Chapter XXI - Penalties
Section 470
Section 470: penalty not to be imposed in certain cases
Section 470 provides a general defence against a specified list of penalties in this Chapter: if the person or assessee can prove there was reasonable cause for the failure in question, no penalty is imposed under those provisions.
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Need advice on Section 470?
This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
Irrespective of anything contained in the provisions of section 441 or 442 or 446 or 448 or 449 or 450 or 451 or 452 or 453 or 454 or 455 or 456 or 457 or 458 or 459 or 460 or 461 or 462 or 463 or 465(1)(c) or 465(1)(d) or 465(2) or 466 or 467 or 468, no penalty shall be imposed on a person or assessee for any failure referred to in the said provisions, if he proves that there was reasonable cause for the said failure.
Introduction
Section 470 prevents penalties under its expressly listed provisions when the person proves reasonable cause for the particular failure. The Finance Act, 2026 removed section 447 from the list after omitting that provision. The defence does not extend to every penalty in the Act.
Key takeaways
Burden of proof
The person or assessee must prove reasonable cause for the failure.
Closed list
Relief is confined to the sections and specified subsections expressly named in section 470.
No section 447
The 2026 amendment removed that reference from the operative list.
What Section 470 says
"Irrespective of anything contained in the provisions of section 441 or 442 or 446 or 448 or 449 or 450 or 451 or 452 or 453 or 454 or 455 or 456 or 457 or 458 or 459 or 460 or 461 or 462 or 463 or 465(1)(c) or 465(1)(d) or 465(2) or 466 or 467 or 468, no penalty shall be imposed on a person or assessee for any failure referred to in the said provisions, if he proves that there was reasonable cause for the said failure."
The text notes that the reference to "or 447" was omitted by the Finance Act, 2026, with effect from 1 April 2026, so section 447 is no longer among the provisions covered by this reasonable-cause defence.
How the defence works
Section 470 does not exempt anyone from the listed penalty provisions outright - it gives the person or assessee the opportunity to avoid the penalty by proving there was a reasonable cause for the specific failure that triggered it.
Applying Section 470 in practice
Function. Even where a listed penalty provision's failure occurred, no penalty is imposed if the person proves reasonable cause for that failure. The section contains an explicit list; it is not a universal defence to every penalty or criminal offence in the Act. It includes, among others, sections 441, 442, 446, 448–454, 456–458, 460–462, 466 and 468.
Hypothetical example
Documented portal unavailability could be relevant evidence for a filing delay, but its effect depends on the actual facts and duty.
Step-by-step flow for applying Section 470
- 1
Is the proposed penalty under one of the listed provisions?
The list is Sections 441, 442, 446, 448 to 463, 465(1)(c), 465(1)(d), 465(2), 466, 467 and 468.
- No: Section 470 gives no protection; the penalty provision's own terms apply.
- Yes: Go to the next step.
- 2
Identify the exact failure
Link the reasonable cause to the specific failure referred to in that provision, for example a late statement or a missed summons.
- 3
Can the person prove reasonable cause for that failure?
The burden is on the person ("if he proves"). Keep contemporaneous evidence.
- Yes: No penalty is imposed for that failure.
- No: Go to the next step.
- 4
Penalty may proceed
The penalty may be imposed under the relevant provision, after a hearing under Section 471(1).
Practical checklist
Do
- Match the penalty notice to the exact section and subsection named in section 470.
- Collect contemporaneous documents explaining why the particular failure occurred.
- match the exact penalty section to section 470's list, identify the failure period, gather contemporaneous evidence of the cause, and show steps taken once the obstacle ended.
Avoid
- Do not assume a reasonable-cause defence under this section covers a penalty that is not expressly listed.
Illustrative example
Worked example: two penalties, one listed and one not
Hypothetical facts (illustration only, not a real taxpayer): An institution referred to in section 45 misses the documents prescribed under section 45(4)(a) (Section 464). Separately, its officer does not attend in response to a summons under section 246(1) on the given date (Section 465(1)(c)). For the summons, it has a hospital admission record for that date. The facts are assumed.
Summons default
Section 465(1)(c) is listed in Section 470. The hospital record can prove a reasonable cause, so no penalty is imposed for that failure.
Document default
Section 464 is not in the list in Section 470, so this section gives no protection for it.
Evidence
The proof must relate to the specific failure. A general claim of difficulty, with no records, is unlikely to prove reasonable cause.
Outcome
- No penalty for the summons default if the reasonable cause is proved.
- The Section 464 penalty is decided without Section 470.
Frequently asked questions
Does Section 470 apply to every penalty in the Act?
No. It applies only to the provisions expressly listed in Section 470: sections 441, 442, 446, 448 to 463, specified parts of section 465, and sections 466, 467 and 468. It does not cover every section in the range 441 to 463; the Finance Act, 2026 removed the reference to section 447.
What must a person show to avoid the penalty under Section 470?
That there was reasonable cause for the failure that would otherwise attract the penalty under one of the listed provisions.
Is an unsupported explanation enough?
The person must *prove* reasonable cause.
Need help applying this provision to your situation?
Talk to our tax team about a penalty noticeLast updated 10 October 2026