Compliance with provisions of Sec.44AA. - Income Tax - 1872/1990

INSTRUCTION NO. 1872/1990 Dated: December 27, 1990 Section 44AA of the Income-tax Act, 1961 relates to maintenance of accounts by certain persons carrying on profession or business. Failure to comply with the requirements of section 44AA is punishable by a penalty under section 271A which shall not be less than two thousand rupees, but which may extend to one hundred thousand rupees. 2. A number of assessee falling within the purview of section 44AA are not maintaining any books of account, and their returns are being accepted or their incomes are being computed on estimate basis. It has been the experience of the department that no penalty proceedings u/s 271A are being initiated against them for non-compliance of the requirements of this section. 3. It is hereby emphasized that the provisions of section 44AA of the Income-tax Act are mandatory and should be strictly followed. The Assessing Officers should take care to initiate penalty proceedings under section 271A of the Income-tax Act wherever it is noticed that the assessee has not complied with the provisions of section 44AA. 4. Compliance of these provisions should also be checked by the supervisory officers at the time of inspection. The Internal Audit wing should also keep these provisions in view while conducting the audit. 5. This may be brought to the notice of all officers working in your charge.