Income Tax Act

Official PDF pages 546–550

SOURCE PDF PAGE 546
Penalty for failure to submit statement under section 505.
460.   If any person required to furnish statement under section 505, fails to do so
within the period prescribed under that section, the Assessing Officer may
impose on him, a penalty of—
( a )   `   1000 for every day for which the failure continues, if the period of
failure does not exceed three months; or
( b )   `   100000 in any other case.
Penalty for failure to furnish statements, etc.
461.   (1) Where a person, who is required to deliver or causes to be delivered a
statement prescribed in section 397(3)( b ),—
( a )   fails to do so within the time prescribed in the said section; or
( b )   furnishes incorrect information in the said statement,
the Assessing Officer may impose on such person, a penalty of a sum which shall
not be less than   `   10000 but which may extend to   `   100000.
(2) No penalty shall be levied under sub-section (1)( a ) for delay in filing or non-filing
of statement referred therein, if the person proves that—
( a )   tax deducted or collected along with the fee and interest, if any, was paid
to the credit of the Central Government; and
( b )   the said statement was also delivered or cause to be delivered before the
expiry of one month from the time prescribed in section 397(3)( b ).
Penalty for failure to furnish information or furnishing inaccurate information
under section 397(3)( d ).
462.   If any person, who is required to furnish information under section 397(3)( d ),
fails to furnish such information, or furnishes inaccurate information, the
Assessing Officer may impose a penalty of   `   100000 on such person.
Penalty for furnishing incorrect information in reports or certificates.
463.   (1) Any accountant or merchant banker or registered valuer, shall be liable to
pay a penalty of   `   10000 for any incorrect information in any report or certif -
icate furnished under any provision of this Act or the rules made thereunder.
(2) The penalty under sub-section (1)   shall be payable for each such report or cer -
tificate.
(3) The penalty under sub-section (1)   shall be payable on directions of the Assessing
Officer or the Joint Commissioner (Appeals) or the Commissioner (Appeals) where
the incorrect information mentioned in sub-section (1)   is found by such authority
in the course of any proceedings under this Act.
(4) In this section,—
( a )   “merchant banker” means Category I merchant banker registered with
the Securities and Exchange Board of India established under section
3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);
and

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SOURCE PDF PAGE 547
( b )   “registered valuer”   means a person registered as a valuer under section
514.
Penalty for failure to furnish statements, etc.
464.   The Assessing Officer may impose a penalty which shall not be less than   `   10000
but which may extend up to   `   100000 on—
( a )   the research association, university, college or other institution referred
to in section 45, if it fails to deliver or furnish the documents as may be
prescribed under section 45(4)( a ) ;   or
( b )   the institution or fund, if it fails to deliver or cause to be delivered a
statement within the time prescribed under section 354(1)( e ), or furnish
a certificate prescribed under section 354(1)( g ).
Penalty for failure to answer questions, sign statements, furnish information,
returns or statements, allow inspections, etc.
465.   (1) A person shall be liable to pay a penalty of   `   10000 for each default or
failure as mentioned below, if that person,—
( a )   being legally bound to state the truth of any matter touching the sub -
ject of his assessment, refuses to answer any question put to him by an
income-tax authority in the exercise of its powers under this Act; or
( b )   refuses to sign any statement made by him in the course of any proceed -
ings under this Act, which an income-tax authority may legally require
him to sign; or
( c )   to whom a summons is issued under section 246(1), either to attend to
give evidence or to produce books of account or other documents at a
certain place and time omits to attend or produce books of account or
documents at the place or time; or
( d )   fails to comply with a notice under section 268(1) or 270(8) or fails to
comply with a direction issued under section 268(5).
(2) A person shall be liable to pay a penalty of   `   500 for every day during which the
following failures continue, if that person fails to—
( a )   comply with a notice under section 175(7); or
( b )   give the notice of discontinuance of his business or profession as required
by section 320(3); or
( c )   furnish in due time any of the returns, statements or particulars men -
tioned in section 252 or 397(3) or 507; or
( d )   allow inspection of any register referred to in section 255 or of any entry
in such register or to allow copies of such register or of any entry therein
to be taken; or
( e )   furnish the return of income as required under section 263(1)( a )( iii ) or
( iv ) or to furnish it within the time allowed and, in the manner, required
under section 263(1) and (2); or

