The Central Board of Direct Taxes (CBDT) notified the penalty under section 271AAD for false entry etc. in the books of accounts.
The CBDT has inserted section 271AAD in the Income Tax Act, 1961, which will be effective from 9 April, 2020.
As per 271AAD if during any proceeding, it is found that in the books of account maintained by any person there is a false entry, or an omission of any entry relevant for evading tax liability, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum equal to the aggregate amount of such false or omitted entry.
The Assessing Officer may also direct that any other person who causes to make a false entry or omits or causes to omit any entry, shall pay by way of penalty a sum equal to the aggregate amount of such false or omitted entry.
The section further explains that “false entry includes use or intention to use forged or falsified documents such as a false invoice or, in general, a false piece of documentary evidence; or by invoice in respect of supply or receipt of goods or services or both issued by the person or any other person without actual supply or receipt of such goods or services or both, or invoice in respect of supply or receipt of goods or services or both to or from a person who does not exist.
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