Answer

1. F

   Facts

   If the assessed income is higher than the income you returned, or above the basic exemption limit where no return was filed, a penalty under Sec 270A can be started. It is 50% of tax on under-reported income, and 200% for misreporting.

2. P

   Provisions and law

   • Sec 270A, Income-tax Act 1961 (now Sec 439)Penalty of 50% of tax on under-reported income, and 200% for misreporting.
   • Sec 274, Income-tax Act 1961No penalty order without giving you a hearing (now Sec 471, mapping confidence medium).
3. A

   Analysis

   Say the order assesses ₹8,00,000 where no return was filed. The under-reported income is measured against the basic exemption limit, and tax on it sets the 50% penalty. If you appeal the addition, ask for the penalty proceedings to be kept pending till the appeal is decided. Penalty can also be challenged on its own.

4. C

   Conclusion

   1. 1Check the order for a line starting penalty proceedings.
   2. 2Appeal the additions within 30 days.
   3. 3Reply to the penalty notice citing the appeal.
   4. 4Show that there was no misreporting where true.
   5. 5Appeal any penalty order passed.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.