Section 468 — Penalty for failure to comply with the provisions of section 397. Successor to s.272BB of the 1961 Act.
Section 468 is in Chapter XXI — Penalties, which runs from section 439 to section 472.
Sub-section (1) allows the Assessing Officer to impose a penalty of Rs. 10,000 on a person who fails to comply with the provisions of section 397. Sub-section (2) allows the same penalty where a person required to quote his Tax Deduction and Collection Account Number in the challans, certificates, statements or other documents referred to in section 397(1)(b) quotes a number that is false, knowing or believing it to be false or not true. Both limbs are framed as a power — the Assessing Officer "may" impose the penalty.
Section 397 works only if the account number is obtained and quoted accurately, since it is what links a payment to the deductor; the section penalises both the failure to comply and the deliberate quoting of a wrong number.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Penalty for failure to comply with section 397 | Rs. 10,000 | Imposable at the Assessing Officer's discretion | 468(1) |
| Penalty for quoting a false account number | Rs. 10,000 | Only where the number is quoted knowing or believing it to be false or not true — a mental element the sub-section (1) limb does not carry | 468(2) |
A failure under section 397 attracts a flat Rs. 10,000, and quoting a wrong Tax Deduction and Collection Account Number is separately exposed to the same amount where the person knew or believed the number to be false. A genuine mistake in the number is not within sub-section (2), which requires knowledge or belief, though the compliance failure limb in sub-section (1) may still be in play. The penalty is discretionary, so the circumstances of the failure are worth putting to the Assessing Officer.
A deductor leaves its Tax Deduction and Collection Account Number off the certificates and statements it issues through the year. Sub-section (1) lets the Assessing Officer impose Rs 10,000 for the failure to comply with section 397 — "may", not "shall", so the levy is a power and not automatic. If instead it quotes in those documents a number it knows or believes to be false, sub-section (2) supplies a separate Rs 10,000, but only on that mental element: a number that is simply wrong, quoted in good faith, does not fall within sub-section (2) at all.
You meet it as a penalty order of the Assessing Officer, made against the person who was required to quote the Tax Deduction and Collection Account Number in the challans, certificates, statements or other documents referred to in section 397(1)(b). The section names no form of its own — the documents in which the number belongs are those identified by section 397.
If a person fails to comply with the provisions of section 397, the Assessing Officer may impose a penalty of Rs. 10000 on him.
See the full 1961 to 2025 concordance.