Section 444 — Penalty for False Entry in Books | ITA 2025

Section 444 of the Income-tax Act, 2025 corresponds to s. 271 AAD (FA 2020) of the Income-tax Act, 1961. STATUTORY ARCHITECTURE Penalty equal to aggregate amount of false entry or omitted entry. Targets fake invoices, sham transactions,…

Section 444 — - PENALTY FOR FALSE ENTRY IN BOOKS

Section 444 of the Income-tax Act, 2025 corresponds to s. 271AAD (FA 2020) of the Income-tax Act, 1961.

Statutory text — Income-tax Act, 2025

(1) The Assessing Officer or the Joint Commissioner (Appeals) or the C ommissioner (Appeals), may impose a penalty equal to the aggregate amount of false or omitted entry, where during any proceeding under this Act, it is found that in the books of account maintained by any person there is—

(a) a false entry; or

(b) an omission of any entry which is relevant for computation of total income of such person, to evade tax liability.

(2) Without prejudice to sub-section (1), the Assessing Officer or the Joint Commis- sioner (Appeals) or the Commissioner (Appeals) may impose a penalty equal to the aggregated amount of false or omitted entry, on any other person, who causes the person referred to in the said sub-section in any manner to make a false entry or omits or causes to omit any entry referred to in that sub-section.

(3) For the purposes of this section, the expression “false entry” includes use or intention to use—

(a) forged or falsified documents such as a false invoice or, in general, a false piece of documentary evidence; or

(b) invoice in respect of supply or receipt of goods or services or both issued by the person or any other person without actual supply or receipt of such goods or services, or both; or

(c) invoice in respect of supply or receipt of goods or services or both to or from a person who does not exist. Benefits to related persons.

STATUTORY ARCHITECTURE

Penalty equal to aggregate amount of false entry or omitted entry. Targets fake invoices, sham transactions, accommodation entries.

PRACTITIONER PLANNING NOTES

Onerous -- 100% penalty in addition to s. 439 200% misreporting and s. 472 prosecution.
Common targets: shell company entries, bogus purchase invoices, circular trades.
Defence: prove genuineness via PAN, TIN, bank trail, delivery evidence.

CROSS-REFERENCES

s. 439 (under-reporting or misreporting -- master penalty).
s. 440 (immunity application).
s. 469 or 470 (waiver or reasonable-cause).
s. 471 or 472 (procedure or limitation).

← All sections (537)Act 2025 hub

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
2025 provision	1961 counterpart
s. 444 -- Penalty for False Entry in Books	s. 271AAD (FA 2020)