We missed the country-by-country report deadline. What is the exposure, and does it stop accruing once the department passes an order?
It does not stop; it gets worse. Section 271GB(1) penalises a reporting entity that fails to furnish the s.286(2) report at "five thousand rupees for every day for which the failure continues, if the period of failure does not exceed one month" and "fifteen thousand rupees for every day for which the failure continues beyond the period of one month". Section 271GB(2) penalises failure to produce information and documents within the period allowed under s.286(6) at five thousand rupees a day, running from the day immediately following the day the period expires. Section 271GB(3) is the escalation: if the failure under sub-section (1) or (2) continues AFTER an order directing payment of the penalty has been served, then notwithstanding sub-sections (1) and (2) the prescribed authority may direct payment of "fifty thousand rupees for every day for which such failure continues beginning from the date of service of such order". Section 271GB(4) imposes a flat penalty of five lakh rupees for inaccurate information in the report in three situations — knowledge of the inaccuracy at the time of furnishing coupled with failure to inform the prescribed authority; discovery after furnishing coupled with failure to inform and to furnish a correct report within fifteen days of discovery; and furnishing inaccurate information or documents in response to a s.286(6) notice. Section 273B names s.271GB, so no penalty is imposable under it if the entity proves there was reasonable cause for the failure.
Decided by the CBDT Circulars & Instructions (Not applicable — statutory text), reported as Section 271GB of the Income-tax Act, 1961, transcribed from incometaxindia.gov.in/w/section-271gb (heading "Penalty for failure to furnish report or for furnishing inaccurate report under section 286", Year: 2016) and sub-sections (1) to (3) read again on incometaxindia.gov.in/w/section-271gb-2 (Year: 2020); s.273B read on incometaxindia.gov.in/w/section-273b-30 (Year: 2017). It bears on section 271GB, section 271GB(1), section 271GB(2), section 271GB(3), section 271GB(4), section 286, section 286(2), section 286(6), section 273B of the Income Tax Act 1961, in Penalty, Appeals and How Tax Law Is Read matters.
The arithmetic is the point. Three months of default under sub-section (1) is roughly Rs 1,50,000 for the first month and Rs 15,000 a day thereafter — about Rs 10 lakh — and once a penalty order is served and the report is still not filed, the meter runs at Rs 50,000 a day with no cap written into the section. There is no maximum anywhere in s.271GB. The practical lesson is that the single most valuable thing to do after a default is discovered is to FILE, because every provision here is framed around a failure that "continues". Sub-section (4) rewards self-correction in the same way: an entity that discovers an inaccuracy after filing escapes the five lakh rupee penalty if it informs the prescribed authority AND furnishes a correct report within fifteen days of the discovery, so the fifteen-day window is worth diarising the moment an error is found. And because s.273B covers s.271GB, reasonable cause is a complete answer — but it has to be proved by the entity, so the contemporaneous record of why the report could not be filed (a parent that would not release group data, an exchange relationship that was not in place, a systemic failure intimation) is what wins the penalty appeal.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
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Section 271GB, as printed on the departmental page stamped Year 2016, reads: "271GB. (1) If any reporting entity referred to in section 286, which is required to furnish the report referred to in sub-section (2) of the said section, in respect of a reporting accounting year, fails to do so, the authority prescribed under that section (herein referred to as prescribed authority) may direct that such entity shall pay, by way of penalty, a sum of,— (a) five thousand rupees for every day for which the failure continues, if the period of failure does not exceed one month; or (b) fifteen thousand rupees for every day for which the failure continues beyond the period of one month. (2) Where any reporting entity referred to in section 286 fails to produce the information and documents within the period allowed under sub-section (6) of the said section, the prescribed authority may direct that such entity shall pay, by way of penalty, a sum of five thousand rupees for every day during which the failure continues, beginning from the day immediately following the day on which the period for furnishing the information and document expires. (3) If the failure referred to in sub-section (1) or sub-section (2) continues after an order has been served on the entity, directing it to pay the penalty under sub-section (1) or, as the case may be, under sub-section (2), then, notwithstanding anything contained in sub-section (1) or sub-section (2), the prescribed authority may direct that such entity shall pay, by way of penalty, a sum of fifty thousand rupees for every day for which such failure continues beginning from the date of service of such order. (4) Where a reporting entity referred to in section 286 provides inaccurate information in the report furnished in accordance with sub-section (2) of the said section and where— (a) the entity has knowledge of the inaccuracy at the time of furnishing the report but fails to inform the prescribed authority; or (b) the entity discovers the inaccuracy after the report is furnished and fails to inform the prescribed authority and furnish correct report within a period of fifteen days of such discovery; or (c) the entity furnishes inaccurate information or document in response to the notice issued under sub-section (6) of section 286, then, the prescribed authority may direct that such person shall pay, by way of penalty, a sum of five lakh rupees." Section 273B, on the departmental page stamped Year 2017, provides that notwithstanding the provisions there listed — a list that includes s.271AA, s.271G, s.271GA and s.271GB — "no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure".
