Section 271A of the Income Tax Act
Income-tax Act, 2025: s.441
Section 271A of the Income-tax Act, 1961 corresponds to section 441 (Failure to keep, maintain or retain books of account, documents, etc) of the Income-tax Act, 2025.
Read section 441 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 271A is Surajmal Parsuram Todi v. CIT (222 ITR 691), cited in 114 of the 701 judgments on BharatTax that turn on this section.
Leading authorities on Section 271A
A penalty under Section 271B for failure to get accounts audited cannot be levied if a penalty under Section 271A has already been imposed for non-maintenance of books of account.
If a penalty is levied under Section 271A for failure to maintain books of account, then a separate penalty under Section 271B for failure to get accounts audited under Section 44AB cannot also be levied.
Penalty under section 271(1)(c) cannot be levied solely on the basis of findings in the assessment proceedings. The Assessing Officer must discharge the burden of proving concealment or inaccurate particulars with additional material.
If an assessee has not maintained books of accounts, the question of getting those accounts audited under Section 44AB does not arise, and therefore, a penalty under Section 271B for failure to get accounts audited cannot be levied. Non-maintenance of books is separately punishable under Section 271A.
Whether an assessee has shown 'reasonable cause' under Section 273B, particularly in the context of penalties under Section 271D for violations of Section 269SS, is a question of law involving a legal inference from primary facts. Penalties under Section 271D are not leviable if reasonable cause is established, even for journal entries, provided transactions are genuine and bona fide.
When an assessee fails to maintain books of account, resulting in a confirmed penalty under section 271A, no additional penalty under section 271B can be levied for the failure to get accounts audited under section 44AB, as there are no accounts to audit.
Books of account include electronic records and are maintained to provide credible financial data for tax returns and to determine income. Penalty under section 271B for not getting accounts audited is applicable only when accounts are maintained, whereas section 271A applies if no accounts are maintained at all.
Reassessment proceedings initiated for AY 2015-16 after April 1, 2021, are barred by limitation and invalid, as per the amended provisions of the Finance Act, 2020.
An addition under section 69A is justified when cash deposits in a bank account significantly exceed reported sales and the assessee fails to provide a satisfactory explanation for the source of these deposits.
When an assessee opts for the presumptive taxation scheme under Section 44AD of the Income Tax Act, offering income at a specified percentage of gross receipts, they are exempt from maintaining books of account and are not obligated to explain individual entries of cash deposits unless such entries lack nexus with the gross receipts.
