The TDS officer has levied a penalty for a late quarterly statement. Which section applies — the daily penalty in section 272A(2)(k) or section 271H — and what gets me out of it?
It depends on when the tax was deducted or collected. For tax deducted or collected before 1 July 2012 the penalty is under section 272A(2)(k) at Rs 100 for every day of default, capped by the proviso at the amount of tax deductible or collectible. For tax deducted or collected on or after 1 July 2012 the second proviso to section 272A(2) bars that penalty altogether and section 271H applies instead — a sum of not less than Rs 10,000 and up to Rs 1,00,000, directed by the Assessing Officer, with an escape in section 271H(3) which since 1 April 2025 requires the statement to have been filed within ONE MONTH of the prescribed time, not one year.
Decided by the CBDT Circulars & Instructions (Not applicable — statutory text) on 2012-07-01, reported as Income-tax Act, 1961, section 271H inserted by the Finance Act, 2012 with effect from 1 July 2012, and as since amended by Act No. 25 of 2014 with effect from 1 October 2014 (sub-section (1)) and by Act No. 15 of 2024 with effect from 1 April 2025 (sub-section (3): 'month' substituted for 'year'); second proviso to section 272A(2) inserted by the Finance Act, 2012. It bears on section 271H, section 271H(1), section 271H(2), section 271H(3), section 271H(4), section 272A(2)(k), section 272A(2), section 200(3), section 206C(3), section 234E, section 273B, section 275 of the Income Tax Act 1961, in Penalty, TDS Defaults and How Tax Law Is Read matters.
Practitioners still argue late-statement penalties under the wrong section, and the boundary is set by the date of the deduction or collection, not the date the statement was filed or the date the penalty was levied. The escape route in section 271H(3) is the most useful thing on this shelf, but it has been cut hard. Until 31 March 2025 it gave a full year: if the deductor proved that after paying the tax deducted or collected together with the fee and the interest to the credit of the Central Government he delivered the statement before the expiry of one year from the prescribed time, no penalty could be levied for a failure under clause (a). The Finance (No. 2) Act 2024 substituted 'month' for 'year' with effect from 1 April 2025, so the window is now ONE MONTH. Advice carried over from the older commentary will be a year out. Note what the sub-section still requires: the tax, the section 234E fee and the interest must all have been paid, and the statement must have gone in within the window. Note also its limit — sub-section (3) protects only against the failure-to-deliver limb, not against the section 271H(1)(b) charge for furnishing incorrect information in a statement. Section 271H is also within section 273B, so reasonable cause is available on top.
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 271H, as printed on the department's current page, reads: '(1) Without prejudice to the provisions of the Act, the Assessing Officer may direct that a person shall pay by way of penalty, if, he— (a) fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C; or (b) furnishes incorrect information in the statement which is required to be delivered or caused to be delivered under sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C. (2) The penalty referred to in sub-section (1) shall be a sum which shall not be less than ten thousand rupees but which may extend to one lakh rupees. (3) Notwithstanding anything contained in the foregoing provisions of this section, no penalty shall be levied for the failure referred to in clause (a) of sub-section (1), if the person proves that after paying tax deducted or collected along with the fee and interest, if any, to the credit of the Central Government, he had delivered or cause to be delivered the statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C before the expiry of a period of one month from the time prescribed for delivering or causing to be delivered such statement. (4) The provisions of this section shall apply to a statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012.' The corresponding second proviso to section 272A(2), as reproduced in the Hyderabad Bench's order, reads: 'Provided further that no penalty shall be levied under this section for the failure referred to in clause (k), if such failure relates to a statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012.'
Statutory position — no holding is asserted; this entry reproduces statutory text. Section 272A(2)(k) and section 271H do not overlap. Section 271H applies only to statements to be delivered for tax deducted or collected on or after 1 July 2012, and for exactly those statements the second proviso to section 272A(2) bars a penalty under clause (k). For earlier deductions and collections, section 272A(2)(k) alone applies, at Rs 100 for every day the failure continues, capped by the first proviso at the tax deductible or collectible.
