Central Board of Direct Taxes (CBDT) issued directions to all the director general of Income Tax (inv.), Chief Commissioners (central) and director general of Income tax (I & CI) to impose penalty under section 271AAD of Income Tax Act, 1961 for false entry, false invoice etc. in books of accounts. Section 271 AAD under Income Tax is inserted from 1st April, 2020.
The CBDT directions to impose penalty under section 271AAD are in the image below-
Read Also: Important Income Tax Penalties under Income Tax Act, 1961
The provisions of section 271AAD are-
(1) Without prejudice to any other provisions of this Act, if during any proceeding under this Act, it is found that in the books of account maintained by any person there is—
(i) a false entry; or
(ii) an omission of any entry which is relevant for computation of total income of such person, to evade tax liability,
the Assessing Officer may direct that such person shall pay by way of penalty a sum equal to the aggregate amount of such false or omitted entry.
(2) Without prejudice to the provisions of sub-section (1), the Assessing Officer may direct that any other person, who causes the person referred to in sub-section (1) in any manner to make a false entry or omits or causes to omit any entry referred to in that sub-section, shall pay by way of penalty a sum equal to the aggregate amount of such false or omitted entry.
Explanation.—For the purposes of this section, “false entry” includes use or intention to use—
(a) forged or falsified documents such as a false invoice or, in general, a false piece of documentary evidence; or
(b) invoice in respect of supply or receipt of goods or services or both issued by the person or any other person without actual supply or receipt of such goods or services or both; or
(c) invoice in respect of supply or receipt of goods or services or both to or from a person who does not exist.]
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