Income Tax Act, 2025
Section 1: Ins. by Act 28 of 2016, s. 98 (w.e.f. 12017).
1. Ins. by Act 28 of 2016, s. 98 (w.e.f. 12017).
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(ii) in any other case, the difference between the amount of income reassessed or recomputed and
the amount of income assessed, reassessed or recomputed in a preceding order:
Provided that where under-reported income arises out of determination of deemed total income in
accordance with the provisions of section 115JB or section 115JC, the amount of total under-reported
income shall be determined in accordance with the following formula—
(A — B) + (C — D)
where,
A = the total income assessed as per the provisions other than the provisions contained
in section 115JB or section 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 underreported 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 from total income assessed while determining the
amount under item D.
Explanation.—For the purposes of this section,—
(a) “preceding order” means an order immediately preceding the order during the course of which
the penalty under sub-section (1) has been initiated;
(b) in a case where an assessment or reassessment has the effect of reducing the loss declared in
the return or converting that loss into income, the amount of under-reported income shall be the
difference between the loss claimed and the income or loss, as the case may be, assessed or
reassessed.
(4) Subject to the provisions of sub-section (6), where the source of any receipt, deposit or investment
in any assessment year is claimed to be an amount added to income or deducted while computing loss, as
the case may be, in the assessment of such person in any year prior to the assessment year in which such
receipt, deposit or investment appears (hereinafter referred to as “preceding year”) and no penalty was
levied for such preceding year, then, the under-reported income shall include such amount as is sufficient
to cover such receipt, deposit or investment.
(5) The amount referred to in sub-section (4) shall be deemed to be amount of income under-reported
for the preceding year in the following order—
(a) the preceding year immediately before the year in which the receipt, deposit or investment
appears, being the first preceding year; and
(b) where the amount added or deducted in the first preceding year is not sufficient to cover the
receipt, deposit or investment, the year immediately preceding the first preceding year and so on.
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(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 (Appeals) or the Commissioner or the Principal Commissioner, 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 Commissioner (Appeals)
or the Commissioner or the Principal Commissioner, as the case may be, but the method employed is
such that the income cannot properly be deduced therefrom;
(c) the amount of under-reported income determined on the basis of an estimate, if the assessee
has, on his own, estimated a lower amount of addition or disallowance on the same issue, has
included such amount in the computation of his income and has disclosed all the facts material to the
addition or disallowance;
(d) the amount of under-reported income represented by any addition made in conformity with
the arm’s length price determined by the Transfer Pricing Officer, where the assessee had maintained
information and documents as prescribed under section 92D, declared the international transaction
under Chapter X, and, disclosed all the material facts relating to the transaction; and
(e) the amount of undisclosed income referred to in section 271AAB.
(7) The penalty referred to in sub-section (1) shall be a sum equal to fifty per cent of the amount of
tax payable on under-reported income.
(8) Notwithstanding anything contained in sub-section (6) or sub-section (7), where under-reported
income is in consequence of any misreporting thereof by any person, the penalty referred to in
sub-section (1) shall be equal to two hundred per cent of the amount of tax payable on under-reported
income.
(9) The cases of misreporting of income referred to in sub-section (8) shall be the following,
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—
(a) where no return of income has been furnished and the income has been assessed for the first
time, the amount of tax calculated on the under-reported income as increased by the maximum
amount not chargeable to tax as if it were the total income;
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(b) where the total income determined under clause (a) of sub-section (1) of section 143 or
assessed, reassessed or recomputed in a preceding order is a loss, the amount of tax calculated on the
under-reported income as if it were the total income;
(c) in any other case, determined in accordance with the formula—
(X-Y)
where,
X = the amount of tax calculated on the under-reported income as increased by the total
income determined under clause (a) of sub-section (1) of section 143 or total income assessed,
reassessed or recomputed in a preceding order as if it were the total income; and
Y = the amount of tax calculated on the total income determined under clause (a) of
sub-section (1) of section 143 or total income assessed, reassessed or recomputed in a preceding
order.
(11) No addition or disallowance of an amount shall form the basis for imposition of penalty, if such
addition or disallowance has formed the basis of imposition of penalty in the case of the person for the
same or any other assessment year.
(12) The penalty referred to in sub-section (1) shall be imposed, by an order in writing, by the
Assessing Officer, the Commissioner (Appeals), the Commissioner or the Principal Commissioner, as the
case may be.]
1[270AA. Immunity from imposition of penalty, etc.—(1) An assessee may make an application to
the Assessing Officer to grant immunity from imposition of penalty under section 270A and initiation of
proceedings under section 276C or section 276CC, if he fulfils the following conditions, namely:—
(a) the tax and interest payable as per the order of assessment or reassessment under
sub-section (3) of section 143 or section 147, as the case may be, has been paid within the period
specified in such notice of demand; and
(b) no appeal against the order referred to in clause (a) has been filed.
(2) An application referred to in sub-section (1) shall be made within one month from the end of the
month in which the order referred to in clause (a) of sub-section (1) has been received and shall be made
in such form and verified in such manner as may be prescribed.
(3) The Assessing Officer shall, subject to fulfilment of the conditions specified in sub-section (1) and
after the expiry of the period of filing the appeal as specified in clause (b) of sub-section (2) of
section 249, grant immunity from imposition of penalty under section 270A and initiation of proceedings
under section 276C or section 276CC, where the proceedings for penalty under section 270A has not been
initiated under the circumstances referred to in sub-section (9) of the said section 270A.
