Circular No. 204/1976 — Reasonable cause — guidelines for non-levy of penalty
Date: 1976-01-01 Status: ACTIVE Category: Penalties Binding on Department: Yes (Section 119 / Section 400 IT Act 2025)
Summary
Guidelines on what constitutes ‘reasonable cause’ for non-levy of penalty for concealment. If assessee’s explanation is bona fide and all facts disclosed, penalty should not be levied.
Key Directions
- If assessee’s explanation is bona fide and all facts have been disclosed, penalty should not be levied.
- Difference of opinion on legal interpretation is not concealment.
- Reliance on professional advice constitutes reasonable cause if advice was obtained in good faith.
Applicability Under IT Act 2025
Saving Clause: Section 536 of IT Act 2025 saves circulars issued under the 1961 Act “so far as not inconsistent” with the new Act.
| Old Section (1961 Act) | New Section (2025 Act) | Consistent? |
|---|---|---|
| 271(1)(c) | 345 | Yes |
Cross-References
Act Sections
Related Circulars
- None identified
Key Case Law (Circular Supremacy)
- To be populated — cases where this circular was cited/applied
Full Text
Full text to be added — see raw/circulars/ for PDF when available
Source
- Official: incometaxindia.gov.in/circulars