The Income-Tax Act, 1961

¹[273. False estimate of, or failure to pay, advance tax.-

²[(1) If the ³[Assessing Officer], in the course of any proceedings in connection with the regular assessment for any assessment year, is satisfied that any assessee-

(a) has furnished under clause (a) of sub-section (1) of section 209A a statement of the advance tax payable by him which he knew or had reason to believe to be untrue, or

(b) has 4*** failed to furnish a statement of the advance tax payable by him in accordance with the provisions of clause (a) of sub-section (1) of section 209A, he may direct that such person shall, in addition to the amount of tax, if any, payable by him, pay by way of penalty a sum-

(i) which, in the case referred to in clause (a), shall not be less than ten per cent but shall not exceed one and a half times the amount by which the tax actually paid during the financial year immediately preceding the assessment year under the provisions of Chapter XVIIC falls short of-

(1) seventy-five per cent. of the assessed tax as defined in sub-section (5) of section 215, or

(2) the amount which would have been payable by way of advance tax if the assessee had furnished a correct and complete statement in accordance with the provisions of clause (a) of sub-section (1) of section 209A, whichever is less;

(ii) which, in the case referred to in clause (b), shall not be less than ten per cent. but shall not exceed one and a half times of seventy-five per cent. of the assessed tax as defined in sub-section (5) of section 215]:

⁵[Provided that in the case of an assessee, being a company, the provisions of this sub-section shall have effect as if for the words "seventy-five per cent.", at both the places where they occur, the words "eighty-three and one-third per cent." had been substituted.]

⁶[(2)] If the ³[Assessing Officer], in the course of any proceedings in connection with the regular assessment for the assessment year commencing on the 1st day of April, 1970, or any subsequent assessment year, is satisfied that any assessee-

¹[(a) has furnished under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (5) of section 209A, or under sub-section (1) or sub-section (2) of section 212, an estimate of the advance tax payable by him which he knew or had reason to believe to be untrue, or]

²[(aa) has furnished ³[under sub-section (4) of section 209A or] under sub-section (3A) of section 212 an estimate of the advance tax payable by him which he knew or had reason to believe to be untrue, or]

(b) has 4*** failed to furnish an estimate of the advance tax payable by him in accordance with the provisions of ⁵[clause (b) of sub-section (1) of section 209A], or

(c) has 4*** failed to furnish an estimate of the advance tax payable by him in accordance with the provisions of ⁶[sub-section (4) of section 209A or sub-section (3A) of section 212], he may direct that such person shall, in addition to the amount of tax, if any, payable by him, pay by way of penalty a sum-

(i) which, in the case referred to in clause (a), shall not be less than ten per cent. but shall not exceed one and a half times the amount by which the tax actually paid during the financial year immediately preceding the assessment year under the provisions of Chapter XVII-C falls short of-

(1) seventy-five per cent of the assessed tax as defined in sub-section (5) of section 215, or

⁷[(2) where a statement under clause (a) of sub-section (1) of section 209A was furnished by the assessee or where a notice under section 210 was issued to the assessee, the amount payable under such statement or, as the case may be, such notice,] whichever is less;

²[(ia) which, in the case referred to in clause (aa), shall not be less than ten per cent. but shall not exceed one and a half times the amount by which the tax actually paid during the financial year immediately preceding the assessment year under the provisions of Chapter XVII-C falls short of seventy-five per cent. of the assessed tax as defined in sub-section (5) of section 215;]

(ii) which, in the case referred to in clause (b), shall not be less than ten per cent. but shall not exceed one and a half times of seventy-five per cent of the assessed tax as defined in sub-section (5) of section 215; and

¹[(iii) which, in the case referred to in clause (c), shall not be less than ten per cent. but shall not exceed one and a half times the amount by which-

(a) where the assessee has sent a statement under clause (a), or an estimate under clause (b) of sub-section (1) of section 209A, or an estimate in lieu of a statement under sub-section (2) of that section, the tax payable in accordance with such statement or estimate; or

(b) where the assessee was required to pay advance tax in accordance with the notice issued to him under section 210, the tax payable under such notice, falls short of seventy-five per cent. of the assessed tax as defined in sub-section (5) of section 215:]]

²[Provided that in the case of an assessee, being a company, the provisions of this sub-section shall have effect as if for the words "seventy-five per cent.", wherever they occur, the words "eighty-three and one-third per cent." had been substituted.]

