The section empowers the Assessing Officer to impose on a person a penalty equal to the sum received by him in contravention of the provisions of section 186.
Why it is there
Section 186 prescribes the mode in which certain sums may be received, and such a rule is effective only if receiving in the wrong mode costs the recipient the sum itself. Fixing the penalty at the amount received rather than at a percentage removes any calculation of advantage from breaching it.
Who it applies to
A person who has received a sum in contravention of section 186
The Assessing Officer, who may impose the penalty
The figures, and what each one turns on
Read the condition in the same row. A figure quoted without it is a wrong answer with a citation attached.
What
Figure
The condition on it
Where
Amount of penalty
A sum equal to the sum received in contravention of section 186
Imposed on the person who received it; the section says the Assessing Officer "may" impose
Section 451
What this means in practice
The measure is the sum received, so the penalty is the whole of that amount and not a proportion of any tax on it. The section is addressed to the recipient. The power is "may impose", not "shall", and the procedure in section 471 — hearing by way of a show-cause notice, and prior approval above the stated limits — applies to any penalty order under this Chapter.
An example
Illustrative only, and invented for this page. The figures are chosen to show the rule biting, not taken from any real matter.
A person receives Rs. 3 lakh in a mode that contravenes section 186. The Assessing Officer may impose a penalty of Rs. 3 lakh, being a sum equal to the amount received, and not a percentage of it or of the tax on it.
Where you meet this section
You meet this section as a penalty order, preceded by the show-cause notice and opportunity of hearing that section 471 requires for any penalty under this Chapter.
The words themselves
The Assessing Officer may impose on a person, a penalty equal to the sum received by him in contravention of the provisions of section 186.
Section 451, Income-tax Act, 2025.
What people get wrong
Computing the penalty as a percentage of the tax involved. It equals the sum received in contravention of section 186.
Applying it to the payer. The section penalises the person who received the sum.
Treating imposition as automatic. The section says the Officer "may" impose, and section 471 governs the procedure.
What this replaced
The correspondence is the Income Tax Department’s own, from its comparison utility for the 1961 and 2025 Acts. A renumbering is the easy half; whether the words changed is the half that decides cases.
271DA - Penalty for failure to comply with provisions of section 269ST
A circular binds the department, not you and not a court. Every one below was written under the 1961 Act; it reaches this section because the department’s own concordance carries the provision it names to this one.
Read this before you rely on it. Every decision below was decided under the Income-tax Act, 1961. It appears here because it is tagged to a 1961 provision that the department’s own mapping carries to section 451. That is an inference we have drawn, not a holding on the new section: where the words changed in the move, the reasoning may not survive. Treat this as the place to start looking, not as authority on the 2025 Act.
RBANMS Educational Institution v B. GunashekarSupreme CourtHelps departmenttagged s.271DA The section 269ST penalty falls on the person who receives the cash. If I am the buyer paying cash for property, am I exposed at all?
JCIT v Ganesh AgarwalHigh CourtCuts both waystagged s.271DA The Assessing Officer referred my section 269ST case to the Joint Commissioner months ago and the show cause notice has only just come. When does the…
Delta Farm Services v ITOITATHelps taxpayertagged s.271DA I received cash of more than Rs. 2 lakh from farmer-buyers against genuine, fully accounted sales in the first year of section 269ST. Can a section…
CBDT Circular 22/2017CBDTHelps taxpayertagged s.271DA We take loan repayments in cash instalments. Do the instalments add up against the two lakh limit?
What this page does not tell you. It does not reproduce the section. Everything above was written from the section’s own text as the Income Tax Department publishes it — the text is here, and nothing here is advice on your facts. Where a figure matters, read the sub-section it comes from.