Section 271AAD was introduced by Budget, 2020 wherein penalty was introduced for issuing fake invoices or omission of any entry.
The amount of penalty would be 100% of invoice value.
Now Budget, 2021 has amended section 281B and introduced attachment of property in cases where penalty is applicable u/s 271AAD of the Income tax act.
Thus, after the amendment if a person is charged with penalty u/s 271AAD in that case his property might be attached but there is a condition attached to the same which is as under:
Provisional attachment shall be applicable where penalty has been imposed under section 271AAD and where the amount or aggregate of amounts of penalty likely to be imposed under the said section exceeds two crore rupees.
Thus, attachment is applicable on issuing fake invoices only where amount of penalty is Rs. 2 crore or more and this would happen only when amount of invoice is Rs. 2 crore or more.
Hence, now if a person issues fake invoices he shall be liable for confiscation and penalty under GST, income tax and attachment under Income tax.
Now, the provisions of punishment for those issuing fake invoices is very strict.
The amendment provision of section 281B read as under:
“Where, during the pendency of any proceeding for the assessment of any income or for the assessment or reassessment of any income which has escaped assessment or for imposition of penalty under section 271AAD where the amount or aggregate of amounts of penalty likely to be imposed under the said section exceeds two crore rupees, the Assessing Officer is of the opinion that for the purpose of protecting the interests of the revenue it is necessary so to do, he may, with the previous approval of the Principal Chief Commissioner or Chief Commissioner, Principal Commissioner or Commissioner, Principal Director General or Director General or Principal Director or Director, by order in writing, attach provisionally any property belonging to the assessee in the manner provided in the Second Schedule.“