Amended and updated notes on section 272A of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to Penalty for failure to answer questions, sign statements, furnish information, returns or statements, allow inspections, etc.
Chapter XXI (Sections 270A to 275) of the Income Tax Act 1961 deals with the provisions related to penalties imposable. Section 272A of IT Act 1961 provides for Penalty for failure to answer questions, sign statements, furnish information, returns or statements, allow inspections, etc.
Recently, we have discussed in detail section 271K (Penalty for failure to furnish statements, etc.) of IT Act 1961.
Today, we learn the provisions of section 272A of Income-tax Act 1961 as amended by the Finance Act 2022. The amended provision of section 272A is effective for financial year 2022-23 relevant to the assessment year 2023-24.
In this article, you will learn detail of the provisions of section 272A of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962 as provided by Ministry of Law and Justice, Government of India.
Section-272A: Penalty for failure to answer questions, sign statements, furnish information, returns or statements, allow inspections
Section 272A (1):
If any person,—
- (a) being legally bound to state the truth of any matter touching the subject 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 proceedings under this Act, which an income-tax authority may legally require him to sign; or
- (c) to whom a summons is issued under sub-section (1) of section 131 either to attend to give evidence or 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 sub-section (1) of section 142 or sub-section (2) of section 143 or fails to comply with a direction issued under sub-section (2A) of section 142,
he shall pay, by way of penalty, a sum of ten thousand rupees for each such default or failure.
Section 272A (2):
If any person fails—
- (a) to comply with a notice issued under sub-section (6) of section 94; or
- (b) to give the notice of discontinuance of his business or profession as required by sub-section (3) of section 176; or
- (c) to furnish in due time any of the returns, statements or particulars mentioned in section 133 or section 206 or section 206C or section 285B; or
- (d) to allow inspection of any register referred to in section 134 or of any entry in such register or to allow copies of such register or of any entry therein to be taken; or
- (e) to furnish the return of income which he is required to furnish under sub-section (4A) or sub-section (4C) of section 139 or to furnish it within the time allowed and in the manner required under those sub-sections; or
- (f) to deliver or cause to be delivered in due time a copy of the declaration mentioned in section 197A; or
- (g) to furnish a certificate as required by section 203 or section 206C; or
- (h) to deduct and pay tax as required by sub-section (2) of section 226;
- (i) to furnish a statement as required by sub-section (2C) of section 192;
- (j) to deliver or cause to be delivered in due time a copy of the declaration referred to in sub-section (1A) of section 206C;
- (k) to deliver or cause to be delivered a copy of the statement within the time specified in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C;
- (l) to deliver or cause to be delivered the statements within the time specified in sub-section (1) of section 206A;
- (m) to deliver or cause to be delivered a statement within the time as may be prescribed under sub-section (2A) of section 200 or sub-section (3A) of section 206C,
he shall pay, by way of penalty, a sum of five hundred rupees for every day during which the failure continues:
[The long line in sub-section(2) of section 272A amended (substituted) w.e.f. 1-April-2022 by the Finance Act 2022]
Provided that the amount of penalty for failures in relation to a declaration mentioned in section 197A, a certificate as required by section 203 and returns under sections 206 and 206C and statements under sub-section (2A) or sub-section (3) of section 200 or the proviso to sub-section (3) or under sub-section (3A) of section 206C shall not exceed the amount of tax deductible or collectible, as the case may be:
Provided further that no penalty shall be levied under this section for the failure referred to in clause (k), if such failure relates to a statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012.
Section 272A (3):
Any penalty imposable under sub-section (1) or sub-section (2) shall be imposed—
- (a) in a case where the contravention, failure or default in respect of which such penalty is imposable occurs in the course of any proceeding before an income-tax authority not lower in rank than a Joint Director or a Joint Commissioner, by such income-tax authority;
- (aa) in a case falling under clause (d) of sub-section (1), by the income-tax authority who had issued the notice or direction referred to therein;
- (b) in a case falling under clause (f) of sub-section (2), by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner; and
- (c) in any other case, by the Joint Director or the Joint Commissioner.
Section 272A (4):
No order under this section shall be passed by any income-tax authority referred to in sub-section (3) unless the person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter by such authority.
Explanation: 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 sub-section (1) of section 131.