Penalty for Failure to Co-operate or Comply with Statutory Requirements
Nature of Default and its Penalty
• Any person who commits any of the following defaults is liable to pay a penalty of Rs. 10,000 for each such default or failure:
Refusal to answer questions legally required by the Income Tax Authorities.
Refusal to sign statements made by him during any proceedings.
Non-compliance with summons under Section 131(1) to give evidence or produce books of account or other documents.
Failure to comply with notices under Sections 142(1) or 143(2).
Failure to comply with directions for special audit under Section 142(2A).
• Any person who commits any of the following defaults is liable to pay a penalty of Rs. 500 for every day during which the failure continues:
Failure to furnish information within the prescribed time limit relating to shares or securities (Section 94(6)).
Failure to notify discontinuance of business or profession within 15 days (Section 176(3)).
Failure to furnish information required by the Assessing Officer (Section 133).
Failure to allow inspection or provide copies of the register (Section 134).
Failure to file the return of a charitable trust or institution within the prescribed time limit (Sections 139(4A), 139(4C)).
Failure to furnish perquisite statements or statement of profits in lieu of salary (Section 192(2C)).
Failure to deliver nil deduction declaration in due time (Section 197A).
Failure to issue TDS or TCS certificates (Sections 203, 206C).
Other specified defaults as per Sections 206A, 206C(1A), 226(2), 285B, etc.
For defaults relating to declarations mentioned in Section 197A or TDS/TCS certificates, the penalty shall not exceed the amount of tax deductible or collectable.
Penalty shall not be levied if the assessee proves reasonable cause for the failure.
Authority to Levy Penalty
• Defaults occur during any proceeding: the penalty shall be imposed by an authority not lower than the Joint Director or the Joint Commissioner.
• Defaults occur in compliance with an enquiry or special audit notices: the penalty shall be imposed by the authority that issued the notice/direction.
• Defaults related to non-delivery of Section 197A declarations: the penalty shall be imposed by the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner, or Commissioner.
• Other defaults: the penalty shall be imposed by the Joint Director or the Joint Commissioner.