Section 271G of the Income Tax Act
Income-tax Act, 2025: s.457
Section 271G of the Income-tax Act, 1961 corresponds to section 457 (Penalty for failure to furnish information or document under section 171) of the Income-tax Act, 2025.
Read section 457 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 271G is CIT v. Shatrunjay Diamonds (261 ITR 258), cited in 50 of the 156 judgments on BharatTax that turn on this section.
Leading authorities on Section 271G
The assessee bears the initial burden to maintain and produce authentic documentation under Section 92D and Rule 10D to justify transactions with related parties, especially concerning the arm's length price for such transactions under Section 40A(2)(b). The discharge of this statutory obligation to maintain accurate data is a mandatory requirement of law.
Penalty under Section 271G cannot be imposed for mere technical lapses or non-compliance with transfer pricing documentation requirements if substantial compliance is demonstrated and the Assessing Officer (AO) or Transfer Pricing Officer (TPO) did not issue a specific requisition for particulars under Section 92D(3).
A penalty under section 271AA of the Income Tax Act is not leviable if the international transaction entered into by the assessee with its associate concern has been held to be at arm's length, especially when transfer pricing documentation was accepted for prior assessment years.
The requirement to furnish prescribed information under Section 92D(3) of the Income-tax Act arises only when the assessee fails to support its Arm's Length Price (ALP) with necessary evidence. There is no justification in demanding information first and then offering an opportunity to the assessee.
A penalty under section 271AA of the Income Tax Act, 1961, cannot be levied if no case is made out by the Assessing Officer. If the Commissioner (Appeals) has rightly deleted the penalty, no interference is required.
Penalty under section 271AA of the Income-tax Act cannot be levied if the Assessing Officer fails to make out a case for its imposition. In such circumstances, the deletion of penalty by the CIT(A) requires no interference.
Penalty under Section 271G cannot be imposed for failure to furnish segment-wise details of related and non-related party transactions in the diamond industry due to practical difficulties.
Penalty under Section 271AA of the Income-tax Act, 1961, cannot be levied if the Assessing Officer has not brought any specific default regarding the maintenance of requisite documents on record.
