Amended and updated notes on section 271AAE of Income Tax Act 1961 as inserted by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to benefits to related persons.
Chapter XXI (Sections 270A to 275) of the Income Tax Act 1961 deals with the provisions related to penalties imposable. Section 271AAE of IT Act 1961 provides for Benefits to related persons.
Recently, we have discussed in detail section 271AAD (Penalty for false entry in books of account) of IT Act 1961.
Today, we learn the provisions of section 271AAE of Income-tax Act 1961 as amended by the Finance Act 2022. The amended provision of section 271AAE is effective for financial year 2022-23 relevant to the assessment year 2023-24.
In this article, you will learn detail of the provisions of section 271AAE of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962 as provided by Ministry of Law and Justice, Government of India.
Section-271AAE: Benefits to related persons
[Section 271AAE newly inserted w.e.f. 1-April-2023 by the Finance Act 2022]
Without prejudice to any other provision of this Chapter, if during any proceedings under this Act, it is found that a person, being any fund or institution referred to in sub-clause (iv) or any trust or institution referred to in sub-clause (v) or any university or other educational institution referred to in sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (via) of clause (23C) of section 10, or any trust or institution referred to in section 11 has violated the provisions of the twenty-first proviso to clause (23C) of section 10, or clause (c) of sub-section (1) of section 13, as the case may be, the Assessing Officer may direct that such person shall pay by way of penalty—
(a) a sum equal to the aggregate amount of income applied, directly or indirectly, by such person, for the benefit of any person referred to in sub-section (3) of section 13, where the violation is noticed for the first time during any previous year; and
(b) a sum equal to two hundred per cent. of the aggregate amount of income of such person applied, directly or indirectly, by that person, for the benefit of any person referred to in sub-section (3) of section 13, where violation is noticed again in any subsequent previous year.