Not a judgment. The statutory position is that failure to furnish the s.286(2) report attracts a penalty of Rs 5,000 per day for the first month and Rs 15,000 per day thereafter; failure to produce information within the period allowed under s.286(6) attracts Rs 5,000 per day from the day after that period expires; continuance of either failure after service of a penalty order attracts Rs 50,000 per day from the date of service, notwithstanding the earlier rates; inaccurate information in the report attracts a flat penalty of Rs 5,00,000 in the three situations in sub-section (4); and that by s.273B no penalty under s.271GB is imposable if the entity proves reasonable cause for the failure.
Not a judgment; no judicial reasoning is stated for the section.
(3) If the failure referred to in sub-section (1) or sub-section (2) continues after an order has been served on the entity, directing it to pay the penalty under sub-section (1) or, as the case may be, under sub-section (2), then, notwithstanding anything contained in sub-section (1) or sub-section (2), the prescribed authority may direct that such entity shall pay, by way of penalty, a sum of fifty thousand rupees for every day for which such failure continues beginning from the date of service of such order.
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Handle my notice → Ask a CA on WhatsAppIt does not stop; it gets worse. Section 271GB(1) penalises a reporting entity that fails to furnish the s.286(2) report at "five thousand rupees for every day for which the failure continues, if the period of failure does not exceed one month" and "fifteen thousand rupees for every day for which the failure continues beyond the period of one month". Section 271GB(2) penalises failure to produce information and documents within the period allowed under s.286(6) at five thousand rupees a day, running from the day immediately following the day the period expires. Section 271GB(3) is the escalation: if the failure under sub-section (1) or (2) continues AFTER an order directing payment of the penalty has been served, then notwithstanding sub-sections (1) and (2) the prescribed authority may direct payment of "fifty thousand rupees for every day for which such failure continues beginning from the date of service of such order". Section 271GB(4) imposes a flat penalty of five lakh rupees for inaccurate information in the report in three situations — knowledge of the inaccuracy at the time of furnishing coupled with failure to inform the prescribed authority; discovery after furnishing coupled with failure to inform and to furnish a correct report within fifteen days of discovery; and furnishing inaccurate information or documents in response to a s.286(6) notice. Section 273B names s.271GB, so no penalty is imposable under it if the entity proves there was reasonable cause for the failure. This was decided by the CBDT Circulars & Instructions (Not applicable — statutory text) and bears on section 271GB, section 271GB(1), section 271GB(2), section 271GB(3), section 271GB(4), section 286, section 286(2), section 286(6), section 273B of the Income Tax Act 1961. It is reported as Section 271GB of the Income-tax Act, 1961, transcribed from incometaxindia.gov.in/w/section-271gb (heading "Penalty for failure to furnish report or for furnishing inaccurate report under section 286", Year: 2016) and sub-sections (1) to (3) read again on incometaxindia.gov.in/w/section-271gb-2 (Year: 2020); s.273B read on incometaxindia.gov.in/w/section-273b-30 (Year: 2017). The arithmetic is the point. Three months of default under sub-section (1) is roughly Rs 1,50,000 for the first month and Rs 15,000 a day thereafter — about Rs 10 lakh — and once a penalty order is served and the report is still not filed, the meter runs at Rs 50,000 a day with no cap written into the section. There is no maximum anywhere in s.271GB. The practical lesson is that the single most valuable thing to do after a default is discovered is to FILE, because every provision here is framed around a failure that "continues". Sub-section (4) rewards self-correction in the same way: an entity that discovers an inaccuracy after filing escapes the five lakh rupee penalty if it informs the prescribed authority AND furnishes a correct report within fifteen days of the discovery, so the fifteen-day window is worth diarising the moment an error is found. And because s.273B covers s.271GB, reasonable cause is a complete answer — but it has to be proved by the entity, so the contemporaneous record of why the report could not be filed (a parent that would not release group data, an exchange relationship that was not in place, a systemic failure intimation) is what wins the penalty appeal. If it applies to you, the first step is this: File the report first and argue afterwards. Every limb of s.271GB(1), (2) and (3) is measured by the number of days the failure continues, so the exposure is arrested only by compliance, not by correspondence.
