Section 271AAC of ITA, 1961 : Section 271Aac: Penalty In Respect Of Certain Income

Explanation using Example

Imagine a business owner, Mr. Sharma, has not recorded a cash loan of INR 10 lakhs in his company's books. During an audit, the Income Tax Department discovers this unaccounted cash and deems it to be income under Section 68 of the Income-tax Act, 1961, since Mr. Sharma cannot satisfactorily explain the source of the funds.

As per Section 271AAC, the Assessing Officer determines that Mr. Sharma must pay a penalty in addition to the tax due on...

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