Section 459 — Penalty for failure to furnish report or for furnishing inaccurate report under section 511. Successor to s.271GB of the 1961 Act.
Section 459 is in Chapter XXI — Penalties, which runs from section 439 to section 472.
Sub-section (1) lets the prescribed authority under section 511 penalise a reporting entity that fails to furnish the report required by section 511(2) for a reporting accounting year at Rs. 5,000 a day while the failure lasts up to one month, and Rs. 15,000 a day for each day beyond a month. Sub-section (2) imposes Rs. 5,000 a day where the entity fails to produce information and documents within the period allowed under section 511(7), running from the day after that period expires. Sub-section (3) overrides both and raises the rate to fifty thousand rupees a day where the failure continues after an order imposing penalty has been served, running from the date of service. Sub-section (4) imposes Rs. 5,00,000 for inaccurate information in the report in three situations: where the entity knew of the inaccuracy when furnishing the report and did not inform the authority, where it discovered the inaccuracy afterwards and failed both to inform the authority and to furnish a correct report within fifteen days of discovery, or where it furnished inaccurate information or documents in response to a section 511(7) notice.
Country-by-country style reporting is only useful if filed on time and accurately, so the section prices delay by the day and escalates sharply once an order has been served and still ignored. The knowledge-based conditions in sub-section (4) target concealment rather than honest error, with a fifteen-day window to put a discovered inaccuracy right.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Daily penalty for failure to furnish the report, first month | Rs. 5,000 for every day | Where the period of failure does not exceed one month | Sub-section (1)(a) |
| Daily penalty for failure to furnish the report, beyond one month | Rs. 15,000 for every day | For each day the failure continues beyond the period of one month | Sub-section (1)(b) |
| Daily penalty for failure to produce information and documents | Rs. 5,000 for every day | From the day immediately following the day the section 511(7) period expires | Sub-section (2) |
| Daily penalty once a penalty order has been served and the failure continues | Fifty thousand rupees for every day | Irrespective of sub-sections (1) and (2), from the date of service of the order | Sub-section (3) |
| Penalty for inaccurate information in the report | Rs. 5,00,000 | Only where the entity knew of the inaccuracy and did not inform the authority, or discovered it later and failed to inform and file a correct report within fifteen days, or gave inaccurate information in response to a section 511(7) notice | Sub-section (4) |
| Window to correct a discovered inaccuracy | Fifteen days | From discovery; the entity must both inform the prescribed authority and furnish a correct report | Sub-section (4)(b) |
The cost of delay compounds in steps, so the practical questions are how long the failure has run and whether a penalty order has already been served — after service the rate jumps to fifty thousand rupees a day. If you find an error in a report already filed, the fifteen-day window in sub-section (4)(b) is the escape: inform the prescribed authority and furnish a correct report within it, and the Rs. 5,00,000 penalty does not arise on that limb. An inaccuracy you did not know about and have not discovered is not within sub-section (4) at all, since each of its three limbs turns on knowledge, discovery, or a response to a section 511(7) notice.
A reporting entity furnishes the section 511(2) report for a reporting accounting year fifty days late. The charge is stepped, not flat: Rs. 5,000 for every day of the first month, and Rs. 15,000 for every day beyond it, so on a thirty-day month the fifty days cost Rs. 1,50,000 plus Rs. 3,00,000. Worse, a penalty order is not the end of the exposure — if the failure continues after that order is served, sub-section (3) overrides both daily rates and charges fifty thousand rupees a day from the date of service. On the accuracy side, an entity that discovers an error in a report already filed has fifteen days from discovery to both inform the prescribed authority and furnish a correct report; miss that window and the Rs. 5,00,000 penalty under sub-section (4)(b) applies.
In a penalty order made by the prescribed authority under section 511 against the reporting entity, and in the notice issued under section 511(7) calling for information and documents, non-production of which starts the separate daily charge in sub-section (2). The section touches the reporting entity and that prescribed authority; it names no other forum.
If the failure referred to in sub-section (1) or (2) continues after an order imposing a penalty under the said sub-section, has been served on the entity, then, irrespective of the provisions of the said sub-sections, the prescribed authority may impose penalty of fifty thousand rupees for every day for which such failure continues beginning from the date of service of such order.
See the full 1961 to 2025 concordance.