TMI BlogInsertion of new section 270A - Penalty for underreporting and misreporting of income.X X X X Extracts X X X X X X X X Extracts X X X X ..... -reported income. (2) A person shall be considered to have under-reported his income, if- (a) the income assessed is greater than the income determined in the return processed under clause (a) of sub-section (1) of section 143; (b) the income assessed is greater than the maximum amount not chargeable to tax, where no return of income has been furnished; (c) the income reassessed is greater than the income assessed or reassessed immediately before such reassessment; (d) the amount of deemed total income assessed or reassessed as per the provisions of section 115JB or section 115JC, as the case may be, is greater than the deemed total income determined in the return processed under clause (a) of sub-section (1) of section 143; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 115JC (herein called general provisions); B = the total income that would have been chargeable had the total income assessed as per the general provisions been reduced by the amount of under-reported income; C = the total income assessed as per the provisions contained in section 115JB or section 115JC; D = the total income that would have been chargeable had the total income assessed as per the provisions contained in section 115JB or section 115JC been reduced by the amount of under-reported income: Provided further that where the amount of under-reported income on any issue is considered both under the provisions contained in section 115JB or section 115JC and under general provisions, such amount shall not be reduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceding year is not sufficient to cover the receipt, deposit or investment, the year immediately preceding the first preceding year and so on. (6) The under-reported income, for the purposes of this section, shall not include the following, namely:- (a) the amount of income in respect of which the assessee offers an explanation and the Assessing Officer or the Commissioner or the Commissioner (Appeals), as the case may be, is satisfied that the explanation is bona fide and the assessee has disclosed all the material facts to substantiate the explanation offered; (b) the amount of under-reported income determined on the basis of an estimate, if the accounts are correct and complete to the satisfaction of the Assessing Officer or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, namely:- (a) misrepresentation or suppression of facts; (b) failure to record investments in the books of account; (c) claim of expenditure not substantiated by any evidence; (d) recording of any false entry in the books of account; (e) failure to record any receipt in books of account having a bearing on total income; and (f) failure to report any international transaction or any transaction deemed to be an international transaction or any specified domestic transaction, to which the provisions of Chapter X apply. (10) The tax payable in respect of the under-reported income shall be the amount of tax calculated- (a) on such income as if it were the total income, in the case of a company, firm or local authority; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction seeks to provide that a person shall be considered to have under reported his income if, (i) the income assessed is greater than the maximum amount not chargeable to tax, where no return of income is filed; (ii) the assessed income is greater than the income determined upon processing under clause (a) of sub-section (1) of section 143, where return is filed; (iii) the income assessed is greater than the income assessed or reassessed immediately before such reassessment; (iv) the income assessed or reassessed has the effect of reducing the loss or converting such loss into income, Appropriate provisions to cover minimum alternate tax and alternate minimum tax cases on the above lines are proposed to be provided. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not include certain cases mentioned therein. Sub-section (7) of the proposed new section seeks to provide that the rate of penalty shall be fifty per cent. of the tax payable on under - reported income. Sub-section (8) of the proposed new section seeks to provide that the cases of under - reported income falling under misreporting of income shall be liable for penalty at the rate of two hundred per cent. of the tax payable on such misreported income. Sub-section (9) of the proposed new section seeks to specify the cases of misreporting of income referred to in sub-section (8). Sub-section (10) of the proposed new section seeks to provide that the tax payable on under-reported income shall be calculated as if such under-reported ..... X X X X Extracts X X X X X X X X Extracts X X X X
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