(4) The Assessing Officer shall, within a period of one month from the end of the month in which the
application under sub-section (1) is received, pass an order accepting or rejecting such application:
Provided that no order rejecting the application shall be passed unless the assessee has been given an
opportunity of being heard.
(5) The order made under sub-section (4) shall be final.
(6) No appeal under section 246A or an application for revision under section 264 shall be admissible
against the order of assessment or reassessment, referred to in clause (a) of sub-section (1), in a case
where an order under sub-section (4) has been made accepting the application.]
in any other case, the difference between the amount of income reassessed or recomputed and
the amount of income assessed, reassessed or recomputed in a preceding order:
Provided that where under-reported income arises out of determination of deemed total income in
accordance with the provisions of section 115JB or section 115JC, the amount of total under-reported
income shall be determined in accordance with the following formula—
(A — B) + (C — D)
where,
A = the total income assessed as per the provisions other than the provisions contained
in section 115JB or section 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 underreported 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 from total income assessed while determining the
amount under item D.
Explanation.—For the purposes of this section,—
“preceding order” means an order immediately preceding the order during the course of which
the penalty under sub-section
has been initiated;
in a case where an assessment or reassessment has the effect of reducing the loss declared in
the return or converting that loss into income, the amount of under-reported income shall be the
difference between the loss claimed and the income or loss, as the case may be, assessed or
reassessed.
Subject to the provisions of sub-section
The amount referred to in sub-section
shall be deemed to be amount of income under-reported
for the preceding year in the following order—
the preceding year immediately before the year in which the receipt, deposit or investment
appears, being the first preceding year; and
where the amount added or deducted in the first preceding year is not sufficient to cover the
receipt, deposit or investment, the year immediately preceding the first preceding year and so on.
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The under-reported income, for the purposes of this section, shall not include the following,
namely:—
the amount of income in respect of which the assessee offers an explanation and the Assessing
Officer or the Commissioner
or the Commissioner or the Principal Commissioner, 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;
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 Commissioner
or the Commissioner or the Principal Commissioner, as the case may be, but the method employed is
such that the income cannot properly be deduced therefrom;
the amount of under-reported income determined on the basis of an estimate, if the assessee
has, on his own, estimated a lower amount of addition or disallowance on the same issue, has
included such amount in the computation of his income and has disclosed all the facts material to the
addition or disallowance;
the amount of under-reported income represented by any addition made in conformity with
the arm’s length price determined by the Transfer Pricing Officer, where the assessee had maintained
information and documents as prescribed under section 92D, declared the international transaction
under Chapter X, and, disclosed all the material facts relating to the transaction; and
the amount of undisclosed income referred to in section 271AAB.
The penalty referred to in sub-section
shall be a sum equal to fifty per cent of the amount of
tax payable on under-reported income.
Notwithstanding anything contained in sub-section
or sub-section
shall be equal to two hundred per cent of the amount of tax payable on under-reported
income.
The cases of misreporting of income referred to in sub-section
shall be the following,
namely:—
misrepresentation or suppression of facts;
failure to record investments in the books of account;
claim of expenditure not substantiated by any evidence;
recording of any false entry in the books of account;
failure to record any receipt in books of account having a bearing on total income; and
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.
The tax payable in respect of the under-reported income shall be—
where no return of income has been furnished and the income has been assessed for the first
time, the amount of tax calculated on the under-reported income as increased by the maximum
amount not chargeable to tax as if it were the total income;
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where the total income determined under clause
of sub-section
of section 143 or
assessed, reassessed or recomputed in a preceding order is a loss, the amount of tax calculated on the
under-reported income as if it were the total income;
in any other case, determined in accordance with the formula—
(X-Y)
where,
X = the amount of tax calculated on the under-reported income as increased by the total
income determined under clause
of sub-section
of section 143 or total income assessed,
reassessed or recomputed in a preceding order as if it were the total income; and
Y = the amount of tax calculated on the total income determined under clause
of
sub-section
of section 143 or total income assessed, reassessed or recomputed in a preceding
order.
No addition or disallowance of an amount shall form the basis for imposition of penalty, if such
addition or disallowance has formed the basis of imposition of penalty in the case of the person for the
same or any other assessment year.
The penalty referred to in sub-section
shall be imposed, by an order in writing, by the
Assessing Officer, the Commissioner
An assessee may make an application to
the Assessing Officer to grant immunity from imposition of penalty under section 270A and initiation of
proceedings under section 276C or section 276CC, if he fulfils the following conditions, namely:—
the tax and interest payable as per the order of assessment or reassessment under
sub-section
of section 143 or section 147, as the case may be, has been paid within the period
specified in such notice of demand; and
no appeal against the order referred to in clause
has been filed.
An application referred to in sub-section
shall be made within one month from the end of the
month in which the order referred to in clause
of sub-section
has been received and shall be made
in such form and verified in such manner as may be prescribed.
The Assessing Officer shall, subject to fulfilment of the conditions specified in sub-section
and
after the expiry of the period of filing the appeal as specified in clause
of sub-section
of
section 249, grant immunity from imposition of penalty under section 270A and initiation of proceedings
under section 276C or section 276CC, where the proceedings for penalty under section 270A has not been
initiated under the circumstances referred to in sub-section
of the said section 270A.
The Assessing Officer shall, within a period of one month from the end of the month in which the
application under sub-section
is received, pass an order accepting or rejecting such application:
Provided that no order rejecting the application shall be passed unless the assessee has been given an
opportunity of being heard.
The order made under sub-section
shall be final.
No appeal under section 246A or an application for revision under section 264 shall be admissible
against the order of assessment or reassessment, referred to in clause
of sub-section
has been made accepting the application.]