Sub-section (4) of section 271H fixes the field of the new penalty by reference to the date of the deduction or collection, not the date of the default or of the levy; the second proviso to section 272A(2) removes exactly the same field from clause (k), so that the two provisions are complementary rather than concurrent. Within section 271H the legislature also changed the character of the penalty: from a daily accrual capped by the tax involved, to a bracketed sum between Rs 10,000 and Rs 1,00,000, coupled with the relief in sub-section (3), which was designed to work alongside the section 234E fee — the Karnataka High Court described the fee's utility as 'giving privilege under Section 271H(3)'. Sub-section (3) is expressly confined to the clause (a) failure to deliver and does not reach the clause (b) charge of furnishing incorrect information.
Notwithstanding anything contained in the foregoing provisions of this section, no penalty shall be levied for the failure referred to in clause (a) of sub-section (1), if the person proves that after paying tax deducted or collected along with the fee and interest, if any, to the credit of the Central Government, he had delivered or cause to be delivered the statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C before the expiry of a period of one month from the time prescribed for delivering or causing to be delivered such statement.
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Handle my notice → Ask a CA on WhatsAppIt depends on when the tax was deducted or collected. For tax deducted or collected before 1 July 2012 the penalty is under section 272A(2)(k) at Rs 100 for every day of default, capped by the proviso at the amount of tax deductible or collectible. For tax deducted or collected on or after 1 July 2012 the second proviso to section 272A(2) bars that penalty altogether and section 271H applies instead — a sum of not less than Rs 10,000 and up to Rs 1,00,000, directed by the Assessing Officer, with an escape in section 271H(3) which since 1 April 2025 requires the statement to have been filed within ONE MONTH of the prescribed time, not one year. This was decided by the CBDT Circulars & Instructions (Not applicable — statutory text) and bears on section 271H, section 271H(1), section 271H(2), section 271H(3), section 271H(4), section 272A(2)(k), section 272A(2), section 200(3), section 206C(3), section 234E, section 273B, section 275 of the Income Tax Act 1961. It is reported as Income-tax Act, 1961, section 271H inserted by the Finance Act, 2012 with effect from 1 July 2012, and as since amended by Act No. 25 of 2014 with effect from 1 October 2014 (sub-section (1)) and by Act No. 15 of 2024 with effect from 1 April 2025 (sub-section (3): 'month' substituted for 'year'); second proviso to section 272A(2) inserted by the Finance Act, 2012. Practitioners still argue late-statement penalties under the wrong section, and the boundary is set by the date of the deduction or collection, not the date the statement was filed or the date the penalty was levied. The escape route in section 271H(3) is the most useful thing on this shelf, but it has been cut hard. Until 31 March 2025 it gave a full year: if the deductor proved that after paying the tax deducted or collected together with the fee and the interest to the credit of the Central Government he delivered the statement before the expiry of one year from the prescribed time, no penalty could be levied for a failure under clause (a). The Finance (No. 2) Act 2024 substituted 'month' for 'year' with effect from 1 April 2025, so the window is now ONE MONTH. Advice carried over from the older commentary will be a year out. Note what the sub-section still requires: the tax, the section 234E fee and the interest must all have been paid, and the statement must have gone in within the window. Note also its limit — sub-section (3) protects only against the failure-to-deliver limb, not against the section 271H(1)(b) charge for furnishing incorrect information in a statement. Section 271H is also within section 273B, so reasonable cause is available on top. If it applies to you, the first step is this: Fix the date of deduction or collection first, then pick the section: before 1 July 2012, section 272A(2)(k); on or after, section 271H.
