Section 465 — Penalty for failure to answer questions, sign statements, furnish information, returns or statements, allow inspections, etc. Successor to s.272A of the 1961 Act.
Section 465 is in Chapter XXI — Penalties, which runs from section 439 to section 472.
Sub-section (1) imposes a penalty of Rs. 10,000 for each default where a person, being legally bound to state the truth on a matter touching his assessment, refuses to answer a question put by an income-tax authority; refuses to sign a statement he may legally be required to sign; having been summoned under section 246(1) to give evidence or produce books or documents, omits to attend or to produce them at the appointed place and time; or fails to comply with a notice under section 268(1) or 270(8) or a direction under section 268(5). Sub-section (2) imposes a penalty of Rs. 500 for every day a failure continues across thirteen listed obligations, including failure to comply with a notice under section 175(7), to give notice of discontinuance under section 320(3), to furnish in due time the returns, statements or particulars under sections 252, 397(3) or 507, to allow inspection of a register under section 255 or copies of it, to furnish the return of income required by section 263(1)(a)(iii) or (iv) in time and manner, to deliver declarations under section 393(7) or 394(3), to furnish a certificate under section 395(4), to deduct and pay tax under section 416(3), to furnish a statement under section 392(5)(a), and to deliver statements within the time under section 397(3)(b), (e) or (g)(i). Sub-section (3) caps the penalty at the amount of tax deductible or collectible for failures relating to a section 393(7) declaration, a section 395(4) certificate and statements under section 397(3)(b) or (e). Sub-section (4) allocates who imposes the penalty — the authority before whom the proceeding is pending if not below Joint Director or Joint Commissioner rank, the authority who issued the notice or direction in a sub-section (1)(d) case, the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner or Commissioner for a section 393(7) default, and the Joint Director or Joint Commissioner in any other case. Sub-section (5) widens "income-tax authority" for this section to include the Principal Director General, Director General, Principal Director, Director, Joint Director and Assistant or Deputy Director when exercising the civil court powers referred to in section 246(1).
The section backs the department's information-gathering and reporting requirements with a sanction, distinguishing a one-off refusal or non-attendance, penalised as a fixed sum per default, from a continuing failure to file or allow inspection, penalised by the day so that the cost rises until it is cured. The caps in sub-section (3) keep the daily accrual on deduction-related failures within the tax that was at stake.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Penalty for each sub-section (1) default | Rs. 10,000 | For each default or failure, so multiple refusals or non-attendances are separately penalised | 465(1) |
| Penalty for a continuing sub-section (2) failure | Rs. 500 for every day | Runs for as long as the failure continues, across all thirteen listed obligations | 465(2) |
| Cap on the penalty for specified deduction-related failures | The amount of tax deductible or collectible | Applies only to a section 393(7) declaration, a section 395(4) certificate, and statements under section 397(3)(b) or (e); the other sub-section (2) failures carry no such cap in this section | 465(3) |
The Rs. 500 a day runs from the due date until the filing, delivery or inspection actually happens, so the sum is a function of delay and the only way to stop it is to comply. Only three of the thirteen continuing failures carry the tax-based ceiling in sub-section (3) — a declaration under section 393(7), a certificate under section 395(4) and statements under section 397(3)(b) or (e) — so for the remainder the daily accrual is not bounded by this section. On the sub-section (1) side, each refusal to answer, refusal to sign, non-attendance on summons or non-compliance with a notice or direction is a separate Rs. 10,000. Who levies it depends on the default: a section 268 notice or direction default is dealt with by the authority that issued it, a section 393(7) default by the Commissioner-level authority, and everything else by the Joint Director or Joint Commissioner unless the default occurred before a higher-ranked authority in a proceeding.
A person summoned under section 246(1) fails to attend on two occasions and refuses to sign a statement an income-tax authority may legally require him to sign: three separate defaults, and sub-section (1) charges Rs. 10,000 for each of them, Rs. 30,000 in all, rather than one aggregate sum. Separately, he is 100 days late in delivering a statement under section 397(3)(b) on which the tax deductible was Rs. 20,000; the daily penalty of Rs. 500 would come to Rs. 50,000, but sub-section (3) caps it at the amount of tax deductible, Rs. 20,000. Had the same 100-day delay been in giving notice of discontinuance under section 320(3) or in allowing inspection of a register referred to in section 255, no such cap applies in this section and the Rs. 50,000 would stand in full. The daily charge stops only on compliance, so the only way to hold the figure down is to file, deliver or allow inspection.
In a penalty order — made by the authority before whom the proceeding was pending if that authority is not below the rank of Joint Director or Joint Commissioner, by the authority that issued the notice or direction in a sub-section (1)(d) case, by the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner or Commissioner for the section 393(7) declaration default, and otherwise by the Joint Director or Joint Commissioner. The defaults themselves surface in summonses, notices and the due dates of the returns, statements, declarations and certificates listed in sub-section (2).
A person shall be liable to pay a penalty of Rs. 500 for every day during which the following failures continue
See the full 1961 to 2025 concordance.
See the circulars index.