Section 271GB, as printed on the departmental page stamped Year 2016, reads: "271GB. (1) If any reporting entity referred to in section 286, which is required to furnish the report referred to in sub-section (2) of the said section, in respect of a reporting accounting year, fails to do so, the authority prescribed under that section (herein referred to as prescribed authority) may direct that such entity shall pay, by way of penalty, a sum of,— (a) five thousand rupees for every day for which the failure continues, if the period of failure does not exceed one month; or (b) fifteen thousand rupees for every day for which the failure continues beyond the period of one month. (2) Where any reporting entity referred to in section 286 fails to produce the information and documents within the period allowed under sub-section (6) of the said section, the prescribed authority may direct that such entity shall pay, by way of penalty, a sum of five thousand rupees for every day during which the failure continues, beginning from the day immediately following the day on which the period for furnishing the information and document expires. (3) If the failure referred to in sub-section (1) or sub-section (2) continues after an order has been served on the entity, directing it to pay the penalty under sub-section (1) or, as the case may be, under sub-section (2), then, notwithstanding anything contained in sub-section (1) or sub-section (2), the prescribed authority may direct that such entity shall pay, by way of penalty, a sum of fifty thousand rupees for every day for which such failure continues beginning from the date of service of such order. (4) Where a reporting entity referred to in section 286 provides inaccurate information in the report furnished in accordance with sub-section (2) of the said section and where— (a) the entity has knowledge of the inaccuracy at the time of furnishing the report but fails to inform the prescribed authority; or (b) the entity discovers the inaccuracy after the report is furnished and fails to inform the prescribed authority and furnish correct report within a period of fifteen days of such discovery; or (c) the entity furnishes inaccurate information or document in response to the notice issued under sub-section (6) of section 286, then, the prescribed authority may direct that such person shall pay, by way of penalty, a sum of five lakh rupees." Section 273B, on the departmental page stamped Year 2017, provides that notwithstanding the provisions there listed — a list that includes s.271AA, s.271G, s.271GA and s.271GB — "no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure". It was decided by the CBDT Circulars & Instructions (Not applicable — statutory text). On those facts the CBDT Circulars & Instructions held as follows. Not a judgment. The statutory position is that failure to furnish the s.286(2) report attracts a penalty of Rs 5,000 per day for the first month and Rs 15,000 per day thereafter; failure to produce information within the period allowed under s.286(6) attracts Rs 5,000 per day from the day after that period expires; continuance of either failure after service of a penalty order attracts Rs 50,000 per day from the date of service, notwithstanding the earlier rates; inaccurate information in the report attracts a flat penalty of Rs 5,00,000 in the three situations in sub-section (4); and that by s.273B no penalty under s.271GB is imposable if the entity proves reasonable cause for the failure.
Not a judgment; no judicial reasoning is stated for the section. In the words reproduced by the source cited on this page: "(3) If the failure referred to in sub-section (1) or sub-section (2) continues after an order has been served on the entity, directing it to pay the penalty under sub-section (1) or, as the case may be, under sub-section (2), then, notwithstanding anything contained in sub-section (1) or sub-section (2), the prescribed authority may direct that such entity shall pay, by way of penalty, a sum of fifty thousand rupees for every day for which such failure continues beginning from the date of service of such order."