Section 271H, as printed on the department's current page, reads: '(1) Without prejudice to the provisions of the Act, the Assessing Officer may direct that a person shall pay by way of penalty, if, he— (a) fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C; or (b) furnishes incorrect information in the statement which is required to be delivered or caused to be delivered under sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C. (2) The penalty referred to in sub-section (1) shall be a sum which shall not be less than ten thousand rupees but which may extend to one lakh rupees. (3) Notwithstanding anything contained in the foregoing provisions of this section, no penalty shall be levied for the failure referred to in clause (a) of sub-section (1), if the person proves that after paying tax deducted or collected along with the fee and interest, if any, to the credit of the Central Government, he had delivered or cause to be delivered the statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C before the expiry of a period of one month from the time prescribed for delivering or causing to be delivered such statement. (4) The provisions of this section shall apply to a statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012.' The corresponding second proviso to section 272A(2), as reproduced in the Hyderabad Bench's order, reads: 'Provided further that no penalty shall be levied under this section for the failure referred to in clause (k), if such failure relates to a statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012.' The matter was decided on 2012-07-01 by the CBDT Circulars & Instructions (Not applicable — statutory text). On those facts the CBDT Circulars & Instructions held as follows. Statutory position — no holding is asserted; this entry reproduces statutory text. Section 272A(2)(k) and section 271H do not overlap. Section 271H applies only to statements to be delivered for tax deducted or collected on or after 1 July 2012, and for exactly those statements the second proviso to section 272A(2) bars a penalty under clause (k). For earlier deductions and collections, section 272A(2)(k) alone applies, at Rs 100 for every day the failure continues, capped by the first proviso at the tax deductible or collectible.
Sub-section (4) of section 271H fixes the field of the new penalty by reference to the date of the deduction or collection, not the date of the default or of the levy; the second proviso to section 272A(2) removes exactly the same field from clause (k), so that the two provisions are complementary rather than concurrent. Within section 271H the legislature also changed the character of the penalty: from a daily accrual capped by the tax involved, to a bracketed sum between Rs 10,000 and Rs 1,00,000, coupled with the relief in sub-section (3), which was designed to work alongside the section 234E fee — the Karnataka High Court described the fee's utility as 'giving privilege under Section 271H(3)'. Sub-section (3) is expressly confined to the clause (a) failure to deliver and does not reach the clause (b) charge of furnishing incorrect information. In the words reproduced by the source cited on this page: "Notwithstanding anything contained in the foregoing provisions of this section, no penalty shall be levied for the failure referred to in clause (a) of sub-section (1), if the person proves that after paying tax deducted or collected along with the fee and interest, if any, to the credit of the Central Government, he had delivered or cause to be delivered the statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C before the expiry of a period of one month from the time prescribed for delivering or causing to be delivered such statement."
It was decided by the CBDT Circulars & Instructions on 2012-07-01 and is reported as Income-tax Act, 1961, section 271H inserted by the Finance Act, 2012 with effect from 1 July 2012, and as since amended by Act No. 25 of 2014 with effect from 1 October 2014 (sub-section (1)) and by Act No. 15 of 2024 with effect from 1 April 2025 (sub-section (3): 'month' substituted for 'year'); second proviso to section 272A(2) inserted by the Finance Act, 2012. 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 271H, section 271H(1), section 271H(2), section 271H(3), section 271H(4), section 272A(2)(k), section 272A(2), section 200(3), section 206C(3), section 234E, section 273B, section 275, 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. Statutory position — no holding is asserted; this entry reproduces statutory text. Section 272A(2)(k) and section 271H do not overlap. Section 271H applies only to statements to be delivered for tax deducted or collected on or after 1 July 2012, and for exactly those statements the second proviso to section 272A(2) bars a penalty under clause (k). For earlier deductions and collections, section 272A(2)(k) alone applies, at Rs 100 for every day the failure continues, capped by the first proviso at the tax deductible or collectible. It arises in Penalty, TDS Defaults and How Tax Law Is Read matters, on section 271H, section 271H(1), section 271H(2), section 271H(3), section 271H(4), section 272A(2)(k), section 272A(2), section 200(3), section 206C(3), section 234E, section 273B, section 275 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 the penalty notice cites section 272A(2)(k) for a statement relating to deduction on or after 1 July 2012, take the second proviso to section 272A(2) as a jurisdictional answer rather than arguing reasonable cause. For a section 271H penalty, test section 271H(3) before anything else, but check the date first: prove payment of the tax, the fee and the interest to the credit of the Central Government, and delivery of the statement within ONE MONTH of the prescribed date where the case is governed by the provision as it stands from 1 April 2025, or within one year for the position before that date. Where the section 271H(3) window was missed, fall back on section 273B — section 271H is one of the sections it names — and, separately, check the limitation under section 275, where a stand-alone statement penalty will usually run from the issue of the penalty notice. For pre-July-2012 quarters, work the proviso to section 272A(2): the penalty for each statement cannot exceed the tax deductible or collectible for that statement, which frequently reduces a large daily figure to a small one.