³[Explanation ⁴[1].-For the purposes of clause (ia), the amount paid by the assessee on or before the date extended by the ⁵[⁶[Principal Chief Commissioner or Chief Commissioner] or ⁷[Principal Commissioner or Commissioner]] under the ⁸[ ⁹[first proviso] to sub-section (4) of section 209A or, as the case may be, ⁹[first proviso] to sub-section (3A) of section 212] shall, where the date so extended falls beyond the financial year immediately preceding the assessment year, also be regarded as tax actually paid during that financial year.]

¹⁰[Explanation 2.-When the person liable to penalty is a registered firm or an unregistered firm which has been assessed under clause (b) of section 183, then, notwithstanding anything contained in the other provisions of this Act, the penalty imposable under this section shall be the same amount as would be imposable on that firm if that firm were an unregistered firm.]

1¹[(3) The provisions of this section shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.]

1. Subs. by Act 14 of 1969, s. 22, for section 273 (w.e.f. 1-4-1970).

2. Ins. by Act 19 of 1978, s. 31 (w.e.f. 1-6-1978).

3. Subs. by Act 4 of 1988, s. 2, for "Income-tax Officer" (w.e.f. 1-4-1988).

4. The words ", without reasonable cause," omitted by Act 46 of 1986, s. 25 (w.e.f. 10-9-1986).

5. Ins. by Act 44 of 1980, s. 33 (w.e.f. 1-9-1980).

6. Section 273 renumbered as sub-section (2) thereof by Act 19 of 1978, s. 31 (w.e.f. 1-6-1978).

1. Subs. by Act 19 of 1978, s. 31, for clause (a) (w.e.f. 1-6-1978).

2. Ins. by Act 29 of 1977, s. 27 (w.e.f. 1-9-1977).

3. Ins. by Act 19 of 1978, s. 31 (w.e.f. 1-6-1978).

4. The words ", without reasonable cause," omitted by Act 46 of 1986, s. 25 (w.e.f. 10-9-1986).

5. Subs. by Act 19 of 1978, s. 31, for "sub-section (3) of section 212" (w.e.f. 1-6-1978).

6. Subs. by s. 31, ibid., for "sub-section (3A) of section 212" (w.e.f. 1-6-1978).

7. Subs. by s. 31, ibid., for sub-clause (2) (w.e.f. 1-6-1978).

1. Subs. by Act 19 of 1978, s. 31, for clause (iii) (w.e.f. 1-6-1978).

2. Ins. by Act 44 of 1980, s. 33 (w.e.f. 1-9-1980).

3. Ins. by Act 29 of 1977, s. 27 (w.e.f. 1-9-1977).

4. The Explanation numbered as Explanation 1 by Act 67 of 1984, s. 49 (w.e.f. 1-4-1985).

5. Subs. by Act 4 of 1988, s. 2, for "Commissioner" (w.e.f. 1-4-1988).

6. Subs. by Act 25 of 2014, s. 4, for "Chief Commissioner" (w.e.f. 1-6-2013).

7. Subs. by s. 4, ibid., for "Commissioner" (w.e.f. 1-6-2013).

8. Subs. by Act 19 of 1978, s. 31, for "proviso to sub-section (3A) of section 212" (w.e.f. 1-6-1978).

9. Subs. by Act 16 of 1981, s. 25, for "proviso" (w.e.f. 1-4-1981).

10. Ins. by Act 67 of 1984, s. 49 (w.e.f. 1-4-1985).

11. Ins. by Act 4 of 1988, s. 112 (w.e.f. 1-4-1989).

¹[273A. Power to reduce or waive penalty, etc., in certain cases.-

(1) Notwithstanding anything contained in this Act, the ²[3*** ⁴[Principal Commissioner or Commissioner]] may, in his discretion, whether on his own motion or otherwise,-

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(ii) reduce or waive the amount of penalty imposed or imposable on a person under ⁶[section 270A or] clause (iii) of sub-section (1) of section 271; [or] 7* * * * * if he is satisfied that such person-

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(b) in the case referred to in clause (ii), has, prior to the detection by the ⁹[Assessing Officer], of the concealment of particulars of income or of the inaccuracy of particulars furnished in respect of such income, voluntarily and in good faith, made full and true disclosure of such particulars, 10* * * * * and also has, 1¹[in the case referred to in clause (b)], co-operated in any enquiry relating to the assessment of his income and has either paid or made satisfactory arrangements for the payment of any tax or interest payable in consequence of an order passed under this Act in respect of the relevant assessment year.

