Failure to keep, maintain or retain books of account, documents, etc.
[Section-441 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
A penalty of twenty-five thousand rupees shall be imposed on a person by the Assessing Officer or the Joint Commissioner (Appeals) or the Commissioner (Appeals), if he fails to—
(a) keep and maintain the books of account and other documents as per section 62 or the relevant rules, in respect of any tax year; or
(b) retain such books of account and other documents for the period specified in the said rules.
FAQs on Section 441 of Income Tax Act 2025
What is the penalty under Section 441 for failure to keep or retain books of account?
A penalty of ₹25,000 shall be imposed by the Assessing Officer, Joint Commissioner (Appeals), or Commissioner (Appeals) if a person fails to keep, maintain, or retain books of account and documents as required.
Who has the authority to impose the penalty under Section 441?
The penalty can be imposed by the Assessing Officer, the Joint Commissioner (Appeals), or the Commissioner (Appeals).
What obligations under Section 62 must be fulfilled to avoid penalty under Section 441?
A person must keep and maintain books of account and other documents as required under Section 62 or relevant rules for any tax year.
What happens if a person fails to retain books of account for the required period?
If a person does not retain the books of account and documents for the period specified in the relevant rules, they are liable for a penalty of ₹25,000 under Section 441.
Does Section 441 apply to all taxpayers or only specific categories?
Section 441 applies to any person who is required under Section 62 or rules to maintain and retain books of account and documents.
Is the penalty under Section 441 automatic or discretionary?
The penalty is not automatic. It is imposed at the discretion of the Assessing Officer or Appellate Authorities upon finding a failure to comply.
Can a person appeal against a penalty imposed under Section 441?
Yes, a person may appeal the penalty order as per the applicable appellate provisions under the Act.
What types of documents need to be maintained to comply with Section 62 and avoid penalty under Section 441?
The types of documents are prescribed under Section 62 and relevant rules and may include books of account, vouchers, invoices, and records pertaining to income and expenditure.
What is meant by “retaining” books of account under Section 441?
“Retaining” means preserving and keeping the books of account and documents for the period prescribed in the rules even after the tax year has ended.
Does the ₹25,000 penalty under Section 441 apply per tax year or in total?
The penalty applies in respect of any tax year in which the failure occurs, meaning it can be levied for each such year separately.
If books are partially maintained or retained, can Section 441 still apply?
Yes, partial compliance may still constitute a failure depending on the extent and significance of the omissions, leading to a penalty.
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