Law Relating to Under-reporting & Misreporting of Income by Taxmann

Law Relating to Under-reporting & Misreporting of Income is a comprehensive handbook that addresses the complexities of income tax penalties under Sections 270A and 271(1)(c) of the Income Tax Act. This book clarifies the differences between tax planning, avoidance, and evasion. It highlights how taxpayers may inadvertently cross into illegal territory by under-reporting or misreporting their income through accounting manipulations, non-disclosure, and misinterpreting legal provisions.

For assessment years up to 2016-17, penalties were imposed under Section 271(1)(c) for concealing income or furnishing inaccurate particulars. From the assessment year 2017-18 onwards, Section 270A replaced these provisions, introducing the concepts of under-reporting and misreporting of income. This book analyses the evolution of these provisions, their application, and the distinctions between under-reporting and misreporting.

This book is helpful for tax professionals, legal practitioners, and taxpayers seeking to understand the complexities of income reporting and penalties under the Income Tax Act. It combines theoretical analysis with practical tools, making it helpful for tax compliance or dispute resolution.

The Present Publication is the Latest Edition, amended by the Finance (No. 2) Act, 2024. This book is authored by D.C. Agrawal and Ajay Kumar Agrawal, with the following noteworthy features:

• [Comprehensive Analysis] The book provides an in-depth examination of Section 270A, supplemented by relevant circulars and detailed commentary, outlining the transition from earlier penalty provisions under Section 271(1)(c) to the current framework
• [Historical Context and Principles] It traces the evolution of penalty provisions, analysing how judicial interpretations and tribunal judgments have shaped the current laws, helping readers understand the principles underpinning penal statutes
• [Practical Guidance] The book includes over 30 draft responses and submissions tailored to various scenarios involving penalties under Section 270A. These practical tools assist taxpayers and advisors in drafting effective defences against notices from tax authorities
• [Comparative Analysis] A thorough comparison of Sections 270A and 271(1)(c) helps readers understand the legislative intent and practical differences, including the interplay with other related sections like 271AAB
• [Digest of Case Laws] An appendix summarising significant case laws related to under-reporting and misreporting of income is also included in the book

The structure of the book is as follows:

• Part One – Legal Framework and Analysis
• This section covers the evolution and current state of income tax penalties, with a focus on Section 270A introduced by the Finance Act, 2016
• Chapter 1 – Overview of Section 270A, relevant circulars, and a detailed analysis of the provision
• Chapter 2 – A historical review of penalty provisions, providing context and understanding of the evolution of current laws
• Chapters 3 to 12 – Cover various aspects, including the interpretation of penal statutes, burden of proof, evidentiary requirements, under-reporting and misreporting of income, and comparisons with earlier provisions under Section 271(1)(c).
• Part Two – Practical Responses and Drafts
• This section provides practical assistance by providing over 30 draft responses to penalty notices and submissions against penalty orders, aiding taxpayers and professionals in preparing their defences
• Chapters 13 to 46 – Present scenario-specific drafts that cover various factual situations, helping readers tailor their responses to specific cases of penalty initiation or levy