Section 273B of the Income Tax Act

Income-tax Act, 2025: s.470

Section 273B of the Income-tax Act, 1961 corresponds to section 470 (Penalty not to be imposed in certain cases) of the Income-tax Act, 2025.

Read section 470 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 273B is Ashok Pai v. CIT (292 ITR 11), cited in 812 of the 2,226 judgments on BharatTax that turn on this section.

Leading authorities on Section 273B

Ashok Pai v. CIT
292 ITR 11 · 2007 · Supreme Court
812
citing judgments

“Concealment of particulars of income” and “furnishing inaccurate particulars of income” are two distinct offences under Section 271(1)(c) of the Income Tax Act. A penalty cannot be levied under one limb if the show cause notice or basis for penalty specifies the other, as this constitutes a complete variance in the reasons for assuming jurisdiction.

Hindustan Steel Ltd. v. State of Orissa
83 ITR 26 · 1972 · Supreme Court
502
citing judgments

An order imposing penalty for failure to carry out a statutory obligation results from quasi-criminal proceedings. Penalty is not ordinarily imposed unless the party acted deliberately in defiance of law, was guilty of contumacious or dishonest conduct, or acted in conscious disregard of their obligation.

CIT v. Eli Lily & Co.
312 ITR 225 · 2009 · Supreme Court
221
citing judgments

Section 195 of the Income Tax Act, which mandates tax withholding on payments to non-residents, applies only to sums that are otherwise chargeable to tax under the Act. Tax withholding provisions are not charging provisions.

Commissioner of Income Tax v. Noida Toll Bridge Co. Ltd.
262 ITR 260 · 2003 · High Court
121
citing judgments

Journal entries for accepting or repaying loans and deposits, without any actual cash transaction, do not violate the provisions of Section 269SS or Section 269T of the Income Tax Act. Consequently, such transactions do not attract penalties under Section 271D or Section 271E.

Commissioner of Income Tax v. Triumph International Finance (I) Ltd.
345 ITR 270 · 2012 · High Court
114
citing judgments

Transactions involving the receipt or repayment of loans or deposits solely through journal entries, without actual cash movement, contravene Sections 269SS and 269T. However, penalties under Sections 271D or 271E for such contraventions are not imposable if the assessee demonstrates a reasonable cause under Section 273B, particularly when no cash has passed between parties.

CIT v. S.K. Gupta & Co.
322 ITR 86 · 2010 · High Court
110
citing judgments

If a penalty is levied under Section 271A for failure to maintain books of account, then a separate penalty under Section 271B for failure to get accounts audited under Section 44AB cannot also be levied.

CIT v. Jai Laxmi Rice Mills
379 ITR 521 · 2015 · Supreme Court
110
citing judgments

The assessing officer must record explicit satisfaction in the assessment order for initiating penalty proceedings under sections like 271D, 271E, 269SS, 269T, or 269ST; a mere recommendation or information to another authority is insufficient to validate the penalty.

CIT v. NHK Japan Broadcasting Corporation
305 ITR 137 · 2008 · High Court
96
citing judgments

When no specific statutory period of limitation exists, proceedings under Section 201(1) and 201(1A) of the Income-tax Act, particularly for payments to non-residents, must be initiated within a reasonable period of four years. This limitation also applies to consequential penalty proceedings under Section 271C.

Asst. Director of Inspection (Investigation) v. Kum. A.B. Shanthi
255 ITR 258 · 2002 · Supreme Court
61
citing judgments

The Supreme Court upholds the constitutional validity of Section 269SS of the Income Tax Act, 1961, which prohibits certain cash loans and deposits. This ruling is foundational for penalties under Section 271D and considering exemptions under Section 273B.

Azadi Bachao Andolan v. Union of India
252 ITR 471 · 2001 · High Court
57
citing judgments

A penalty under sections like 271D or 271E is not automatically imposed if the assessee proves there was a reasonable cause for the failure. The interpretation of 'reasonable cause' is that which would prevent a person of average intelligence and ordinary prudence from acting negligently or in bad faith.

