Any person making payment to a non-resident (not being a company) or a foreign company is required to furnish payment information in Form 15CA and Form 15CB. In case such person fails in furnishing the information in Form 15CA and Form 15CB, then he would be liable to pay the penalty under section 271-I of the Income Tax Act.

Further, it should be noted that the penalty under section 271-I are also applicable in case the person furnishes inaccurate information in Form 15CA and Form 15CB.

In the present article, we would try to understand the applicability of provisions of section 271-I; understand the relevant provisions attached with Form 15CA and Form 15CB and amount of penalty payable under section 271-I.

Applicability of penalty provisions of section 271-I of the Income Tax Act

The penalty provisions of section 271-I are applicable under any of the following circumstances –

1. The person fails to furnish information in Form 15CA and Form 15CB; or

2. The person has furnished inaccurate information in Form 15CA and Form 15CB.

In case of any of the above default, the defaulter would be liable to pay the penalty under section 271-I.

Understanding the relevant provisions attached with Form 15CA and Form 15CB

As seen above, the penalty under section 271-I is levied only in a case when the person defaults in filing the Form 15CA and Form 15CB, hence it is important to under the relevant provisions attached with the filing of the Form 15CA and Form 15CB.

Provisions of section 195 mandate the person to deduct income tax (i.e. TDS) from the payment made to the non-resident. Here, [as per provisions of section 195 (6) read with rule 37BB] the person making payment to the non-resident is required to furnish the following forms as per the below table –

Particulars Furnishing of relevant Forms
When the payment made is less than INR 5 Lakhs Part A of Form 15CA
When the payment made is more than INR 5 Lakhs Part B of Form 15CA;

Chartered Accountant certificate in Form 15CB; and

Part C of Form 15CA.

When the payment made is not chargeable to income tax Part D of Form 15CA

In case the person making payment to a non-resident (not being a company) or a foreign company, fails to furnish the Form, as per the above table, or furnishes inaccurate information, then the person would be liable to pay the penalty under section 271-I.

Amount of penalty payable under section 271-I

In case the person fails to duly furnish information in Form 15CA and 15CB or files the forms with inaccurate information, then penalty under section 271-I of the Income Tax Act gets applicable. In such a case, the Assessing Officer may direct the defaulter to pay an amount of INR 1 Lakhs as a penalty.

However, as per provisions of section 273B of the Income Tax Act, no penalty can be imposed under section 271-I, in case the defaulter proves the reasonable cause for the failure.

Read Also:-

S. No. Title
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

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