Still good law. Section 271H as set out here is the text in force: it was read on the department's own page carrying a 'Year: 2026' stamp, with the heading and Act name demanded and printed, and the sub-section (3) amendment cross-checked across the Year 2024 (No. 2), Year 2025 and Year 2026 pages, which carry the same footnote first prospectively and then as enacted. The second proviso to section 272A(2) was read on the department's current section 272A page and corroborated against a 2018 Tribunal reproduction. Anything in the older commentary describing the section 271H(3) relief as a one-year window states the law as it stood to 31 March 2025 only. 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.
Statutory entry, not a decision. 'tier' is set to 'cbdt' because the library's fixed tier vocabulary has no value for a statutory entry; the source is the Income-tax Department's own section pages. 'decided_on' is the date section 271H and the second proviso to section 272A(2) take effect — 1 July 2012 — not a decision date. SOURCING. Section 271H was read on incometaxindia.gov.in/w/section-271h-16, which prints the heading 'Penalty for failure to furnish statements, etc', names the Act as the Income-tax Act, 1961, places it in 'CHAPTER XXI - PENALTIES IMPOSABLE' and carries a 'Year: 2026' stamp. The second proviso to section 272A(2) was read on incometaxindia.gov.in/w/section-272a-52 (heading and Act name demanded and printed, 'Year: 2026'), and independently in the verbatim reproduction of section 272A in P. Murali Mohana Rao v Addl. CIT (ITAT Hyderabad, 6 June 2018); the Karnataka High Court describes the same bar in Fatheraj Singhvi v Union of India as reproduced in Junagade Healthcare Pvt. Ltd. v ACIT (CPC)(TDS) (ITAT Pune, 25 October 2018). TWO AMENDMENTS THAT ARCHIVED PAGES HIDE. First, the words 'the Assessing Officer may direct that a person shall pay by way of' were substituted for 'a person shall be liable to pay' in sub-section (1) by Act No. 25 of 2014 with effect from 1 October 2014. Second, and more important in practice, the word 'month' was substituted for 'year' in sub-section (3) by Act No. 15 of 2024 with effect from 1 April 2025, cutting the relief window from one year to one month; the department's Year 2024 (No. 2) page carries that change as a prospective footnote and the Year 2025 and Year 2026 pages carry it as enacted text. CAUTION: the bare page incometaxindia.gov.in/w/section-271h is ARCHIVED — 'Year: 2012' — and prints BOTH the pre-2014 sub-section (1) and the pre-2025 one-year sub-section (3). The bare page incometaxindia.gov.in/w/section-272a is also ARCHIVED — 'Year: 2000' — and still prints section 272A(1)(d) as 'fails to comply with the provisions of section 139A', the clause as it stood before it was re-inserted in its present form; neither bare page may be used. 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.
Statutory position — no holding is asserted; this entry reproduces statutory text. Section 272A(2)(k) and section 271H do not overlap. Section 271H applies only to statements to be delivered for tax deducted or collected on or after 1 July 2012, and for exactly those statements the second proviso to section 272A(2) bars a penalty under clause (k). For earlier deductions and collections, section 272A(2)(k) alone applies, at Rs 100 for every day the failure continues, capped by the first proviso at the tax deductible or collectible.
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