Substitution of new section for section 271FA
48. For section 271FA of the Income-tax Act, the following section shall be substituted with effect from the 1st day of April, 2014, namely:––
Penalty for failure to furnish annual information return
“271FA. If a person who is required to furnish an annual information return under sub-section
(1) of section 285BA, fails to furnish such return within the time prescribed under sub-section (2) thereof, the income-tax authority prescribed under said sub-section (1) may direct that such person shall pay, by way of penalty, a sum of one hundred rupees for every day during which such failure continues:
Provided that where such person fails to furnish the return within the period specified in the notice issued under sub-section (5) of section 285BA, he shall pay, by way of penalty, a sum of five hundred rupees for every day during which the failure continues, beginning from the day immediately following the day on which the time specified in such notice for furnishing the return expires.”.
Notes on Clauses:
Clause 48 of the Bill seeks to amend section 271FA of the Income-tax Act relating to penalty for failure to furnish annual information return.
The existing provisions contained in section 271FA provides that if a person who is required to furnish an annual information return, as required under sub-section (1) of section 285BA, fails to furnish such return within the time prescribed under that subsection, the income-tax authority prescribed under the said subsection may direct that such person shall pay, by way of penalty, a sum of one hundred rupees for every day during which the failure continues.
It is proposed to amend the aforesaid section so as to provide that if a person who is required to furnish an annual information return under sub-section (1) of section 285BA, fails to furnish such return within the time prescribed under sub-section (2) thereof, the income-tax authority prescribed under the said subsection (1) may direct that such person shall pay, by way of penalty, a sum of one hundred rupees for every day during which such failure continues.
It is further proposed to provide that where such person fails to furnish the return within the period specified in the notice issued under sub-section (5) of section 285BA, he shall pay, by way of penalty, a sum of five hundred rupees for every day during which the failure continues, beginning from the day immediately following the day on which the time specified in such notice for furnishing the return expires.
This amendment will take effect from 1st April, 2014.