Explanation. 12***-For the purposes of this sub-section, a person shall be deemed to have made full and true disclosure of his income or of the particulars relating thereto in any case where the excess of income assessed over the income returned is of such a nature as not to attract the provisions of ⁶[section 270A or] clause (c) of sub-section (1) of section 271.

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(2) Notwithstanding anything contained in sub-section (1),-

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(b) if in a case falling under ⁶[section 270A or] clause (c) of sub-section (1) of section 271, the amount of income in respect of which the penalty is imposed or imposable for the relevant assessment year, or, where such disclosure relates to more than one assessment year, the aggregate amount of such income for those years, exceeds a sum of five hundred thousand rupees, no order reducing or waiving the penalty under sub-section (1) shall be made by ¹[the ²[Principal Commissioner or Commissioner] except with the previous approval of the ³[Principal Chief Commissioner or Chief Commissioner] or ⁴[Principal Director General or Director General], as the case may be].

(3) Where an order has been made under sub-section (1) in favour of any person, whether such order relates to one or more assessment years, he shall not be entitled to any relief under this section in relation to any other assessment year at any time after the making of such order:

⁵[Provided that where an order has been made in favour of any person under sub-section (1) on or before the 24th day of July, 1991, such person shall be entitled to further relief only once in relation to other assessment year or years if he makes an application to the income-tax authority referred to in subsection (4) at any time before the 1st day of April, 1992.]

(4) Without prejudice to the powers conferred on him by any other provision of this Act, the ⁶[7*** ²[Principal Commissioner or Commissioner]] may, on an application made in this behalf by an assessee, and after recording his reasons for so doing, reduce or waive the amount of any penalty payable by the assessee under this Act or stay or compound any proceeding for the recovery of any such amount, if he is satisfied that-

(i) to do otherwise would cause genuine hardship to the assessee, having regard to the circumstances of the case; and

(ii) the assessee has co-operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him:

⁸[Provided that where the amount of any penalty payable under this Act or, where such application relates to more than one penalty, the aggregate amount of such penalties exceeds one hundred thousand rupees, no order reducing or waiving the amount or compounding any proceeding for its recovery under this sub-section shall be made by ¹[the ²[Principal Commissioner or Commissioner] except with the previous approval of the ³[Principal Chief Commissioner or Chief Commissioner] or ⁴[Principal Director General or Director General], as the case may be].]

⁹[(4A) The order under sub-section (4), either accepting or rejecting the application in full or in part, shall be passed within a period of twelve months from the end of the month in which the application under the said sub-section is received by the Principal Commissioner or the Commissioner:

Provided that no order rejecting the application, either in full or in part, shall be passed unless the assessee has been given an opportunity of being heard:

Provided further that where any application is pending as on the 1st day of June, 2016, the order shall be passed on or before the 31st day of May, 2017.]

(5) Every order made under this section shall be final and shall not be called into question by any court or any other authority.]

¹[(6) The provisions of this section ²[as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1989] shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.]

³[(7) Notwithstanding anything contained in sub-section (6), the provisions of sub-section (1), subsection (2), or, as the case may be, sub-section (4) [as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1989 (3 of 1989)], shall apply in the case of reduction or waiver of penalty or interest in relation to any assessment for the assessment year commencing on the 1st day of April, 1988 or any earlier assessment year, with the modifications that the power under the said subsection (1) shall be exercisable only by the ⁴[Principal Commissioner or Commissioner] and instead of the previous approval of the Board, the ⁴[Principal Commissioner or Commissioner] shall obtain the previous approval of the ⁵[Principal Chief Commissioner or Chief Commissioner] or ⁶[Principal Director General or Director General], as the case may be, while dealing with such case.]

