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Under the Income-tax Act, 2025 as amended by the Finance Act, 2026, wilful failure to comply with which of these is the offence in section 481?

Question and options

Under the Income-tax Act, 2025 as amended by the Finance Act, 2026, wilful failure to comply with which of these is the offence in section 481?

  1. A notice under section 294(1)(a) to furnish a return of undisclosed income for the block period

  2. An Assessing Officer's direction under section 268(5) for special audit or inventory valuation

  3. A notice under section 268(1) to produce accounts that the Assessing Officer requires

  4. A requirement under section 262(9)(a) to quote a PAN in a document for a specified transaction

Answer and explanation

Correct answer: B - An Assessing Officer's direction under section 268(5) for special audit or inventory valuation

Section 481, as substituted by the Finance Act, 2026, punishes wilful failure to comply with a direction under section 268(5) for a special audit or inventory valuation with simple imprisonment up to six months, or fine, or both. Wilful failure to furnish a block return after a section 294 notice is dealt with by the substituted section 480, and failure to quote a PAN attracts a penalty under section 467, not prosecution.

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