Section 452: penalty for failure to comply with provisions of Section 187

Introduction

The penalty is measured by the duration of the failure. The statute says the Assessing Officer 'may impose' it; the text does not make imposition automatic.

Key takeaways

Penalty specified

The Assessing Officer may impose ₹5,000 for each day of failure to provide the prescribed electronic-payment facility referred to in Section 187.

When this provision applies

Establish the Section 187 duty first. It applies to a person carrying on business or profession whose total sales, turnover or gross receipts exceeded ₹50 crore in the immediately preceding tax year. The provision requires the prescribed modes in addition to other electronic modes already being provided.

The failure period matters because Section 452 states ₹5,000 for every day of its duration. Record the dates and facts showing when the required facility was unavailable and when compliance was achieved; a vague monthly estimate is not a reliable calculation.

Limits and procedural safeguards

Having some electronic payment option is not by itself proof that the prescribed modes were provided. Check the current prescription and evidence of actual availability rather than assuming any bank account, card facility or payment application is sufficient.

Section 470 includes Section 452: no penalty is imposed where reasonable cause for the failure is proved. Section 471 requires a hearing or reasonable opportunity through a show-cause notice. An outage report may be relevant evidence but does not automatically establish that defence.

Step-by-step review

1. Check the business or profession status and the immediately preceding tax year’s turnover or receipts against Section 187.

2. Identify the electronic modes prescribed for the relevant period and document which were actually available.

3. Establish the duration of any failure from activation, outage and restoration records and calculate ₹5,000 per day.

4. Respond to the notice with the duty analysis, day count and any evidence proving reasonable cause.

Hypothetical example

Hypothetical illustration: a covered business has an established failure lasting four days. The Section 452 measure is 4 × ₹5,000 = ₹20,000. This example assumes both the underlying duty and four-day failure are established; the penalty procedure and any Section 470 defence must still be considered.

Records to prepare

Immediately preceding tax year sales, turnover or gross-receipt records.

The applicable prescribed modes and onboarding or activation evidence.

Dated outage, support and restoration records, plus the notice and response.

Official amended Act source

• Income-tax Act, 2025 as amended by Finance Act, 2026: Section 452 and related provisions

Step-by-step flow for applying Section 452

1. 1

   Is the person carrying on a business or profession?

   Section 187 applies only to such a person.

   • No: Section 187 and Section 452 do not apply.
   • Yes: Go to the next step.
2. 2

   Did total sales, turnover or gross receipts exceed fifty crore rupees in the immediately preceding tax year?

   This is the threshold in section 187(b).

   • No: No duty under section 187 for the year, so Section 452 does not apply.
   • Yes: Go to the next step.
3. 3

   Did the person provide a facility for accepting payment through the prescribed electronic modes?

   The modes are prescribed under section 187; offering some other electronic method is not enough.

   • Yes, throughout: No failure, so no penalty.
   • No, for some period: Go to the next step.
4. 4

   Count the duration of the failure

   Establish the days for which the facility was not provided, using activation and outage records.

5. 5

   Fix the penalty

   The Assessing Officer may impose ₹5,000 for every day of the duration of the failure. Section 452 states no upper limit.

Practical checklist

Glossary

Prescribed electronic modes

The particular modes specified under the applicable prescription, not every electronic method in use.

Duration of failure

The established period during which the required payment facility was not provided.

Frequently asked questions