1. Ins. by Act 41 of 1975, s. 64 (w.e.f. 1-10-1975).

2. Subs. by Act 4 of 1988, s. 2, for "Commissioner" (w.e.f. 1-4-1988).

3. The words "Chief Commissioner or" omitted by Act 38 of 1993, s. 36 (w.e.f. 1-6-1993).

4. Subs. by Act 25 of 2014, s. 4, for "Commissioner" (w.r.e.f. 1-6-2013).

5. Clause (i) omitted by Act 3 of 1989, s. 51 (w.e.f. 1-4-1989).

6. Ins. by Act 28 of 2016, s. 106 (w.e.f. 1-4-2017).

7. Clause (iii) omitted by Act 3 of 1989, s. 51 (w.e.f. 1-4-1989).

8. Clause (a) omitted by s. 51, ibid. (w.e.f. 1-4-1989).

9. Subs. by Act 4 of 1988, s. 2, for "Income-tax Officer" (w.e.f. (1-4-1988).

10. Clause (c) omitted by Act 3 of 1989, s. 51 (w.e.f. 1-4-1989).

11. Subs. by s. 51, ibid., for "in all the cases referred to in clauses (a), (b) and (c)" (w.e.f. 1-4-1989).

12. Explanation 2 omitted by Act 32 of 1985, s. 34 (w.e.f. 24-5-1985). . Earlier "1" and Explanation 2 was ins. By Act 67 of 1984, s. 50 (w.e.f. 1-10-1984).

13. Clause (a) omitted by Act 3 of 1989, s. 51 (w.e.f. 1-4-1989). Earlier clause (a) was amended by Act 67 of 1984, s. 50 (w.e.f. 1-10-1984).

1. Subs. by Act 38 of 1993, s. 36, for "the Chief Commissioner or Commissioner except with the previous approval of the Board" (w.e.f. 1-6-1993). Earlier the words "Chief Commissioner or Commissioner" were substituted by Act 4 of 1988, s. 2, for "Commissioner" (w.e.f. 1-4-1988).

2. Subs. by Act 25 of 2014, s. 4, for "Commissioner" (w.r.e.f. 1-6-2013).

3. Subs. by s. 4, ibid., for "Chief Commissioner" (w.r.e.f. 1-6-2013).

4. Subs. by s. 4, ibid., for "Director General" (w.r.e.f. 1-6-2013).

5. Ins. by Act 49 of 1991, s. 69 (w.e.f. 27-9-1991).

6. Subs. by Act 4 of 1988, s. 2, for "Commissioner" (w.e.f. 1-4-1988).

7. The words "Chief Commissioner or" omitted by Act 38 of 1993, s. 36 (w.e.f. 1-6-1993).

8. The proviso added by Act 67 of 1984, s. 50 (w.e.f. 1-10-1984).

9. Ins. by Act 28 of 2016, s. 106 (w.e.f. 1-6-2016).

1. Ins. by Act 4 of 1988, s. 113 (w.e.f. 1-4-1989).

2. Ins. by Act 3 of 1989, s. 51 (w.e.f. 1-4-1989).

3. Ins. by Act 32 of 1994, s. 48 (w.e.f. -6-1994).

4. Subs. by Act 25 of 2014, s. 4, for "Commissioner" (w.r.e.f. 1-6-2013).

5. Subs. by s. 4, ibid., for "Chief Commissioner" (w.r.e.f. 1-6-2013).

6. Subs. by s. 4, ibid., for "Director General" (w.r.e.f. 1-6-2013).

⁷[273AA. Power of ⁴[Principal Commissioner or Commissioner] to grant immunity from penalty.-

(1) A person may make an application to the ⁴[Principal Commissioner or Commissioner] for granting immunity from penalty, if-

(a) he has made an application for settlement under section 245C and the proceedings for settlement have abated under section 245HA; and

(b) the penalty proceedings have been initiated under this Act.

(2) The application to the ⁴[Principal Commissioner or Commissioner] under sub-section (1) shall not be made after the imposition of penalty after abatement.

(3) The ⁴[Principal Commissioner or Commissioner] may, subject to such conditions as he may think fit to impose, grant to the person immunity from the imposition of any penalty under this Act, if he is satisfied that the person has, after the abatement, co-operated with the income-tax authority in the proceedings before him and has made a full and true disclosure of his income and the manner in which such income has been derived.

⁸[(3A) The order under sub-section (3), either accepting or rejecting the application in full or in part, shall be passed within a period of twelve months from the end of the month in which the application under the said sub-section is received by the Principal Commissioner or the Commissioner:

Provided that no order rejecting the application, either in full or in part, shall be passed unless the assessee has been given an opportunity of being heard:

Provided further that where any application is pending as on the 1st day of June, 2016, the order shall be passed on or before the 31st day of May, 2017.]

