Section 465: penalty for failure to answer questions, sign statements, furnish information, returns or statements, allow inspections, etc.

₹10,000 penalty - one-off defaults (sub-section 1)

A person is liable to a penalty of ₹10,000 for each of the following defaults or failures:

• Being legally bound to state the truth of any matter touching the subject of his assessment, refusing to answer any question put to him by an income-tax authority in the exercise of its powers under the Act.
• Refusing to sign any statement made by him in the course of any proceedings under the Act, which an income-tax authority may legally require him to sign.
• Being issued a summons under section 246(1) to attend and give evidence, or to produce books of account or other documents at a certain place and time, and omitting to attend or produce them.
• Failing to comply with a notice under section 268(1) or 270(8), or failing to comply with a direction issued under section 268(5).

₹500-per-day penalty - continuing failures (sub-section 2)

A person is liable to a penalty of ₹500 for every day during which the following failures continue, where that person fails to:

• Comply with a notice under section 175(7).
• Give notice of discontinuance of business or profession as required by section 320(3).
• Furnish in due time any of the returns, statements or particulars mentioned in section 252 or 397(3) or 507.
• Allow inspection of any register referred to in section 255, or of any entry in it, or allow copies of that register or entry to be taken.
• Furnish the return of income as required under section 263(1)(a)(iii) or (iv), or furnish it within the time allowed and in the manner required under section 263(1) and (2).
• Deliver, or cause to be delivered in due time, a copy of the declaration required under section 393(7).
• Furnish a certificate under section 395(4).
• Deduct and pay tax under section 416(3).
• Furnish a statement under section 392(5)(a).
• Deliver, or cause to be delivered in due time, a copy of the declaration required under section 394(3).
• Deliver, or cause to be delivered, the statement within the time specified in section 397(3)(b).
• Deliver, or cause to be delivered, a statement within the time as may be prescribed under section 397(3)(e).
• Deliver, or cause to be delivered, a statement within the time as may be prescribed under section 397(3)(g)(i).

Cap linked to tax deductible or collectible

For failures relating to a declaration required under section 393(7), a certificate as required under section 395(4), and statements under section 397(3)(b) or (e), the amount of penalty shall not exceed the amount of tax deductible or collectible.

Who imposes the penalty

Any penalty under sub-section (1) or (2) is imposed as follows:

• Where the contravention, failure or default occurs in the course of a proceeding before an income-tax authority not below the rank of Joint Director or a Joint Commissioner - by that income-tax authority.
• Under sub-section (1)(d) - by the income-tax authority who had issued the notice or direction in question.
• Under sub-section (2)(f) - by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner.
• In any other case - by the Joint Director or the Joint Commissioner.

Meaning of "income-tax authority" in this section

"Income-tax authority" includes a Principal Director General or Director General, Principal Director or Director, Joint Director and an Assistant Director or Deputy Director, while exercising the powers vested in a court under the Code of Civil Procedure, 1908, when trying a suit in respect of the matters specified in section 246(1).

Frequently asked questions