The present article covers the penalty provisions of section 271DB of the Income Tax Act. It also explains the connecting provisions of section 269SU of the Income Tax Act and also provides a list of the prescribed mode of electronic payments referred to under section 269SU.
It is pertinent to note here that Section 269SU was inserted with effect from 1st November 2019, with an aim to curb black money and taking a step further towards cash less economy. The penalty under section 271DB would be imposed in case the specified person fails to comply with the provisions of section 269SU.
The provisions of section 271DB states as under –
1. The provision applies to the person who is required to provide a facility for accepting payment through the prescribed electronic mode referred to in section 269SU of the Income Tax Act.
2. If the person fails to provide the facility as mentioned above, he would be liable to pay the penalty under provisions of section 271DB.
3. However, no penalty would be imposable, even in case of failure, if the person proves the good and sufficient reason for the failure.
4. The penalty under section 271DB can be imposed only and only by the Joint Commissioner of the Income Tax.
The Central Board of Direct Taxes vide circular no. 32/2019 dated 30th December 2019, has clarified that no penalty shall be levied under section 271DB of the Income Tax Act if the person installs and operationalizes the facility for accepting payment through the prescribed electronic modes on or before 31st January 2020.
However, in case of failure, the penalty provisions of section 271DB shall be applicable from 1st February 2020.
As seen penalty under section 271DB can be levied only in case the person contravenes provisions of section 269SU. Thus, it is equally essential to understand the provisions of section 269SU.
1. The provisions of section 269SU are made effective from 1st November 2019.
2. The provisions of section 269SU are applicable only to the person carrying on the business.
3. The provisions apply only if the total sales / total turnover / gross receipts of the business exceed INR 50 Crores during the immediately preceding previous year.
If the person satisfies all the above conditions, then the provisions of section 269SU get applicable. In such a case, the person is required to provide the facility for accepting payment through prescribed electronic mode (in addition to the facility of other electronic modes of payments).
Rule 119AA of the Income Tax Rules was inserted vide notification no. 105/2019-Income Tax dated 30th December 2019. Please note rule 119AA was made effective from 1st January 2020. As per rule 119AA of the Income Tax Rules following is the mode of payment for the purpose of section 269SU –
1. Debit Card Powered by RuPay.
2. UPI i.e. Unified Payments Interface / BHIM-UPI.
3. UPI QR Code i.e. Unified Payments Interface Quick Response Code / BHIM-UPI QR Code.
In case of failure, the penalty under section 271DB of the Income Tax Act would be imposed to the extent of INR 5000 per day till the failure continues. However, it is important here to note that the penalty would be effective only from 1st February 2020.
|1||Section 272BB Penalty for failure to comply section 203A provisions|
|2||Section 272B Penalty for failure to comply with provisions of PAN|
|3||Section 272AA Penalty for failure in complying with provisions of section 133B|
|4||Section 272A Penalty for failure to answer questions or furnish information / returns/ statements or allow inspections etc|
|5||Section 271J Penalty on professionals for furnishing incorrect information in reports / certificates|
|6||Section 271I Penalty for failure in furnishing Form 15CA & Form 15CB|
|7||Section 271H Penalty for late filing/non-filing of TDS or TCS return|
|8||Penalty for failure in furnishing report or furnishing inaccurate report under section 286 – Section 271GB|
|9||Section 271GA Penalty for failure in furnishing the information / document in Form 49D as required under section 285A|
|10||Section 271G Penalty for failure to furnish information / document as per provisions of section 92D|
|11||Section 271FB Penalty for default in furnishing return of fringe benefits|
|12||Section 271FAB Penalty for failure to furnish statement / information / document by an eligible investment fund|
|13||Penalty for providing inaccurate statement of financial transaction or reportable account- Section 271FAA|
|14||Section 271FA Penalty for failure in furnishing statement of financial transactions or reportable account|
|15||Section 271E Penalty for contravening provisions of section 269T|
|16||Section 271DB | Penalty for contravening provisions of section 269SU|
|17||Section 271DA Penalty for contravening provisions of section 269ST|
|18||Section 271CA Penalty for failure to collect tax at source (TCS)|
|19||Section 271D Penalty for contravening provisions of section 269SS|
|20||Section 271C Penalty for failure / non-deduction / non-payment of TDS|
|21||TDS Rate Chart for AY 2020-21 and AY 2021-22|
|22||Section 271BA Penalty for failure to furnish section 92E report|
|23||Section 271B Penalty for failure to get accounts audited|
|24||Section 271AAC Penalty in respect of certain specified income|
|25||Section 271AA Penalty for failure to maintain Transfer Pricing documents|
|26||Section 271A Penalty for failure to keep / maintain or retain books of accounts, documents|
|27||Section 270A(1) Penalty for under-reporting & misreporting of income|
|28||Section 269SU Acceptance of payment through electronic modes|
|29||Section 234F Late fees for default in filing of income tax return|
|30||Section 234E Late Fee for default in filing of TDS / TCS returns|
|31||Section 158BFA(2) – Penalty on undisclosed income for block period|
|32||Section 140A(3) Penalty for non-payment of self-assessment tax|