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SOURCE PDF PAGE 548
( f )   deliver or cause to be delivered in due time a copy of the declaration
required under section 393(7); or
( g )   furnish a certificate under section 395(4); or
( h )   deduct and pay tax under section 416(3); or
( i )   furnish a statement under section 392(5)( a ); or
( j )   deliver or cause to be delivered in due time a copy of the declaration
required under section 394(3); or
( k )   deliver or cause to be delivered the statement within the time specified
in section 397(3)( b ); or
( l )   deliver or cause to be delivered a statement within the time as may be
prescribed under section 397(3)( e ); or
( m )   deliver or cause to be delivered a statement within the time as may be
prescribed under section 397(3)( g )( i ).
(3) The amount of penalty shall not exceed the amount of tax deductible or collectible
for failures in relation to the following:—
( a )   a declaration required under section 393(7);
( b )   a certificate as required under section 395(4); and
( c )   statements under section 397(3)( b ) or ( e ).
(4) Any penalty imposable under sub-section (1) or (2) shall be imposed—
( a )   if the contravention, failure or default for which such penalty is imposable
occurs in the course of any proceeding before an income-tax authority
not below the rank of Joint Director or a Joint Commissioner, by such
income-tax authority;
( b )   in a case falling under sub-section (1)( d ) ,   by the income-tax authority
who had issued the notice or direction referred to therein;
( c )   in a case falling under sub-section (2)( f ) ,   by the Principal Chief Commis -
sioner or Chief Commissioner or Principal Commissioner or Commis -
sioner; and
( d )   in any other case, by the Joint Director or the Joint Commissioner.
(5) In this section, “income-tax authority” includes a Principal Director General or
Director General, Principal Director or Director, Joint Director and an Assistant
Director or Deputy Director while exercising the powers vested in a court under
the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect of the
matters specified in section 246(1).
Penalty for failure to comply with the provisions of section 254.
466.   If a person fails to comply with the provisions of section 254, the Joint
Commissioner, Deputy Director or Assistant Director or the Assessing Officer,
may impose a penalty which may extend up to   `  
13
[ 25000 ]   on him.
13.   Substituted for “1000” by the Finance Act, 2026, w.e.f.   1-4-2026 .

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SOURCE PDF PAGE 549
Penalty for failure to comply with the provisions of  
14
[ sections 262 and 397 ].
467.   (1) If a person fails to comply with the provisions of section 262, the
Assessing Officer may impose a penalty of   `   10000 on him.
(2) If a person, required to quote or intimate his Permanent Account Number or
Aadhaar number in any document as referred to in section 262(9)( a ), provides or
quotes or intimates a number which is false, knowing or believing it to be false, the
Assessing Officer may impose a penalty of   `   10000 on him for each such default.
(3) If a person fails to quote or authenticate his Permanent Account Number or
Aadhaar number in any document referred to in section 262(9)( a ), the Assessing
Officer may impose a penalty of   `   10000 on him for each such default.
(4) If a person referred to in section 262(9)( b ) responsible for ensuring the correct
quoting or authentication of Permanent Account Number or Aadhaar number, in
documents relating to transactions prescribed under section 262(9)( a ) fails to do so,
the Assessing Officer may impose a penalty of   `   10000 on him for each such default.
Penalty for failure to comply with the provisions of section 397.
468.   (1) If a person fails to comply with the provisions of section 397, the Assessing
Officer may impose a penalty of   `   10000 on him.
(2) If a person, required to quote his Tax Deduction and Collection Account Num -
ber in challans, certificates, statements or other documents referred to in section
397(1)( b ), quotes a number which is false, knowing or believing it to be false or not
true, the Assessing Officer may impose a penalty of   `   10000 on him.
Power to reduce or waive penalty, etc., in certain cases.
469.   (1) Irrespective of anything contained in this Act, the Principal Commissioner
or Commissioner may, whether on his own motion or otherwise, at his dis -
cretion reduce or waive the penalty imposed or imposable under section 439 if he
is satisfied that such person,––
( a )   before the Assessing Officer detected any concealment of particulars of
income or of the inaccuracy of particulars furnished in respect of such
income, has made a full and true disclosure of such particulars voluntarily
and in good faith; and
( b )   has cooperated in any enquiry relating to the assessment of his income
and has paid or made satisfactory arrangements to pay any tax or interest
payable in consequence of an order passed under this Act in respect of
the relevant tax year.
(2) For the purposes of sub-section (1), a person shall be deemed to have made
full and true disclosure of his income or of the particulars relating thereto if the
difference between the assessed and returned income does not attract penalties
under section 439.
(3) Irrespective of anything contained in sub-section (1) or (2), if in a case falling
under section 439, the amount of income in respect of which the penalty is imposed
or imposable for the relevant tax year or where such disclosure relates to more than
14.   Substituted for “section 262” by the Finance Act, 2026, w.e.f.   1-4-2026 .

