Section 271AAC(1) of the Income Tax Act

Income-tax Act, 2025: s.443

Section 271AAC(1) falls under section 271AAC of the Income-tax Act, 1961, which corresponds to section 443 (Penalty in respect of certain income) of the Income-tax Act, 2025.

Read section 443 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 271AAC(1) is Office of the Chief Post Master General v. Living Media India Ltd. (348 ITR 7), cited in 50 of the 1,211 judgments on BharatTax that turn on this section.

Leading authorities on Section 271AAC(1)

Office of the Chief Post Master General v. Living Media India Ltd.
348 ITR 7 · 2012 · Supreme Court
50
citing judgments

The law of limitation applies to all, including the government. Condonation of delay in filing appeals requires a party to demonstrate sufficient, bona fide, and reasonable cause, as courts should not condone delays mechanically or for routine explanations, gross negligence, or inaction.

Sunder Carpet Industries v. ITO
324 ITR 417 · 2010 · High Court
30
citing judgments

A Departmental Valuer's Report constitutes material for forming a belief of escaped income, validating reassessment proceedings.

Commissioner of Income-tax, Chennai v. T. Rangroopchand Chordia
26 Taxmann.com 54 · 2012 · High Court
29
citing judgments

The Income Tax Act, 1961 allows for best judgment assessments even in cases of search assessments under Section 153A, especially when the assessee fails to file a return.

CIT v. General Insurance Corporation
286 ITR 232 · 2006 · Supreme Court
27
citing judgments

The Supreme Court case CIT v. General Insurance Corporation (286 ITR 232) is cited for the proposition that it dealt with the issue of bonus shares, and therefore may not be applicable to cases involving the increase of authorized share capital.

CIT v. Shadiram Balmukund
84 ITR 183 · 1972 · High Court
24
citing judgments

Penalty proceedings are vitiated if the Assessing Officer's satisfaction is not based on the order passed by the Assessing Officer or the CIT(A). The jurisdiction to impose penalty rests with the authority that is satisfied about the concealment or furnishing of inaccurate particulars of income.

ITO v. Madnani Engineering Works Ltd.
118 ITR 1 · 1979 · Supreme Court
21
citing judgments

An assessment cannot be reopened merely because the Income Tax Officer forms a different opinion on the facts already examined, especially after the assessee has fully disclosed all material facts.

(iii) Oracle India Pvt Ltd. v. Deputy Commissioner of Income Tax
13 DTR 371 · 2008 · Reported
15
citing judgments

The court considers whether to condone a delay in filing an appeal, taking into account the explanation provided and the arguments from both parties.

Dr. K.M. Mehaboob v. DCIT
130 Taxmann.com 130 · 2021 · High Court
12
citing judgments

Tribunals should not set aside an order passed by the CIT(A) without cogent reasons, and doing so without such reasons is arbitrary and unreasonable. However, the Supreme Court has affirmed this principle while dismissing an SLP on grounds of delay.

Emphasis1 Supplied) (iii) In K. K. Seshaiyer v. CIT
246 ITR 351 · 2000 · High Court
11
citing judgments

When an assessee has duly recorded the actual cost of construction and this cost has been accepted by the Tribunal, the opinion of a valuer cannot be substituted for the recorded cost without a finding that the building is of a better quality or larger than claimed.

MS Poonam Industries v. CIT
178 Taxmann 319 · 2009 · Reported
8
citing judgments

Judgments on Section 271AAC(1)

Sunil Govind Naik, Mumbai vs. DCIT-41(4)(1), Mumbai

In the result, the ground No

ITA 316/MUM/2026[2020-21]Status: DisposedITAT Mumbai03 Aug 2026AY 2020-21

Bench: Shri Pawan Singh & Shri Girish Agrawal(Physical Hearing) Sunil Govind Naik, Dcit – 41(4)(1), Mumbai Flat No. 3703, Tower C, Oberoi Vs Room No. 852, Kautilya Bhavan, Exquisite, Goregaon East, S.O., Bandra Kurla Complex, Mumbai – 400063. Mumbai – 400051. [Pan: Aagpn4363H] Appellant / Assessee Respondent / Revenue Assessee By Shri Vimal Punmiya, Ca Revenue By Shri Surendra Mohan,Sr. Dr. Date Of Hearing 05.05.2026 Date Of Pronouncement 03.08.2026 Order Under Section 254(1) Of Income Tax Act Per Pawan Singh; 1. This Appeal By Assessee Is Directed Against The Order Of Ld. Cit(A)/ Nfac Dated 01.12.2025 For Assessment Year (Ay) 2020-21. The Assessee Has Raised Following Grounds Of Appeal: “1. The Nfac Erred In Law & On Facts By Confirming The Addition Of Rs. 1,27,39,461/- As Bogus Long Term Capital Loss, Disregarding That The Shares Were Purchased Through Banking Channels, Held In A Demat Account, Purchased & Sold On A Recognized Stock Exchange (Bse/Nse) Through A Recognised Registered Broker. The Transactions Were Supported By Documentary Evidence (Contract Notes, Demat Statements, Bank Entries). 2. The Nfac Failed To Appreciate That The Assessing Officer (Ao) Relied Solely On General Investigations By The Directorate Of Investigation Without Specific Evidence Linking The Appellant To Any Manipulation Or Wrong Doing & Without Allowing Cross-Examination Of Third Parties (E.G. Shri Alok Agarwal), Thereby Violating Principles Of Natural Justice. 3. The Nfac Erred In Law In Confirming The Addition Of Rs. 1,27,39,461/- Under Section 68 R.W.S. 115Bbe As Unexplained Cash Credits, Despite The Fact That The Appellant Having Discharged The Burden Of Proof As Per Law & Without Pointing Out Any Defect In The Evidences Submitted. Sunil Govind Naik

Section 234ASection 254(1)Section 271ASection 68Section 69C