Insertion of new section 271GB.
102. After section 271GA of the Income-tax Act, the following section shall be inserted with effect from the 1st day of April, 2017,-
Penalty for failure to furnish report or for furnishing inaccurate report under section 286.
“271GB. (1) If any reporting entity referred to in section 286, which is required to furnish the report referred to in sub-section (2) of the said section, in respect of a reporting accounting year, fails to do so, the authority prescribed under that section (herein referred to as prescribed authority) may direct that such entity shall pay, by way of penalty, a sum of,-
(a) five thousand rupees for every day for which the failure continues, if the period of failure does not exceed one month; or
(b) fifteen thousand rupees for every day for which the failure continues beyond the period of one month.
(2) Where any reporting entity referred to in section 286 fails to produce the information and documents within the period allowed under sub-section (6) of the said section, the prescribed authority may direct that such entity shall pay, by way of penalty, a sum of five thousand rupees for every day during which the failure continues, beginning from the day immediately following the day on which the period for furnishing the information and document expires.
(3) If the failure referred to in sub-section (1) or sub-section (2) continues after an order has been served on the entity, directing it to pay the penalty under sub-section (1) or, as the case may be, under sub-section (2), then, notwithstanding anything contained in sub-section (1) or sub-section (2), the prescribed authority may direct that such entity shall pay, by way of penalty, a sum of fifty thousand rupees for every day for which such failure continues beginning from the date of service of such order.
(4) Where a reporting entity referred to in section 286 provides inaccurate information in the report furnished in accordance with sub-section (2) of the said section and where-
(a) the entity has knowledge of the inaccuracy at the time of furnishing the report but fails to inform the prescribed authority; or
(b) the entity discovers the inaccuracy after the report is furnished and fails to inform the prescribed authority and furnish correct report within a period of fifteen days of such discovery; or
(c) the entity furnishes inaccurate information or document in response to the notice issued under sub-section (6) of section 286,
then, the prescribed authority may direct that such person shall pay, by way of penalty, a sum of five lakh rupees.”.
Notes on Clauses:
Clause 102 of the Bill seeks to insert a new section 271GB in the Income-tax Act relating to penalty for failure to furnish report or for furnishing inaccurate report under section 286.
The proposed new section provides that if any reporting entity referred to in section 286 fails to furnish a report referred to in subsection (2) of the said section then, the prescribed authority may direct such entity to pay by way of penalty a sum of five thousand rupees for every day for which the failure continues if the period of failure does not exceed one month and fifteen thousand rupees for every day for which failure continues beyond the period of one month.
It is further provided that where any reporting entity fails to produce the information and documents within the period allowed under sub-section (6) of section 286, the prescribed authority may direct that such entity shall pay, by way of penalty, a sum of five thousand rupees for every day during which the failure continues, beginning from the day immediately following the day on which the period for furnishing the information and document expires. It is also provided that if the failures continue after any order directing the person to pay by way of penalty any sum has been served on the entity, then the prescribed authority may direct that such entity shall pay, by way of penalty, a sum of fifty thousand rupees for every day for which such failure continues begining from the date of service of such order.
It is also provided that in case a reporting entity provides inaccurate information in the report furnished in accordance with sub-section (2) of the said section 286 and where the entity knows of the inaccuracy at the time of furnishing the report but does not inform the prescribed authority or the entity discovers the inaccuracy after the report is furnished and fails to inform the prescribed authority and furnish correct report within a period of fifteen days of such discovery or the entity furnishes inaccurate information or document in response to notice under sub-section (6) of section 286 then, the prescribed authority may direct that such person shall pay, by way of penalty, a sum of five lakh rupees.
These amendments will take effect from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017- 2018 and subsequent years.
