Failure to keep or maintain books of account, documents, etc., as required under section 44AA, 271A
Failure to maintain books of accounts, documents etc.
SECTION 44 AA of the Income-Tax (I-T) Act seeks the maintenance of books of account by Assessee. The books include ledger, day book, cash book, account books and other books. If the books of accounts are not maintained, penalty under Section 271 A is leviable. The Finance Act has prescribed a flat penalty of Rs 25,000 for non-maintenance of books by Assessee. Earlier, the statute provided for a minimum penalty of Rs 2,000 and a maximum of Rs 1 lakh.
Section 44AA of Income Tax Act and rule 6F of Income Tax rules deal with the provisions regarding maintenance of books of accounts under Income tax Act. As per section 44AA(1) read with rule 6F the persons carrying on any of the profession as mentioned below are required to maintain books of accounts and other documents as may enable the assessing officer to compute his total income, if yearly gross receipts of the profession exceeded Rs 150000.
1) Legal
2) Medical
3) Architectural
4) Engineering
5) Accountancy
6) Technical consultancy
7) Interior decoration
8) Authorized representative
9) Film artist
Section | Nature of default | Minimum penalty | Maximum penalty |
(1) | (2) | (3) | (4) |
271A |
Failure to keep and maintain any such books of account and other documents as required under Section 44AA or rules made there under or to retain such books of account and other documents for the period specified under Income Tax Rules. |
A sum of Rs. 25,000/- |
A sum of Rs. 25,000/- |
10) Any other profession as is notified by the board.
Reference: Section 271A, 44AA of Income tax act, 1961
Failure to keep, maintain or retain books of account, documents, etc. under sec 271A
Without prejudice to the provisions of section 271, if any person fails to keep and maintain any such books of account and other documents as required by section 44AA or the rules made there under, in respect of any previous year or to retain such books of account and other documents for the period specified in the said rules, the [Assessing] Officer or the [Commissioner (Appeals)] may direct that such person shall pay, by way of penalty, [a sum of twenty-five thousand rupees.
Maintenance of accounts by certain persons carrying on profession or business under sec 44AA
(1) Every person carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or any other profession as is notified by the Board in the Official Gazette shall keep and maintain such books of account and other documents as may enable the [Assessing] Officer to compute his total income in accordance with the provisions of this Act.
(2) Every person carrying on business or profession [not being a profession referred to in sub-section (1)] shall,—
(i) if his income from business or profession exceeds one lakh twenty thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession exceed or exceeds [ten lakh] rupees in any one of the three years immediately preceding the previous year; or
(ii) where the business or profession is newly set up in any previous year, if his income from business or profession is likely to exceed one lakh twenty thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession are or is likely to exceed [ten lakh] rupees, during such previous year; or
(iii) where the profits and gains from the business are deemed to be the profits and gains of the assessee under [section 44AE] [or section 44BB or section 44BBB], as the case may be, and the assessee has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, during such [previous year; or]]
[(iv) where the profits and gains from the business are deemed to be the profits and gains of the assessee under section 44AD and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his business and his income exceeds the maximum amount which is not chargeable to income-tax during such previous year,]
Keep and maintain such books of account and other documents as may enable the [Assessing] Officer to compute his total income in accordance with the provisions of this Act.
(3) The Board may, having regard to the nature of the business or profession carried on by any class of persons, prescribe, by rules, the books of account and other documents (including inventories, wherever necessary) to be kept and maintained under sub-section (1) or sub-section (2), the particulars to be contained therein and the form and the manner in which and the place at which they shall be kept and maintained.
(4) Without prejudice to the provisions of sub-section (3), the Board may prescribe, by rules, the period for which the books of account and other documents to be kept and maintained under sub-section (1) or sub-section (2) shall be retained.]
.0pt;f�fm@ֱ���l”,”sans-serif”;color:black;mso-themecolor:text1′>that] in a case where such person is required by or under any other law to get his accounts audited, it shall be sufficient compliance with the provisions of this section if such person gets the accounts of such business or profession audited under such law before the specified date and [furnishes by] that date the report of the audit as required under such other law and a further report [by an accountant] in the form prescribed under this section.
Explanation.—For the purposes of this section,—
(i) “Accountant” shall have the same meaning as in the Explanation below sub-section (2) of section 288;
[(ii) “specified date”, in relation to the accounts of the assessee of the previous year relevant to an assessment year, means [the due date for furnishing the return of income under sub-section (1) of section 139].]]