Section 271j Of Income Tax Act

A penalty under Section 271J is imposed on a

chartered accountant, merchant banker or registered valuer for furnishing false information in any reports or certificates. In this article, we discuss the provisions of Section 271j Of Income Tax Act.

Section 271J of Income Tax

Section 271J of the Income Tax Act is reproduced below for reference:

271J. Penalty for furnishing incorrect information in reports or certificates.—Without prejudice to the provisions of this Act, 
where the Assessing Officer or the Commissioner (Appeals), in the course of any proceedings under this Act, finds that 
an accountant or a merchant banker or a registered valuer has furnished incorrect information in any report or certificate 
furnished under any provision of this Act or the rules made thereunder, the Assessing Officer or the Commissioner (Appeals) 
may direct that such accountant or merchant banker or registered valuer, as the case may be, shall pay, by way of penalty, 
a sum of ten thousand rupees for each such report or certificate.

Tax Audit Report

Income tax laws require a taxpayer to get the accounts audited from a qualified chartered accountant. The Chartered Account who undertakes the audit is required to prepare an audit report based on the findings, observation, and so on. Audit report of 1 and other assessees in respect of audit conducted under Section 44AB must be prepared in Form No. 3CB and the particulars of the audit must be reported in Form 3CD. Tax audit reports for those persons who are necessitated to get their accounts audited by or under any other law must be prepared in Form 3CA/3CB and the particulars for the same must be reported in Form 3CD. Tax audits must be furnished within the 30

th of September of the relevant assessment year. Tax audit report in Forms 3CA/3CB and 3CD is one of the major reports filed by a Chartered Accountant.

Penalty under Section 271J

Under this section, the person in default, who can be a chartered accountant, merchant banker or registered valuer will be levied with a penalty that amounts to ten thousand rupees for each such report or certificate. A tax audit report refers to a report submitted by a Chartered Accountant to the Income Tax Department.

Exemptions from Penalty

A professional would be reprieved of any penal consequences if the concerned person proves that there was a reasonable cause for the failure. Hence, the penalty under this section would not be levied for minor or negligible mistakes made in the course of report preparation.

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Frequently Asked Questions

Common questions about Section 271J Income Tax Act Penalties Explained.

Section 271J of the Income Tax Act imposes a penalty on chartered accountants, merchant bankers, or registered valuers if they furnish incorrect information in any reports or certificates required under the Income Tax Act or related rules.

Under Section 271J, the penalty is a sum of Rs. 10,000 for each report or certificate that contains incorrect information furnished by a chartered accountant, merchant banker, or registered valuer.

Yes, Section 271J applies to any report or certificate furnished under any provision of the Income Tax Act or the rules made thereunder, such as tax audit reports, valuation reports, or other certifications required by the tax authorities.

The Assessing Officer or the Commissioner (Appeals), during the course of any proceedings under the Income Tax Act, has the authority to direct the imposition of the penalty under Section 271J if they find incorrect information in reports or certificates.

The penalty under Section 271J may not be levied if the professional can prove that there was a reasonable cause for the failure or incorrect information. Minor or negligible mistakes may also be exempted from the penalty.

Tax audit reports, such as Form 3CB and Form 3CD, prepared by chartered accountants are one of the major reports that come under the purview of Section 271J. Furnishing incorrect information in these reports can attract the penalty under this section.

The penalty under Section 271J is imposed per report or certificate that contains incorrect information. A separate penalty of Rs. 10,000 can be levied for each report or certificate found to have incorrect information.

Yes, like other penalties under the Income Tax Act, the penalty imposed under Section 271J can be challenged or appealed through the appropriate appellate authorities or courts, subject to the applicable procedures and timelines.

Section 271J specifically mentions chartered accountants, merchant bankers, and registered valuers as professionals who can be penalized for furnishing incorrect information in reports or certificates required under the Income Tax Act or related rules.

Yes, the penalty under Section 271J is imposed without prejudice to other provisions of the Income Tax Act, meaning it is in addition to any other penalties or consequences that may be applicable for furnishing incorrect information or violating other provisions of the Act.