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Provide examples of mis reporting and under reporting of income

Abhishek M (not) (68 Points)

07 March 2020

Can you please provide some examples to explain what Under Reporting of Income means? Can you please also provide some examples to explain what Mis Reporting of Income means? These two terminologies named Mis Reporting of Income, Under reporting of Income are referred when section 270 A is discussed.

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4 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (176768 Points)
Replied 08 March 2020

As per sub-Section (2), in following cases a person shall be considered to have under-reported his income:

In case of normal assessment

(i) The income assessed is greater than the income determined in the return processed under clause (a) of sub-Section (1) of section 143;

(ii) Where no return of income has been furnished, the income assessed is greater than the maximum amount not chargeable to tax;

In case of reassessment

(iii) The income reassessed is greater than the income assessed or reassessed immediately before such re-assessment;

In case where income is assessed under 115JB/ 115JC.[MAT/AMT]

(iv) The amount of deemed total income assessed or reassessed as per MAT/AMT is greater than the deemed total income determined u/s.143(1)(a)

(v) Where no return of income has been filed, the amount of deemed total income assessed as per MAT/AMT is greater than the maximum amount not chargeable to tax,;

(vi) The amount of deemed total income reassessed as per the provisions of section MAT/AMT is greater than the deemed total income assessed or reassessed immediately before such reassessment. [This provision was not there in the Finance Bill.]

In case where returned loss is reduced or converted into income

(vii) The income assessed or reassessed has the effect of reducing the loss or converting such loss into income.

The cases of Misreporting are as under:

a) Misrepresentation or suppression of facts;

b) Failure to record investments in the books of account;

c) Claim of expenditure not substantiated by any evidence;

d) Recording of any false entry in the books of account;

e) Failure to record any receipt in books of account having a bearing on total income; and

f) Failure to report any international transaction or any transaction deemed to be an international transaction or any specified domestic transaction, to which the provisions of Chapter X apply.

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Abhishek M (not) (68 Points)
Replied 10 March 2020

At what condition will it be mis reporting or under reporting of income If tax was not paid on certain income in a financial year and the ITR was not filed in that financial year also? Is this mis reporting of income or under reporting of income?

Thanks

Pramod Limaye (Chartered Accountant) (172 Points)
Replied 10 March 2020

It is neither under-reporting nor mis-reporting. Filing ITR is the way to report an income. If you have not filed ITR, then you have not reported income itself.

Abhishek M (not) (68 Points)
Replied 11 March 2020

How much fine will then be levied then, if it is surrendered to the IT department that certain amount of tax was not paid and the ITR was not filed for a financial year? Mean desire to pay the remaining tax and one the income will be shown to the IT department.