Section 271GB(2) — the law in short
What the courts have decided on section 271GB(2), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Statutory position — s.271GB: the country-by-country penalties are DAILY and they escalate — Rs 5,000, then Rs 15,000, then Rs 50,000 a day after the penalty order is served — plus Rs 5 lakh for an inaccurate report, and the s.273B reasonable-cause defence that applies to all of them
CBDT Circulars & InstructionsCuts both ways
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.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.