The penalty provisions of section 272BB of the Income Tax Act penalizes the person in case of default in complying with the provisions of section 203A. It should be noted here that section 203A covers provisions relating to the ‘tax deduction and collecting account number’.

The present article briefly provides understanding on applicability of the penalty provisions of section 272BB. The article also explains the connecting provisions of section 203A and the amount payable as a penalty under section 272BB.

Understanding the applicability of the penalty provisions of section 272BB of the Income Tax Act

The penalty provisions of section 272BB penalize the defaulter under the following circumstances –

  • In case the person fails to comply with the provisions of section 203A of the Income Tax Act; or
  • In case the person quotes false ‘tax deduction account number’ or the ‘tax collection account number’ or the ‘tax deduction and collection account number’ in the challans / certificates / statements / other documents as prescribed under section 203A.

In any of the above default, the defaulter would be penalized under section 272BB of the Income Tax Act. However, provisions of section 272BB (2) clearly state that no order imposing a penalty under section 272BB would be levied unless an appropriate opportunity of being heard is given to the defaulter in the matter.

Understanding connecting provisions of section 203A –

Section 203A of the Income Tax Act deals with the provisions relating to the ‘tax deduction and collection account number’. The basic provisions of section 203A state as under –

  • The person responsible for deducting tax (i.e. TDS) or collecting tax (i.e. TCS) is required to apply for the ‘tax deduction account number’ or ‘tax collection account number’ within the prescribed time limit.
  • The person is required to quote the ‘tax deduction account number’ or the ‘tax collection account number’ or the ‘tax deduction and collection account number’ on the following documents –
    • In all the challans for the payment of TDS / TCS.
    • In all the certificates furnished for tax deducted (i.e. TDS certificate) or certificate furnished for collection of tax (i.e. TCS certificate).
    • In all the TDS return or TCS returns.
    • In any other documents pertaining to such transactions as may be prescribed in the interest of revenue.

Amount of penalty payable under section 272BB 

In case of default in complying with the provisions of section 203A, the Assessing Officer may direct the defaulter to pay the penalty under section 272BB. The defaulter is liable to pay a sum of INR 10,000 as a penalty.

However, as per provisions of section 273B, the penalty cannot be imposed under section 272BB in case the defaulter proves the reasonable cause for the said 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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