Opinion Of Eminent Legal Luminaries On Controversial Issues

Penalty in respect of certain income

QUERY: As per section 270A in the case of misreporting of income the penalty leviable is 200% of the amount of tax payable. In case the income is assessed u/s. 68 to 69D, the tax payable is 60% of income. So now in this case what will be levy of penalty?
ANSWER: Section 115BBE provides for taxing income under sections 68 to 69D. The section prescribes a flat rate of 60% for all income brought to tax for lack of proof as to the source under sections 68 to 69D, plus surcharge @ 25% of the tax. This would mean that such income would be taxed on standalone basis, whose aggregate income including such income falling under the provisions falls below taxable limit.
Section 115 BBE(2) provides that no deduction would be allowed for any expenditure or allowance or set off of any loss against receipt of gross amount.
Section 270A would not be applicable for such incomes. But section 271AAC would be applicable for such incomes, which provides for penalty @ 10% of the tax payable on such incomes. The proviso to the said section provides that no penalty shall be levied in respect of such incomes, if the assessee has included in his return of income furnished under section 139 and tax is paid under section 115BBE on or before the end of the relevant previous year.

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