Penalty and Prosecution for failure to collect tax at source [ Section 271CA and section 276BB ]

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..... efaults occurring on or after that date. The amendment by the Finance Act, 2025, shifting the authority to the Assessing Officer, is prospective and applies to penalties imposed on or after April 1, 2025, regardless of the period of default. This distinction is important for determining the competent authority in ongoing or future proceedings. * If any person who is required to collect tax at so .....

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..... nalty u/s 271CA was vested in the Joint Commissioner of Income-tax.  However, the Finance Act, 2025, has amended the provision to provide that, for penalties imposed on or after April 1, 2025, the authority will shift to the Assessing Officer. Prosecution [ Section 276BB ] * If a person fails to pay to the credit of the Central Government, the tax collected by him as required under the p .....

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..... here was reasonable cause for the failure. This provision is an important safeguard against the mechanical or unjust imposition of penalties. * Section 271CA (TCS penalty) is analogous to Section 271C, which deals with penalties for failure to deduct tax at source (TDS). Both provisions prescribe a penalty equal to the amount of tax not collected/deducted and are subject to the reasonable caus .....

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