(4) The immunity granted to a person under sub-section (3) shall stand withdrawn, if such person fails to comply with any condition subject to which the immunity was granted and thereupon the provisions of this Act shall apply as if such immunity had not been granted.

(5) The immunity granted to a person under sub-section (3) may, at any time, be withdrawn by the ⁴[Principal Commissioner or Commissioner], if he is satisfied that such person had, in the course of any proceedings, after abatement, concealed any particulars material to the assessment from the income-tax authority or had given false evidence, and thereupon such person shall become liable to the imposition of any penalty under this Act to which such person would have been liable, had not such immunity been granted.]

4. Subs. by Act 25 of 2014, s. 4, for "Commissioner" (w.r.e.f. 1-6-2013).

7. Ins. by Act 18 of 2008, s. 53, (w.e.f. 1-4-2008).

8. Ins. by Act 28 of 2016, s. 107 (w.e.f. 1-6-2016).

¹[273B. Penalty not to be imposed in certain cases.-

Notwithstanding anything contained in the provisions of ²[clause (b) of sub-section (1) of] ³[section 271, section 271A ⁴[, section 271AA], section 271B, ⁴[section 271BA], ⁵[section 271BB,] ⁶[section 271C, section 271CA], section 271D, section 271E, ⁷[section 271F, ⁸[section 271FA, ⁹[section 271FAB, section 271FB, section 271G, section 271GA], ¹⁰[section 271GB,] 1¹[section 271H,] 1²[section 271-I,] 1³[section 271J,] clause (c) or clause (d) of subsection (1) or sub-section (2) of section 272A, sub-section (1) of section 272AA] or 1⁴[1⁵[section 272B or] 1⁶[sub-section (1) or sub-section (1A) of 1⁷[section 272BB] or] sub-section (1) of section 272BBB or] clause (b) of sub-section (1) or clause (b) or clause (c) of sub-section (2) of section 273, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure.]

1. Ins. by Act 46 of 1986, s. 26 (w.e.f. 10-9-1986).

2. Ins. by Act 3 of 1989, s. 57 (w.e.f. 1-4-1989).

3. Subs. by Act 4 of 1988, s. 114 for "section 270, clause (a) and clause (b) of sub-section (1) of section 271, section 271A, section 271B, sub-section (2), of section 272A, sub-section (1) of section 272AA, sub-section (1) of section 272B" (w.e.f. 1-4-1989).

4. Ins. by Act 14 of 2001, s. 94 (w.e.f. 1-4-2002).

5. Ins. by Act 12 of 1990, s. 50 (w.e.f. 1-4-1990).

6. Subs. by Act 21 of 2006, s. 55, for "section 271C" (w.e.f. 1-4-2007).

7. Subs. by Act 23 of 2004, s. 59, for "section 271F" (w.e.f. 1-4-2005). Earlier the quoted words were inserted by 26 of 1997, s. 55 (w.e.f. 1-4-1997).

8. Subs by Act 18 of 2005, s. 61, for "section 271FA" (w.e.f. 1-4-2006).

9. Subs. by Act 20 of 2015, s. 77, for "section 271FB, section 271G" (w.e.f. 1-4-2016). Earlier "section 271G" inserted by Act 14 of 2001, s. 94 (w.e.f. 1-4-2002).

10. Ins. by Act 28 of 2016, s. 108 (w.e.f. 1-4-2017).

11. Ins. by Act 23 of 2012, s. 105 (w.e.f. 1-7-2012).

12. Ins. by Act 20 of 2015, s. 77 (w.e.f. 1-6-2015).

13. Ins. by Act 7 of 2017, s. 88 (w.e.f. 1-4-2017).

14. Subs. by Act 11 of 1987, s. 69, for "section 272B or" (w.e.f. 1-4-1987).

15. Ins. by Act 20 of 2002, s. 106 (w.e.f. 1-6-2002).

16. Subs. by Act 21 of 2006, s. 55 for "sub-section (1) of section 272BB" (w.e.f. 1-6-2006).

17. Subs. by Act 20 of 2002, s. 106 for "section 272BB or" (w.e.f. 1-6-2002)

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