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SOURCE PDF PAGE 550
one tax year, and aggregate amount of such income or disclosure thereof for such
years exceeds   `   500000, the Principal Commissioner or Commissioner shall obtain
prior approval from the Principal Chief Commissioner or Chief Commissioner or
Principal Director General or Director General, as the case may be, before waiving
or reducing the penalty by order referred to in sub-section (1).
(4) Where an order has been made under sub-section (1) in favour of any person,
whether such order relates to one or more tax years, he shall not be entitled to
any relief under this section in relation to any other tax year at any time after the
making of such order.
(5) The Principal Commissioner or Commissioner may, upon an application from
the assessee, and after recording his reasons for doing so, reduce or waive the
amount of penalty or penalties (whether they relate to one or more tax years)
payable by the assessee or stay or compound any proceeding for the recovery of
any such amount, if––
( a )   doing otherwise would cause genuine hardship to the assessee, having
regard to the circumstances of the case; and
( b )   the assessee has cooperated in any inquiry relating to the assessment or
any proceeding for the recovery of any amount due from him.
(6) The Principal Commissioner or Commissioner shall take prior approval from
the Principal Chief Commissioner or Chief Commissioner or Principal Director
General or Director General, as the case may be, if the aggregate amount of penal -
ties reduced or waived or compounded, as the case may be, under sub-section (5),
exceeds   `   100000.
(7) An order under sub-section (5), accepting or rejecting the application under
the said sub-section, shall be passed within twelve months from the end of the
month in which such application was received by the Principal Commissioner or
Commissioner.
(8) No rejection of application under sub-section (5) shall be made without giving
the assessee an opportunity of being heard.
(9) Every order made under this section shall be final and shall not be called into
question by any court or any other authority.
Penalty not to be imposed in certain cases.
470.   Irrespective of anything contained in the provisions of section 441 or 442 or
446  
15
[ *** ]   or 448 or 449 or 450 or 451 or 452 or 453 or 454 or 455 or 456 or
457 or 458 or 459 or 460 or 461 or 462 or 463 or 465(1)( c ) or 465(1)( d ) or 465(2)
or 466 or 467 or 468, no penalty shall be imposed on a person or assessee for any
failure referred to in the said provisions, if he proves that there was reasonable
cause for the said failure.
Procedure.
471.   (1) No order imposing a penalty under this Chapter shall be made unless the
assessee has been heard, or has been given a reasonable opportunity of being
heard  
16
[ by way of a show-cause notice to that effect ] .
15.   Word and figures “or 447” omitted by the Finance Act, 2026, w.e.f.   1-4-2026 .
16.   Inserted by the Finance Act, 2026, w.e.f.   1-4-2026 .