Section 271BA Penalty for failure to furnish section 92E report

The person who has entered into the following transactions –

• an international transaction (as defined under section 92B of the Income Tax Act); or
• a specified domestic transaction (as defined under section 92BA of the Income Tax Act)

are mandatorily required to submit a report, as per provisions of section 92E of the Income Tax Act.

In case such person fails to submit the requisite report, then, on the direction of the Assessing Officer, a penalty under section 271BA of the Income Tax Act would be leviable on the defaulter. The current article explains the applicability of provisions of section 271BA and amount payable as a penalty under section 271BA of the Income Tax Act.

Applicability of section 271BA of the Income Tax Act

The penalty provisions of section 271BA states as under –

1. The penalty under section 271BA is applicable in case the person fails to furnish a report from an accountant as per provisions of section 92E of the Income Tax Act.

2. The penalty under section 271BA is applicable only in case the Assessing Officer directs the defaulter to pay the penalty.

Following can be concluded from the combined reading of section 92E of Income Tax Act, rule 10E of Income Tax Rules and section 271BA of Income Tax Act –

• Every person, who has entered into either an international transaction or a specified domestic transaction, is required to furnish a report from an accountant (section 92E);
• The said report should be in Form 3CEB (rule 10E); and
• The said report in Form 3CEB needs to be duly submitted within 30^th
• In case of failure, in duly submission of the report in Form 3CEB, a penalty under section 271BA would be imposed.

Amount of penalty payable under section 271BA of the Income Tax Act –

The defaulter is required to pay the penalty amounting to INR 1Lakh under section 271BA.

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