Finance Act 2020 has inserted a new section 271AAD, under which penalty shall be levied on a person who is required to maintain books of account, if it is found that the books contain a false entry or that any entry has been omitted which is relevant for the computation of his total income.
Such person shall be liable to pay by way of penalty a sum equal to the aggregate amount of such false and omitted entries.
Penalty shall also be levied on any other person who causes the person required to maintain books of account to make or causes to make any false entry or omit or cause to omit any entry in books of account.
The false entries shall include use or intention to use:
- forged or falsified documents such as a false invoice or, in general, a false piece of documentary evidence; or
- 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
- invoice in respect of supply or receipt of goods or services or both to or from a person who does not exist.
This amendment will take effect from 1st April, 2020.