Section 271GB Penalty for failure in furnishing report or furnishing inaccurate report under section 286
The provisions of section 286 mandate certain specified entities to furnish a report in respect of the international group. In case such reporting entities fail in providing the requisite report or furnishes the report with inaccurate information, then the prescribed authority can levy a penalty under section 271GB of the Income Tax Act.
Under the present article, we would understand the applicability of penalty provisions of section 271GB; relevant provisions of section 286 and the amount of penalty payable under section 271GB of the Income Tax Act.
The provisions of section 271GB get attracted under the following cases –
1. The reporting entity fails in submitting the report within the prescribed time limit as per provisions of section 286 (2).
2. The reporting entity fails to duly provide the information and document within the time limit allowed under section 286 (6).
3. The reporting entity provides inaccurate information while furnishing the report prescribed under section 286 (2).
4. The reporting entity provides inaccurate information / documents in response to notice issued under section 286 (6).
Under any of the above circumstances, the prescribed income tax authority may direct the defaulter to pay the penalty under section 271GB of the Income Tax Act.
Provisions of section 286 (2) require every resident parent entity or the alternate reporting entity to furnish a report, in respect of an international group of which it is a constituent.
It should be noted that such a report is to be submitted for every reporting accounting year. The report is to be submitted in Form 3CEAD within a period of 12 months from the end of the respective reporting accounting year.
The provisions of section 286 (6) authorize the prescribed authority (for the purpose of verifying the accuracy of a report submitted) to issue a notice asking the reporting entities to produce necessary information and documents. It is mandatory on the part of the reporting entity to provide such information / documents within a period of 30 days of the receipt of the notice.
First of all, let us look at the amount of penalty payable in case of failure in furnishing report as required under section 286 –
|Particulars||Amount of Penalty|
|Failure in furnishing the report as prescribed under section 286 (2)||INR 5,000 per day in case the failure doesn’t exceed one month.
INR 15,000 per day in case the failure exceeds one month.
|Failure in producing the information / document within the period allowed under a notice issued under section 286 (6).||INR 5,000 per day from the day immediately succeeding the day on which the period for furnishing the information / document expires.|
It should be noted hereunder that under both the above failure, if the order has already been served to the entity for payment of the penalty, however, the failure still continues. Then, the authority can direct the entity to pay the penalty of INR 50,000 per day from the date of service of order till the failure continues.
Now, let us look into the amount of penalty payable in case the reporting entities provide inaccurate information in the report furnished as per provisions of section 286 (2) or information / documents provided as per section 286 (6).
Section 271GB (4) imposes a penalty of INR 5 Lakhs for inaccurate information under the following circumstances-
1. The entity was aware about the inaccuracy at the time of submitting the report, however, the entity failed to inform the authority.
2. The entity discovers the fact of inaccuracy after submission of the report. However, it fails to inform the authority and submit a correct report within a period of 15 days of discover of the fact.
3. The entity submits inaccurate information / document in response to notice issued under section 286 (6).
It is important to mention here that as per section 273B, in case the defaulter proves the reasonable cause of the failure, then the penalty cannot be imposed under section 271GB.
|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|