Income Tax Act

Official PDF pages 531–535

SOURCE PDF PAGE 531
( c )   fails to get his accounts audited for any tax year or years and furnish the
report of such audit as required under section 63, he shall be liable to pay
by way of fee,––
( i )   a sum of   `   75000 for a delay up to one month for which such failure
continues; and
( ii )   a sum of   `   150000 thereafter;
( d )   fails to furnish a report from an accountant as required by section 172, he
shall be liable to pay by way of fee,––
( i )   a sum of   `   50000 for a delay up to one month for which such failure
continues; and
( ii )   a sum of   `   100000 thereafter. ]
Fee for default relating to statement or certificate.
429.   (1) Without prejudice to the provisions of this Act, where,—
( a )   the research association, University, college or other institution referred
to in section 45(3)( a ) or the company referred to in section 45(3)( b ) fails
to deliver or cause to be delivered the documents as may be prescribed in
section 45(4)( a ) within the time as may be prescribed therein or furnish
a certificate as may be prescribed under section 45(4)( a ); or
( b )   the institution or fund fails to deliver or cause to be delivered a statement
under section 354(1)( e ), within the time as may be prescribed under
that section, or furnish a certificate as may be prescribed under section
354(1)( g ),
it shall be liable to pay, by way of fee, a sum of   `   200 for every day during which
the failure continues.
(2) The amount of fee referred to in sub-section (1) shall,—
( a )   not exceed the amount in respect of which the failure referred to therein
has occurred;
( b )   be paid before delivering or causing to be delivered the statement or
before furnishing the certificate referred to in sub-section (1).
Fee for default relating to intimation of Aadhaar number.
430.   Without prejudice to the provisions of this Act, where a person is required to
intimate his Aadhaar number under section 262(6) and such person fails to
do so on or before such date as may be prescribed, he shall be liable to pay such
fee, as may be prescribed, not exceeding   `   1000, at the time of making intimation
under the said section after the said date.
CHAPTER XX
REFUNDS
Refunds.
431.   If any person satisfies the Assessing Officer that the amount of tax paid by him
or on his behalf or treated as paid by him or on his behalf for any tax year

──────────

SOURCE PDF PAGE 532
exceeds the amount with which he is properly chargeable under this Act for that
year, he shall be entitled to a refund of the excess.
Person entitled to claim refund in certain special cases.
432.   (1) Where the income of one person is included in total income of any other
person under any provision of this Act, the latter alone shall be eligible for
a refund under this Chapter in respect of such income.
(2) Where a person is unable to claim or receive a refund due to him, on account of
death, incapacity, insolvency, liquidation or other cause, his legal representative or
the trustee or guardian or receiver, shall be entitled to claim or receive such refund
for the benefit of such person or his estate.
Form of claim for refund and limitation.
433.   Every claim for refund under this Chapter shall be made by furnishing
return as per section 263.
Refund for denying liability to deduct tax in certain cases.
434.   (1) Where,—
( a )   under an agreement or other arrangement, in writing, the tax deductible
on any income, other than interest in section 393(2) (Table: Sl. No. 17),
is to be borne by the person by whom the income is payable; and
( b )   such person having paid such tax to the credit of the Central Government
claims that no tax was required to be deducted on such income,
he may, within thirty days from the date of payment of such tax, file an application
before the Assessing Officer for refund of such tax in such form and such manner,
as may be prescribed.
(2) The Assessing Officer shall, by an order in writing, allow or reject the application
as referred to in sub-section (1).
(3) No application under sub-section (1) shall be rejected unless an opportunity of
being heard has been given to the applicant.
(4) The Assessing Officer may, before passing an order under sub-section (2), make
such inquiry as he considers necessary.
(5) The order under sub-section (2) shall be passed within six months from the end
of the month in which application under sub-section (1) is received.
Refund on appeal, etc.
435.   (1) Where, as a result of any order passed in appeal or other proceeding
under this Act, refund of any amount becomes due to the assessee, the As -
sessing Officer shall, except as otherwise provided in this Act, refund the amount
to the assessee without his having to make any claim in that behalf.
(2) Where, by the order as referred to in sub-section (1),—
( a )   an assessment is set aside or cancelled and an order of fresh assessment
is directed to be made, the refund, if any, shall become due only on the
making of such fresh assessment;

──────────

SOURCE PDF PAGE 533
( b )   the assessment is annulled, the refund shall become due only of the
amount, if any, of the tax paid in excess of the tax chargeable on the total
income returned by the assessee.
Correctness of assessment not to be questioned.
436.   In a claim under this Chapter, it shall not be open to the assessee to question
the correctness of any assessment, or other matter decided which has become
final and conclusive, or ask for a review of the aforesaid assessment or matter; and
the assessee shall not be entitled to any relief on such claim except refund of tax
wrongly paid or paid in excess.
Interest on refunds.
437 .   (1) Where a refund is due to the assessee under this Act, he shall, subject to
the provisions of this section, be entitled to receive, in addition to the re -
fund, simple interest thereon calculated at the rate of 0.5% for every month or part
of a month, in the circumstances specified in column B of the Table below, for the
period specified in column C of the said Table.
TABLE
Sl.
No.
Circumstances   Period
A   B   C
1.   Where the refund is out of tax
collected at source under section
394 or paid by way of advance tax
or treated as paid under section
390(5), during the financial year.
( a )   From the first day of April of the
year following the tax year to the
date on which the refund is granted,
where the return of income has
been furnished on or before the due
date as specified in section 263(1);
( b )   from the date of furnishing the
return of income to the date on
which the refund is granted; in any
other case.
2.   Where the refund is out of any tax
paid under section 266.
From the date of furnishing of return of
income or payment of tax, whichever is
later, to the date on which the refund is
granted.
3.   Any other case.   From the date or, as the case may be,
dates on and from which the amount of
tax or penalty specified in the notice of
demand issued under section 289   is paid
in excess of such demand to the date on
which the refund is granted.
(2) No interest shall be payable under sub-section (1) (Table: Sl. No. 1 or 2), if the
amount of refund is less than 10% of the tax as determined under section 270(1)or
on regular assessment.

