Penalty for concealment — when to initiate and when to drop

Circular No. 387/1984 — Penalty for concealment — when to initiate and when to drop

Date: 1984-01-01 Status: ACTIVE Category: Penalties Binding on Department: Yes (Section 119 / Section 400 IT Act 2025)

Summary

Guidelines for initiation and dropping of penalty proceedings. AO must record specific finding of concealment before initiating penalty.

Key Directions

1. Penalty proceedings to be initiated only if there is a specific finding of concealment.
2. If additions are made on estimate basis or difference of opinion, penalty should not be initiated.
3. Penalty order must specify the limb under which penalty is levied.

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

• Section 271(1)(c)
• Section 345

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