SECTION 271J OF INCOME TAX ACT AGAINST A VALUER

UNDERSTANDING THE PROVISIONS OF SECTION 271J OF INCOME TAX ACT AGAINST A VALUER FOR PROVIDING INCORRECT INFORMATION

Without prejudice to the provisions of this Act, where the Assessing Officer or the Commissioner (Appeals), in the course of any proceedings under this Act, finds that an accountant or a merchant banker or a registered valuer has furnished incorrect information in any report or certificate furnished under any provision of this Act or the rules made thereunder, the Assessing Officer or the Commissioner (Appeals) may direct that such accountant or merchant banker or registered valuer, as the case may be, shall pay, by way of penalty, a sum of ten thousand rupees for each such report or certificate.

Explanation: For the purposes of this section,—

(a) “accountant” means an accountant referred to in the Explanation below sub-section (2) of section 288;

(b) “merchant banker” means Category I merchant banker registered with the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);

Under Income Tax, the assessee needs to provide various reports or certificate which are to be authorized by the professionals like accountant / merchant banker / registered valuer. In case any of the above mentioned professionals provides incorrect information (whether with malafide intention or not) in any of the report or certificate, the defaulter would be liable to pay the penalty under section 271J of the Income Tax Act.

Penalty under Section 271J

In case an accountant / a merchant banker / a registered valuer provides incorrect information in any report / certificate, then the Assessing Officer or the Commissioner (Appeals) may direct the defaulter to pay the penalty amounting to INR 10,000 for each such report / certificate under section 271J of the Income Tax Act.

271J. Penalty for furnishing incorrect information in reports or certificates.—Without prejudice to the provisions of this Act, where the Assessing Officer or the Commissioner (Appeals), in the course of any proceedings under this Act, finds that an accountant or a merchant banker or a registered valuer has furnished incorrect information in any report or certificate furnished under any provision of this Act or the rules made thereunder, the Assessing Officer or the Commissioner (Appeals) may direct that such accountant or merchant banker or registered valuer, as the case may be, shall pay, by way of penalty, a sum of ten thousand rupees for each such report or certificate.

Exemptions from Penalty

Provisions of section 273B of the Income Tax Act states that in case the defaulter proves that there was a reasonable cause for the failure. Hence, the penalty under this section would not be levied for minor or negligible mistakes made in the course of report preparation.