Penalty under section 271 AA under Income Tax Act 1961, for failure to keep and maintain information and document in respect of certain transactions
Penalty u/s 271AA is applicable for failure to keep, maintain, report, furnish information and document, etc. in respect of an international transaction or specified domestic transaction.
– If a person fails to keep and maintain any such information and document as required u/s 92D(1) or u/s 92D(2).
– If a person fails to report such transaction which he is required to do so or
– If a person furnishes incorrect information or document.
– If a person maintains incorrect information or document.
If a person fails to furnish the information and the document required u/s 92D(4).
Penalty u/s 271AA can be imposed by the Assessing Officer or the Commissioner (Appeals).
Assessing Officer or Commissioner (Appeals) may direct the assessee to pay a penalty equal to 2% of the value of the international transaction or specified domestic transaction entered by the assessee.
If the assessee fails to furnish the information & the document as required u/s 92D(4) under sub-section (4) of section 92D, the prescribed income-tax authority referred to in the said sub-section may direct that such person shall pay, by way of penalty, a sum of five hundred thousand rupees.
Sec 271AA(2) – A penalty equal to Rs. 5,00,000/- shall be levied for contravention of section 271AA(2).
Note: Penalty under this section shall not be imposed unless the assessee is given a reasonable opportunity of being heard.
If the taxpayer proves that there was a reasonable cause for failure, then in that case immunity from penalty will be provided in genuine cases.