New section For Penalty under Income Tax for False Entry Or Omission of Entry

Introduction 

Section 271AAD is for Penalty for False entry, the omission of any entry or information which is relevant for computation of total income of the taxpayer.

Applicability of this Section 

• Individual or Huf 
• Company 
• Association of person 
• Trust or Society 

When this Penalty impose?

If any assessing officer finds-

1.  A false entry, or
2. The omission of any entry which is relevant for computation of total income of an assessee

The "false entry" here means the following:

• Forged or false documents such as fake invoice
• Any invoice of supply or receipts of goods or services issued by any person without actual supply or receipt of goods or services
• An invoice in respect of supply or receipt of goods or services or both to or from a person who does not exist

How many penalties should impose on the taxpayer?

Assessing officer may direct the assessee to pay a penalty of an amount equal to the sum of such false or omitted entries.

For example: If an Assesse had a claim expenses amount Rs. 100 in his books of account and during the Assessment proceedings, he shows the invoices but when the assessing officer verifying the supplier the supplier does not exist.

In this case, the Assessing officer can impose a penalty equal to Rs. 100