O. may direct that, in case where search has been initiated on or after 01/07/2012,assessee shall pay by way of penalty, in addition to tax a) a sum computed at the rate of 10% of the undisclosed income of the specified p/y, if such assessee-
i) in course of search, in a statement u/s 132(4), admits the undisclosed income and specifies manner in which such income has been derived; ii) substantiates the manner in which the undisclosed incoome was derived; and
iii) on or before specified date- pays tax,intt., in respect of undisclosed income and furnishes ROI for specified p/y declaring such undisclosed income
b) a sum computed at the rate of 20% of the undisclosed income of the specified p/y, if such assessee-
i) in course of search, in a statement u/s 132(4),does not admits the undisclosed income in the manner given in clause (a) above; and ii) on or before the specified date-
- declares such income iht ROI furnished for the specified p/y and pays tax,intt in respect of undisclosed income c) if not follow the case a) or b) then minimum 30% or maximum 90% of the undisclosed income of the specified p/y 271AAB
note:- No penalty u/s 271(1)© shall be imposed upon assessee in respect of undisclosed income note: if it is proved that the income does not belong to specified p/y then u/s 271(1)© shall be applicable note : if in any other case other than specified p/y penalty u/s 271(i)© shall impossed
noteNo order imposing a penalty shall be made- a) by ITO exceeds 10,000, b) by a/c,d/c exceeds 20,000 except with prior apporval of j/c
17
CIT may reduce or waive the penalty imposed or imposable u/s 271(1)© by own motion or on an application made by assessee note - CIT can excerise this power when- see pg. 17 point 3
note - no order said above shall be made by CIT without approval of CCIT or D.G. if amount of penalty is exceeds Rs. 5,00,000 for one a/y or more a/y
note - the benefit of said above shall be received only once in assessee's life note - if assessee has already paid penalty then CIT will refund it to assessee note - the benefit of said above shall not received in case of raid
note - after a favourable order u/s 273A(1), no further relief is possible u/s 273A(1)/273A(4)
CIT may reduce or waive any penalty, on an application made by assessee, and after recording his reasons for doing so, if CIT is satisfied that- a) this is genuine hardship to the assessee, having regards to the circumstances of the case and
b) the assessee has cooperated in any enquiry relating to assessment or any proceeding for the recovery of any amount due from him note - the benefit of said above shall not received in case of raid
note - if penalty is waived and after assessee's financial status is boon then such penalty will not demanded by deptt.
note - no order said above shall be made by CIT without approval of CCIT or D.G. if amount of penalty is exceeds Rs. 1,00,000 for one penalty or more note - Genuine Hardships should exist at the time at which the application is made by assessee and should also exist at the time of passing of an order note - after a favourable order u/s 273A(4), relief can be obtained u/s 273A(1)/273A(4)
note- order of 273A is final order and no appeal is possible against such order but file writ in H.C. and SLP in S.C note- order of 273A should be a speaking order otherwise it will invalid
there is no time limit for making an application u/s 273A. There is no time limit for passinig an order u/s 273A
CIT can excerise 273A even if assessee has challenged the penalty order in any appeal
note - if conditions referred to in 273A are satisfied then the CIT is duty bound to grant the relief in 273A
note - the prosecution proceedings shall be dropped for an a/y in respect of which penalty u/s 271(1)© has been reduced or waived in 273A CIT u/s 273A cannot waive or reduce interest u/s 234A,B,C
note:- see comparision between u/s 273A(1) and 273A(4) on pg. 19
18 Change of incumbent of an office- see pg. 28
19
Time Limits for passing the PENALTY ORDER for PENALTY FOR CONCEALMENT OF INCOME - see pg. 29
note: it is only maximum period for impossing penalty u/s 271(1)©, while penalty shall imposs immediately by passing penalty orderwithout waiting appeal/revision order and when the appeal order will received by A.O. then A.O. shall cancel, reduce, enhance, imposs penalty by passing order u/s 275(1A)
note: the said order u/s 272(1A) shall be passed within 6 months from the end of the month in which order u/s 250/254/260A/262 is received by CIT or order u/s 263/264 is passed by CIT
20 sec. 276CC see page 35 129
275 imp 273A(1)
273A(4)
1 Advance Tax shall be calculated by estimating the current year income and then applying the tax rates in force
note: at the time of computation of advance tax agriculture income also include
2 Computation see on page 115
3 Advance Tax is not payable by-
An individual and resident in india and who does not have any PGBP income and is of age of 60 years or more at any time during the P/Y
4 For the computing the tax liability of advance tax of the assessee:- TDS or TCS is not deducted/collected from tax libility
of the assessee if tax deductor has not deduct TDS/TCS on the income paid/received to the assessee
5 Due date of advance tax- pg. 130
6 Any amount paid by way of advance tax on or before 31st march shall also be treated as advance tax paid during the F/Y
7 210If an assessment has already been made on assessee for any p/y, and A.O. is of the opinion that such person is liable to pay advance tax, then
A.O. may at any time during the F/Y but not later then the last day of febuary, by an order in writing require such person to pay advance tax
and also specify the amount of advance tax and the instalments in which such advance tax is to be paid
The A.O. shall compute the advance tax by taking:-
(i) the total assessed income of the latest P/Y for which assessment has been made or
(ii) the income declared in the ROI of any sbsequent p/y (p/y sebsequent to the p/y in which assessment is made)
whichever is higher, and apply the tax rates applicable in the current F/Y
note: if after making the above order, a ROI is furnished or an assessment is made, in respect of a later P/Y, then A.O. may amend his order
(before last day of febuary for current year) on the basis of the above income if income is increase comparision to past income. Such
sum shall be payable at the approptiate percentages on or before the due dates specified in sec. 211 falling after the date of amended order note: if an order or and amended order has been made on the assessee requiring him to pay advance tax and as per the estimation of assessee, the advance tax payable is more than the amount specified in order, then he may pay more amount
note:- If income is assessed in the year of before or same year shall not considered even income has been incereased because the amended order can be passed only on the basis of a LATER YEAR
note: the said order is final order so no appeal is possible against this order
note: if assessee does not comply with the order, then he shall be treated as an assessee in default so accordingly provision shall applicable
note: the order of 210 can be made only if an assessement has been made on the assessee otherwise not applicable note:- see pg 139
note:- see pg 143 note:- see pg 149
note : there are some cases when intt u/s 234A, 234B, 234C may waive or reduce by CCIT/Director General see pg. 141 note: intt on refund shall be granted from the 1st april to refund date (note exclude the delay in filing ROI by assessee)
S.N. SEC.
ABOUT REQUIREMENT
1
2012 In computing toatal income of the p/y , any income of the prasar bharati shall be exempt from tax2
2012 In computing total income of the p/y, any income received in india in Indian currency by a foreign company on a/c of sale of crude oil to any person in India shall be exempt from taxProvided that-
i) aggreement/ approval with C.G. ii) national interest
iii) the foreign company is not engaged in any activity, other than receipt of such income, in india