Explain the penalties regarding the following cases or Different penalties are imposed regarding the different offenses in the income tax law 1. Penalties for failure to furnish the return of total income 2. Failure to Furnish statement 3. Failure to maintain prescribed Accounts
(1) Penalty for failure to furnish Return of total income :
If any person fails to furnish the return of his total income in a' particular period without a reasonable cause. The income tax commissioner may impose a penalty on that person.
(2) Penalty for failure to furnish statements :
if any person obstructs any income tax authority in the discharge of his duty a penalty can be imposed on that person. Such penalty will be imposed by the commissioner income Tax. The amount of penalty should not exceed than Rs. ten thousand (10000) will be equal to one tenth (1/10) of one (1%) of total tax payable for each day of default. But the minimum amount of penalty must be Rs. 500 and 25% of taxable maximum.
Returns of income submitted
i) Annual return of income.
ii) Return required by commissioner by notice.
iii) Return required .by commissioner for additional assessment.
iv) Return of income in case of discontinued business.
v) Return in case of persons about to leave Country.
(3) Penalty for failure to furnish statements :
The commissioner income tax may impose penalty if any person fails to furnish the required statement with out any reasonable cause with in due time penalty.
i) Initial penalty Rs.2000.
ii) Further Rs. 200 /per day during which the default continues.
Following are the statements which are submitted.
i) Statement regrading salary, dividend, interest and rent.
ii) Statement regarding receipts to income tax authorities.
iii) Statement regarding certain properties.
iv) Statement regarding certain contracts.
(4) Penalty for non-payment of tax :
The commissioner income tax may impose penalty on such person who fails to pay the tax with in specified time.
i) 5% of tax for first default.
ii) 5% of the tax additional (dud) penalty for second default.
iii) 25% of the tax additional penalty for the 3rd default.
iv) 50% of the tax additional penalty for forth and subsequent default.
(5) Penalty for concealment of income :
If income tax authorities find during the course of proceeding that any taxpayer has concealed his income or furnished wrong particulars of such income a penalty may be imposed.
Income tax authority may impose penalty equal to the amount tax evaded by such person.
Ways of Concealment
i) Money not shown by the taxpayer.
ii) Investment made by the taxpayer not shown.
iii) Concealed the income chargeable to tax.
iv) Valuable articles not shown by the taxpayer.
v) Claiming any deduction for an expenditure not actually incurred.
(6) Penalty Failure to Maintain the Accounts :
The commissioner income tax may impose penalty on person who fails to maintain the record without any reasonable cause.
i) Rs. 2000 for first failure.
ii) Rs. 5000 for second Failure.
iii) Rs. 10000 for third failure.
(7) Penalty for non-compliance with notice :
If any person fails to comply the notice of the income tax commissioner without reasonable cause he can impose penalty.
i) Notice to produce wealth statement.
ii) Notice to produce Books of accounts.
i) Rs.2000 for first failure.
ii) Rs.5000 for second failure.
iii) Rs. 10000 for 3rd failure or subsequent.
Note : Penalty should be reduced by 75% if
tax is assessed less than Rs. Twenty thousands (20000. penalty.
(8) Failure to Give notice of Discontinuance of Business or Profession :
Some times one person discontinues the business but he does not issue the notice. It is necessary that he should inform the commissioner income tax in this regard at least 15 days before. The commissioner income tax may impose penalty which is equal to the tax payable for the income year in which the business is discontinued.
(9) Failure to give notice by liquidator :
It is the duty of the liquidator of the private company that he should inform about his appointment to the commissioner. If he fails to give notice then commissioner income tax can impose penalty not more then ten thousands rupees. 10000
(10) Penalty for obstruction :
If any person creates problem for any income tax authority in discharge of his function then a penalty can be imposed.The commissioner income tax can impose the penalty not more than Rs.10000.
Conditions For Penalty :
i) Penalty will. be imposed by‘the commissioner income tax.
ii) A reasonable opportunity should be given to the taxpayer to explain his position then penalty should be imposed.