Pay penalty for failing to keep books of accounts, say analysts

Experts say it has now become a standard practice to pay a fine instead of maintaining books of accounts and other documents.

The Pune Bench of the Income-Tax Appellate Tribunal recently confirmed the penalty imposed on a doctor under Section 271A of the Income-Tax (I-T) Act, 1961, for not maintaining books of accounts.  

Suresh Surana, founder, RSM India, says, “According to Section 271A of the I-T Act, if any person fails to maintain books of accounts and other documents for any financial year, as required by Section 44AA and Rule 6F, or retain them for seven financial years, tax authorities can direct him/her to pay penalty.”

Sections 44AA and 271A of the Act, are interconnected. The for­mer requires professionals and business perso­ns to maintain