Interest, Fee and Penalty - Under Income-tax Act (As amended by Finance Act, 2023)

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Description
Compliance of tax laws is of vital importance to any Government in its prime source collection of taxes, to feed its welfare and sovereign functions. There has been a metaphoric rather pyramidal change in tax collection system. From initial demanded or commanded compliance, it turned over a time to voluntary compliance, might be command was difficult in timely collection of taxes due to disputes and latches. Tax collection by simple recovery mode almost failed in due collection on time. A provision of levy of interest on late payments was introduced but that did not yield much. Penalties were provided for late filing, non-compliance in furnishing required details and information sought for and for concealment under reporting and misreporting of income. Collection of tax was advanced in phased manner which stemmed to unconstrained interference volitional volantine mode. Firstly, as proxy tax by tax deduction/collection at source in the year of receipt of income itself on fixed sources of payment of income, like salary, interest,  dividend, income of offshore taxpayers, insurrected to on credits and in kind payments to business transactions of part or sans income. The second step was to cap the business and other sources of income which were beyond the initial scheme of deduction of tax at source. This source was made to pay estimated tax also in the year of income as advance tax equally in 3 to 4 instalments. Thirdly, by a self-assessment scheme introduced as a next step for early collection. The deficient tax was required to be paid along with the return or updated return of income. To compensate over payment found on assessment the Government fairly conceded to pay interest to the taxpayer. Search assessments were put in a separate compartmental system. Separate interest and penalty provisions for delayed search returns and undisclosed income were inserted in addition.
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Contents
Chart 1 : Interest & Fee
Chart 2 : Penalties at a glance
Chapter 1 : Interest, Fee and Penalty
Chapter 2 : Self assessment interest (Sections 140A & 140B)
Chapter 3 : Interest on TDS failure (Section 201(1A))
Chapter 4 : Interest on TCS (Section 206C(7))
Chapter 5 : Delayed payment of tax (Section 220)
Chapter 6 : Interest on delayed or no return (Section 234A)
Chapter 7 : Interest on payment of advance tax (Section 234B)
Chapter 8 : Interest on short payments in instalments (Section 234C)
Chapter 9 : Interest on excess refund (Section 234D)
Chapter 10 : Interest on refunds (Section 244A)
Chapter 11 : Fee for default in furnishing statements (Section 234E)
Chapter 12 : Fee for default in furnishing return (Section 234F)
Chapter 13 : Fee for default relating to statement or certificate (Section 234G)
Chapter 14 : Fee for default in linking Aadhaar and PAN (Section 234H)
Chapter 15 : General principles levying penalty
Chapter 16 : Penalty for default in payment of tax (Section 221)
Chapter 17 : Penalty for under reporting and misreporting income (Section 270A)
Chapter 18 : Immunity from penalty/prosecution (Section Immunity 270AA)
Chapter 19 : Return related defaults (Section 271 now not existing)
Chapter 20 : Failure regarding books (Section 271A)
Chapter 21 : Failure regarding international transactions (Section 271AA)
Chapter 22 : Penalty in search cases (Section 271AAA & 271AAB)
Chapter 23 : Penalty for intangible additions (Section 271AAC)
Chapter 24 : Penalty for false entry & omission (Section 271AAD)
Chapter 25 : Penalty for benefits to related persons (Section 271AAE)
Chapter 26 : Penalty for accounts audit (Section 271B)
Chapter 27 : Penalty for not furnishing TP report & subscription scheme (Section 271BA & 271BB)
Chapter 28 : Penalty for not deducting and paying tax (Section 271C)
Chapter 29 : Penalty for not collecting Tax (Section 271CA)
Chapter 30 : Penalty for taking or repaying deposits in cash (Section 271D)
Chapter 31 : Penalty for accepting cash over 2 lakhs (Section 271DA)
Chapter 32 : Penalty for repayment in cash (Section 271E)
Chapter 33 : Penalty for not filing returns and statements (Section 271F/FA/FAA/FAB/FB)
Chapter 34 : Transfer pricing obligation failure (Sections 271G)
Chapter 35 : Failure in furnishing information (Section 271GA)
Chapter 36 : Failure to deliver TDS/TCS statement/information (Section 271H)
Chapter 37 : Penalty for not furnishing information of payment to non-resident (Section 271-1)
Chapter 38 : Penalty for incorrect information by merchant banker valuer (Section 271J)
Chapter 39 :  Failure to furnish statements, etc (Section 271K)
Chapter 40 : Discontinuance notice, refusing answer, information etc. (Section 272/272A)
Chapter 41 : Non-compliance of 133B (Section 272AA)
Chapter 42 : Penalty for failure to apply PAN (Section 272B)
Chapter 43 : Penalty for failure to comply 203A quote TDS/TCS number (Section 272BB)
Chapter 44 : Penalty for 206CA default (Section 272 BBB)
Chapter 45 : Penalty for wrong estimate (Section 273)
Chapter 46 : Waiver or reduction of penalty (Section 273A)
Chapter 47 : Immunity on abatement 245HA (Section 273AA)
Chapter 48 : Reasonable cause of failure (Section 273B)
Chapter 49 : Procedure (Section 274)
Chapter 50 : Limitation for levy of penalty (Section 275)
Chapter 51 : Power to tender immunity (Section 291)
SUBJECT INDEX
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Author Details
R.P. GARG has been specialising in corporate and taxation laws having over 50 years tax experience varied from consulting in top tax law firms, as a Chartered Accountant, as an advocate of High Courts and Supreme Court and as a member of Income Tax Appellate Tribunal for over 23 years presiding and conducting second appeals arising in Direct Tax laws and retired as the Senior Vice President thereof, a penultimate post as it then existed.
Academically, he is a commerce graduate, a Fellow member of the Institute of Chartered Accountants of India and has a Master degree in law from Delhi University, India. He is also a senior tax consultant to internationally reputed firms dealing in corporate tax and offshore transaction matters. He has been a continuous source of contributing papers in seminars and tax journals on International and Indian tax laws. His recent publications are: Faceless Assessments, Rectifications & E-Advance Rulings (Third 2023 Edition); Faceless Appeals, Revisions & Judicial Review (Third 2023 Edition); Business Exemptions, Expenditure and Deductions (Second 2023 Edition);  Offences & Prosecution (2023 Edition); Interest, Fee and Penalties (2023 Edition); National Company Law Tribunal including Appellate Tribunal (2021 Edition) covering Companies Act, 2013; Insolvency and Bankruptcy Code 2016; LLP Act, 2008 Competition Act 2012. He has been the co-authors of books on Law & Practice of Tax Treaties; Indian GAAR, Taxation of Non-residents; International Law; Law of Tax Treaties, Practice and Procedure before ITAT, Students series on Income tax, Limitation & Arbitration, and Gift tax laws. He has been the Chairman of the Chamber of Tax Consultants, Delhi Chapter for consecutive two years spreading knowledge in taxation stream and as Past Chairman thereafter for another two years.
BEENU YADAV is B.A. (Hons.) Economics and a Law Graduate practicing in corporate income tax, international taxation since 1997. She has been associated with reputed law firms advising on civil law, direct tax and industrial law matters. She has been the co-authors of books on Law & Practice of Tax Treaties and Income Tax Appellate Tribunal, and Interest Fee and Penalties.