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)

Salt Lake Service Station, Kolkata vs. D.C.I.T., Circle - 49(1), Kolkata

In the result, the appeal of the assessee is allowed

ITA 497/KOL/2026[2017-2018]Status: DisposedITAT Kolkata21 Sept 2026AY 2017-2018

Bench: Shri Rajesh Kumar & Shri Pradip Kumar Choubeyassessment Year- 2017-18 Salt Lake Service Station………..........................................................................Appellant D-29, Salt Lake City, Kolkata West Bengal- 700064 [Pan No. Aamfs2099B] Vs. Deputy Commissioner Of Income Tax49(1), ..............,..……………....……….Respondent Uttarapan Complex, Ultadanga, Maniktala, Civic Centre, Kolkata West Bengal- 700054 Appearances By: Sanjay Chatterjee, Ar, Appeared On Behalf Of The Appellant. Praveen Das Chowdhury, (Sr. D.R), Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing: September 08, 2026 Date Of Pronouncing The Order: September 21 ,2026 Order Per Pradip Kumar Choubey: This Appeal Filed By The Assessee Is Directed Against The Order Dated 29.01.2026 Of The National Faceless Appeal Centre (Nfac), Delhi Passed Under Section 271Aac1 Of The Assessment Year 2017-18 Of The Income-Tax Act, 1961 (Hereinafter Referred To As “The Act”). 2. The Ld. Ar Instead Of Arguing Into The Merit Of The Case Only Said That The Present Penalty Proceedings Cannot Be Sustained In The Eye Of The Law As The Quantum Appeal Has Been Deleted By The Itat Vide Its Order 431/Kol/2025.He Has Placed The Order Passed By The Itat Kol In Ita No. 431/2023. Contrary To That Ld. Dr Supports The Impugned Order By Submitting That Penalty Proceeding Is A Separate Proceeding. 3. Upon Hearing The Submission Of The Counsel Of The Respective Parties & On Perusal Of The Impugned Order We Find That The Order U/S 271Aac((1) Of The Act Has Been Enunciated When Assessing Officers Has Found That Assessee Has Made Huge Cash Deposit Of Rs. 606,52,500/- In A Bank Account & Failed To Prove The Nature & Source Of Cash Deposits. It Is Pertinent To Mention Here That The Said Order Has Been Placed By The Assessee Before The Tribunal Bearing

Section 271ASection 69A