Section 272A of ITA, 1961 : Section 272A: Penalty For Failure To Answer Questions, Sign Statements, Furnish Information, Returns Or Statements, Allow Inspections, Etc

Explanation using Example

Imagine a business owner, Mr. Sharma, who has been issued a notice by the Income Tax Department to provide certain documents and information relevant to his tax assessment. The notice requires him to appear in person at the tax office with the documents on a specified date.

However, Mr. Sharma decides to ignore the notice and neither attends the meeting nor provides the requested documents. By doing so, he has failed to comply with the summons issued under Section 131(1) of the Income Tax Act, as outlined in Section 272A(1)(c).

As a result, the Income Tax Authority may impose a penalty on Mr. Sharma for his non-compliance. According to Section 272A(1), Mr. Sharma would be liable to pay a penalty of ten thousand rupees for this default.