It was decided by the CBDT Circulars & Instructions and is reported as Section 271GB of the Income-tax Act, 1961, transcribed from incometaxindia.gov.in/w/section-271gb (heading "Penalty for failure to furnish report or for furnishing inaccurate report under section 286", Year: 2016) and sub-sections (1) to (3) read again on incometaxindia.gov.in/w/section-271gb-2 (Year: 2020); s.273B read on incometaxindia.gov.in/w/section-273b-30 (Year: 2017). Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section 271GB, section 271GB(1), section 271GB(2), section 271GB(3), section 271GB(4), section 286, section 286(2), section 286(6), section 273B, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. Not a judgment. The statutory position is that failure to furnish the s.286(2) report attracts a penalty of Rs 5,000 per day for the first month and Rs 15,000 per day thereafter; failure to produce information within the period allowed under s.286(6) attracts Rs 5,000 per day from the day after that period expires; continuance of either failure after service of a penalty order attracts Rs 50,000 per day from the date of service, notwithstanding the earlier rates; inaccurate information in the report attracts a flat penalty of Rs 5,00,000 in the three situations in sub-section (4); and that by s.273B no penalty under s.271GB is imposable if the entity proves reasonable cause for the failure. It arises in Penalty, Appeals and How Tax Law Is Read matters, on section 271GB, section 271GB(1), section 271GB(2), section 271GB(3), section 271GB(4), section 286, section 286(2), section 286(6), section 273B of the Income Tax Act 1961, and was decided by Not applicable — statutory text. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. If a penalty order under sub-section (1) or (2) has been served and you are still not compliant, treat it as an emergency: sub-section (3) raises the rate to fifty thousand rupees a day from the date of service, and the section prescribes no ceiling. The moment an inaccuracy in a filed report is discovered, start the fifteen-day clock in s.271GB(4)(b): inform the prescribed authority and furnish a correct report within fifteen days, and record the date of discovery. Build the reasonable-cause case under s.273B contemporaneously — correspondence with the parent entity, the absence of an exchange agreement, any systemic failure intimation — because s.273B requires the entity to PROVE reasonable cause. Check who is imposing the penalty. Section 271GB places the power in "the prescribed authority" under s.286, not in the Assessing Officer, and an order passed by the wrong authority is open to challenge.
Still good law. The text is current so far as I could establish: two departmental pages with different "Year:" stamps (2016 and 2020) print sub-sections (1) to (3) identically, and neither carries an amendment footnote. I probed no suffix above /w/section-271gb-2, so a later version cannot be excluded. Judicial treatment: an exact-phrase search on indiankanoon for "section 271GB" returned no decision imposing, reducing or setting aside a penalty under the section and none construing it; that is what my search found, not a certification that no such decision exists. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Section 271GB was transcribed in full from incometaxindia.gov.in/w/section-271gb, which prints the Income-tax Act, 1961, the heading "Penalty for failure to furnish report or for furnishing inaccurate report under section 286" and "Year: 2016", and sub-sections (1), (2) and (3) were transcribed again from incometaxindia.gov.in/w/section-271gb-2 (Year: 2020) and came back in identical words. Neither page carries a footnote dating the insertion of the section, so `decided_on` is null: the text is verified and only its commencement is not. The s.273B point was checked separately on incometaxindia.gov.in/w/section-273b-30, which prints the heading "Penalty not to be imposed in certain cases" and "Year: 2017" and lists "section 271GA, section 271GB, section 271H" among the provisions to which the reasonable-cause relief applies; the older page /w/section-273b-16 (Year: 2006) does NOT list s.271GB and must not be used. I searched indiankanoon for decided cases on s.271GB using the exact phrase "section 271GB" and found none: the only returns were bare-act pages, one page of the Income-tax Act, 2025, and four Kerala High Court co-operative-bank orders and two Tribunal orders in which the string appears only inside the list of sections in s.273B. So the narrow negative I can state honestly is this — I found NO decision imposing, reducing or setting aside a penalty under s.271GB, and no decision construing any of its sub-sections. That is a search result, not a finding that none exists. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Not a judgment. The statutory position is that failure to furnish the s.286(2) report attracts a penalty of Rs 5,000 per day for the first month and Rs 15,000 per day thereafter; failure to produce information within the period allowed under s.286(6) attracts Rs 5,000 per day from the day after that period expires; continuance of either failure after service of a penalty order attracts Rs 50,000 per day from the date of service, notwithstanding the earlier rates; inaccurate information in the report attracts a flat penalty of Rs 5,00,000 in the three situations in sub-section (4); and that by s.273B no penalty under s.271GB is imposable if the entity proves reasonable cause for the failure.
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You took a cash loan and now face penalty equal to the whole amount. Is there any relief?
Must penalty be imposed just because the law permits it?
The financier insisted on cash. Can they penalise me under 271E for repaying the loan in cash?
We had no reportable transactions and filed no SFT. Can they still levy penalty under 271FA?