Section 463 — Penalty for furnishing incorrect information in reports or certificates. Successor to s.271J of the 1961 Act.
Section 463 is in Chapter XXI — Penalties, which runs from section 439 to section 472.
Sub-section (1) makes an accountant, a merchant banker or a registered valuer liable to a penalty of Rs. 10000 for any incorrect information in a report or certificate furnished under any provision of the Act or the rules made under it. Sub-section (2) makes the penalty payable for each such report or certificate. Sub-section (3) provides that it is payable on the directions of the Assessing Officer, the Joint Commissioner (Appeals) or the Commissioner (Appeals), where the incorrect information is found by that authority in the course of any proceedings under the Act.
Sub-section (4) defines a "merchant banker" as a Category I merchant banker registered with the Securities and Exchange Board of India, and a "registered valuer" as a person registered as a valuer under section 514.
Large parts of the Act rely on a professional's certificate rather than on the Department's own verification, so the certificate has to carry a personal cost if it is wrong. The section places that cost on the person who signed, not on the assessee who relied on it, and by making the penalty payable for each report or certificate it scales with the volume of work rather than with the tax at stake.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Amount of the penalty | Rs. 10000 | For any incorrect information in a report or certificate furnished under any provision of the Act or the rules made thereunder | Sub-section (1) |
| Basis on which the penalty multiplies | Payable for each such report or certificate | Not once per proceeding or per assessee | Sub-section (2) |
The penalty falls on the professional personally. It is triggered by incorrect information, and the section requires no finding of dishonesty and no loss of tax, so it can attach to a certificate that produced no advantage to anyone. Sub-section (2) gives the section its bite: at Rs. 10000 for each report or certificate, a systematic error repeated across many certificates multiplies rather than being absorbed in a single penalty. Sub-section (3) confines who may direct it and when, and the definitions in sub-section (4) narrow the class exposed to a Category I merchant banker and a valuer registered under section 514.
An accountant furnishes certificates for five different assessees in a tax year, each carrying the same incorrect figure drawn from a template. The Assessing Officer finds the error in the course of proceedings and directs the penalty. Under sub-section (1) it is Rs. 10000 for the incorrect information, and under sub-section (2) it is payable for each such certificate, so the total is Rs. 50000 — payable by the accountant, not by any of the five assessees.
In a penalty direction issued by the Assessing Officer, the Joint Commissioner (Appeals) or the Commissioner (Appeals) during proceedings under the Act, addressed to the professional who signed the report or certificate rather than to the assessee it was furnished for.
shall be liable to pay a penalty of Rs. 10000 for any incorrect information in any report or certificate furnished under any provision of this Act or the rules made thereunder
The penalty under sub-section (1) shall be payable for each such report or certificate.
See the full 1961 to 2025 concordance.