Judgments on Section 273B

Off Shore India Limited, Karnataka vs. DCIT, Cir-4, Kolkata

In the result, the appeal of the assessee is allowed

ITA 720/KOL/2014[2003-2004]Status: DisposedITAT Kolkata22 Sept 2017AY 2003-2004

Bench: Shri P.M. Jagtap, Am & Shri S.S. Viswanethra Ravi, Jm] I.T.A. No. 720/Kol/2014 Assessment Year: 2003-04 Off-Shore India Limited.............................……………………………………………Appellant (In The Case Of Astor Dealers Pvt. Ltd. – Since Amalgamated) 31, Netaji Subhas Road, 4Th Floor Kolkata - 700001 [Pan : Aacca5565B] D.C.I.T., Circle-4………………………………………………...........................................Respondent P-7, Chowringhee Square Kolkata - 700069 Appearances By: Shri P.J. Bhide, Fca Appearing On Behalf Of The Assessee. Shri Kalyan Nath, Addl. Cit Appearing On Behalf Of The Revenue. Date Of Concluding The Hearing : September 11, 2017 Date Of Pronouncing The Order : September 22, 2017 Order Per P.M. Jagtap, Am This Appeal Filed By The Assessee Is Directed Against The Order Of Ld. Cit (Appeals) – Xii, Kolkata Dated 14.02.2014 Whereby He Confirmed The Penalty Of Rs. 1,00,000/- Imposed By The Ao Under Section 271B Of The Income Tax Act, 1961. 2. The Assessee In The Present Case Is A Company & As Per Its Memorandum Of Assets, It Is Engaged In The Business Of Investment In Debentures & Shares. Although The Securities Held By It Were Shown At Investment By The Assessee Company In The Balance Sheet, The Profit Or Loss Arising From The Purchase & Sale Of Such Securities Was Treated As Business Income. During The Course Of Assessment

Section 271BSection 44A

Sukanta Bardhan, Kolkata vs. JCIT, Range-2, Hooghly

In the result, the appeal filed by the assessee is allowed

ITA 200/KOL/2015[2009-2010]Status: DisposedITAT Kolkata30 Aug 2017AY 2009-2010

Bench: Shri N. V. Vasudevan, Jm & Dr. A.L.Saini, Am आयकर अपील सं./Ita No.200/Kol/2015 (िनधा"रण वष" / Assessment Year: 2009-10 Vs. J.C.I.T, Range – 2, Hooghly Sukanta Bardhan C/O S.N. Ghosh & Associates, Advocates, Seven Brothers Lodge, P.O. Buroshibtala. P.S. Chinsurah, Dist. Hooghly. Pin- 712105. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Adlpb 3978 J (Appellant) .. (Respondent) Appellant By :Shri Somnath Ghosh, Advocate Respondent By :Shri Kalyannath, Addl. Cit, Sr. Dr सुनवाई क" तारीख / Date Of Hearing : 13/07/2017 घोषणा क" तारीख/Date Of Pronouncement : 30/08/2017 आदेश / O R D E R Per Dr. Arjun Lal Saini, Am: The Captioned Appeal Filed By The Assessee, Pertaining To Assessment Year 2009-10, Is Directed Against The Order Passed By The Ld. Commissioner Of Income Tax (Appeals) – 6, Kolkata, In Appeal No.10/Cit(A)-6/Kol/12-13, Dated 29.01.2015, Which In Turn Arises Out Of An Order Passed By The Ao U/S.271D Of The Income Tax Act 1961, (Hereinafter Referred To As The ‘Act’) Dated 29.03.2012. 2. The Brief Facts Qua The Assessee Are That The Assessee Filed Its Return Of Income For The A.Y 2009-10 On 27.09.2009. The Assessee’S Return Was Processed U/S.143(1), Dated 30.07.2010. Subsequently, The Sukanta Bardhan

For Appellant: Shri Somnath Ghosh, AdvocateFor Respondent: Shri Kalyannath, Addl. CIT, Sr. DR
Section 143(1)Section 143(2)Section 269SSection 271DSection 273B