Find
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.
ITR
Penalty for under-reporting after a best judgment order
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Provisions
Sec 270A, Income-tax Act 1961 (now Sec 439); Sec 274, Income-tax Act 1961
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.
Close
- Check the order for a line starting penalty proceedings.
- Appeal the additions within 30 days.
- Reply to the penalty notice citing the appeal.
- Show that there was no misreporting where true.
- Appeal any penalty order passed.
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