──────────

SOURCE PDF PAGE 534
(3) Where refund, mentioned in sub-section (1) (Table: Sl. No. 1), arises as a result
of an order passed by the Assessing Officer in consequence of an application made
by the assessee under section 288(1) (Table: Sl. No. 11), interest shall be calculated
at the rate of 0.5% for every month or part of a month comprised in the period from
the date of such application to the date on which the refund is granted.
(4) In a case where a refund arises as a result of giving effect to an order under sec -
tion 359 or 363 or 365(10) or 368 or 377 or 378, wholly or partly, otherwise than by
making a fresh assessment or reassessment, the assessee shall be entitled to receive
an additional interest which shall be—
( a )   in addition to the interest payable under sub-section (1); and
( b )   computed on such amount of refund calculated at the rate of 3% per
annum, for the period beginning from the date following the date of
expiry of the time allowed under section 286(1) (Table: Sl. Nos. 9 and
10) to the date on which the refund is granted.
(5) For the purposes of sub-section (4), in a case where proceedings for assessment
or reassessment are pending, in computing the period for determining the addi -
tional interest payable, the period beginning from the date on which such refund is
withheld by the Assessing Officer as per and subject to provisions of section 438(3)
and ending with the date upto which such refund is withheld, shall be excluded.
(6) Where refund of any amount becomes due to the deductor in respect of any
amount paid to the credit of the Central Government under Chapter XIX-B, such
deductor shall be entitled to receive, in addition to the said amount, simple interest
thereon calculated at the rate of 0.5% for every month or part of a month comprised
in the period, from the date on which—
( a )   claim for refund is made in such form as may be prescribed; or
( b )   tax is paid, where refund arises on account of giving effect to an order
under section 359 or 363 or 365(10) or 368,
to the date on which the refund is granted.
(7) If the proceedings resulting in the refund are delayed for reasons attributable
to the assessee or the deductor, as the case may be, whether wholly or in part, the
period of the delay so attributable to him shall be excluded from the period for
which interest is payable under this section.
(8) Where any question arises as to the period to be excluded under sub-section (7),
it shall be decided by the Principal Chief Commissioner or Chief Commissioner or
Principal Commissioner or Commissioner whose decision thereon shall be final.
(9) Where, as a result of an order under section 270(10) or 271 or 279 or 287 or 288
or 359 or 363 or 365(10) or 368 or 377 or 378, the amount on which interest was
payable under sub-section (1) or (3) has been increased or reduced, as the case may
be, the interest shall be increased or reduced accordingly.
(10) In a case where the interest is reduced under sub-section (9), the Assessing
Officer shall serve on the assessee a notice of demand in such form as may be pre -
scribed specifying the amount of the excess interest paid and requiring him to pay
such amount.

──────────

SOURCE PDF PAGE 535
(11) The notice of demand under sub-section (10) shall be deemed to be a notice
under section 289 and the provisions of this Act shall apply accordingly.
Set off and withholding of refunds in certain cases.
438 .   (1) Where a refund becomes due or is found to be due to any person
under this Act, the Assessing Officer or Commissioner or Principal Commis -
sioner or Chief Commissioner or Principal Chief Commissioner, as the case may be,
may   in lieu   of payment of the refund, set off the amount to be refunded or any part
of that amount, against the sum, if any, remaining payable under  
4
[ the Income-tax
Act, 1961 (43 of 1961), or ]   this Act by such person.
(2) Any action under sub-section (1) shall be taken after giving an intimation in
writing to such person of the action proposed to be taken.
(3) Where,––
( a )   a part of the refund is set off under sub-section (1); or
( b )   no such amount as referred to in clause ( a ) is set off,
and refund becomes due to a person, and the Assessing Officer, having regard to
the fact that proceedings for assessment or reassessment are pending in the case
of such person, may, for reasons to be recorded in writing and with the previous
approval of the Principal Commissioner or the Commissioner, withhold the refund
up to sixty days from the date on which such assessment or reassessment is made.
CHAPTER XXI
PENALTIES
Penalty for under-reporting and misreporting of income.
439.   (1) The Competent Authority may, during the course of any proceedings
under this Act, impose penalty on any person who has under-reported his
income and such penalty shall be payable in addition to tax, if any.
(2) A person shall be deemed to have under-reported his income, if—
( a )   the income assessed is greater than the income determined in the return
processed under section 270(1)( a );
( b )   the income assessed is greater than the maximum amount not chargeable
to tax, where no return of income has been furnished or where return
has been furnished for the first time under section 280;
( c )   the income reassessed is greater than the income assessed or reassessed
immediately before such reassessment;
( d )   the amount of deemed total income assessed or reassessed as per section
206(1) and (2), is greater than the deemed total income determined in
the return processed under section 270(1)( a );
4.   Inserted by the Finance Act, 2026, w.e.f.   1-4-2026 .