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Income tax · Order

Penalty order (Chapter XXI)

An order imposing a penalty after the show-cause stage. What to do: check that the show-cause stage was followed, then under Section 270A, consider the immunity application. Time to appeal: 30 days from the date of the order (or of its service, if it was communicated later); the date stated on your notice always wins.

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Key facts

An order imposing a penalty after the show-cause stage. Under Section 270A the penalty is 50% of the tax on the under-reported income, or 200% where it is a consequence of misreporting; under Section 271AAC it is 10% of the tax under Section 115BBE; under Section 272A it is ₹10,000 for each default or ₹500 for every day a failure continues. A notice of demand under Section 156 follows.

NoticePenalty order (Chapter XXI)
Issued byThe Income Tax Department (the authority named on the notice)
Issued underSection 270A / 271AAC / 272A r/w Section 274, Income-tax Act 1961
Income-tax Act 2025Section 439 / 443 / 465 r/w Section 471, Income-tax Act 2025
What it asks of youNo reply: it is an order. If you dispute it, the next step is an appeal
Your time to act30 days from the date of the order (or of its service, if it was communicated later); the date stated on your notice always wins.
If it is ignoredWithout an appeal the penalty stands and the demand is recoverable, with interest at 1% for every month or part of a month after the demand period (Section 220(2)).

Time allowed

Appeal: 30 days from the date of the order (or of its service, if it was communicated later). An order imposing a penalty under Chapter XXI is appealable (Section 246A(1)(q)); the appeal runs 30 days from service of the notice of demand relating to the penalty (Section 249(2)(b)). The date on the order is used here.

The date stated on your notice always wins.

More time: A late appeal may be admitted for sufficient cause (Section 249(3)).

What to do now

  1. Check that the show-cause stage was followed

    No penalty order can be made unless you were heard or given a reasonable opportunity by way of a show-cause notice (Section 274(1)). Note the date of the notice, your reply and whether the order deals with it.

  2. Under Section 270A, consider the immunity application

    An application under Section 270AA to the Assessing Officer within 1 month from the end of the month in which the assessment order was received, where the tax and interest were paid within the demand period and no appeal is filed (in misreporting cases, with additional income-tax of 100% of the tax on the under-reported income paid within the demand period).

  3. File the appeal to the JCIT(A) / CIT(A) in time

    Within 30 days of service of the notice of demand relating to the penalty (Section 249(2)(b)); the tax due on the returned income must have been paid (Section 249(4)).

  4. Pay the demand or apply for time

    The notice of demand under Section 156 is payable within 30 days of its service (Section 220(1)); an application before then may get time or instalments (Section 220(3)).

  5. Check the Document Identification Number (DIN)

    Every notice, order or letter should be referenced by a computer-generated DIN, in its body, in a covering document or in the covering e-mail (CBDT Circular 4/2026, which withdrew Circular 19/2019). A missing DIN is a point to raise with our expert team; by itself it does not invalidate an assessment that is referenced by a DIN in any manner (Section 292BA).

What an appeal contains

An appeal usually covers the points below. This is an outline, not a draft: our expert team writes it on your own records.

  1. Reference: the order's reference number and date, your PAN and the period it covers.
  2. The grounds on which you dispute the order, point by point, against the reply that was filed.
  3. Evidence for each point: the returns, books and documents each answer relies on.
  4. Where it is filed: as stated on the order.

If it is ignored

  • Without an appeal the penalty stands and the demand is recoverable, with interest at 1% for every month or part of a month after the demand period (Section 220(2)).
  • A second appeal to the Appellate Tribunal runs 2 months from the end of the month in which the CIT(A) / JCIT(A) order is communicated (Section 253(3)).

Official sources

Sources checked on 22 October 2026.

Frequently asked questions

What is an income-tax Penalty order?

An order imposing a penalty after the show-cause stage. Under Section 270A the penalty is 50% of the tax on the under-reported income, or 200% where it is a consequence of misreporting; under Section 271AAC it is 10% of the tax under Section 115BBE; under Section 272A it is ₹10,000 for each default or ₹500 for every day a failure continues. A notice of demand under Section 156 follows.

How much time do I have to act on an income-tax Penalty order?

Appeal: 30 days from the date of the order (or of its service, if it was communicated later). An order imposing a penalty under Chapter XXI is appealable (Section 246A(1)(q)); the appeal runs 30 days from service of the notice of demand relating to the penalty (Section 249(2)(b)). The date on the order is used here. The date stated on your notice always wins. A late appeal may be admitted for sufficient cause (Section 249(3)).

What happens if I ignore an income-tax Penalty order?

Without an appeal the penalty stands and the demand is recoverable, with interest at 1% for every month or part of a month after the demand period (Section 220(2)). A second appeal to the Appellate Tribunal runs 2 months from the end of the month in which the CIT(A) / JCIT(A) order is communicated (Section 253(3)).

Related guides

General information from the provisions this notice is issued under, not legal advice. The dates and periods stated on your notice always win. Our expert team can read the full notice with you.