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

Anunoy Mukherjee, Durgapur vs. I.T.O., Ward-1(4), Durgapur

In the result, appeal of the assessee is allowed

ITA 555/KOL/2022[2017-2018]Status: DisposedITAT Kolkata23 Feb 2023AY 2017-2018

Bench: Shri Sanjay Garg, Hon’Ble & Dr. Manish Borad, Hon’Blei.T.A. No. 555/Kol/2022 Assessment Year: 2017-18 Anunoy Mukherjee Income Tax Officer, Ward-1 Vs (4), Durgapur Near Hdfc Bank Bamunara Kanksa Durgapur - 713212 [Pan : Cydpm3295A] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri Vishal Kr. Agrawal, C.A. & Shri Rohitash Gupta, C.A. Revenue By : Shri P.P. Barman, Addl. Cit, Sr. D/R सुनवाई क" तार"ख/Date Of Hearing : 16/02/2023 घोषणा क" तार"ख /Date Of Pronouncement: 23/02/2023 आदेश/O R D E R Per Dr. Manish Borad: The Present Appeal Is Directed At The Instance Of The Assessee Against The Order Of The National Faceless Appeal Centre, Delhi (Hereinafter The “Ld. Cit(A)”) Dated 21/07/2022, Passed U/S 250 Of The Income Tax Act, 1961 (‘The Act’), For Assessment Year 2017-18. 2. The Registry Has Pointed Out That There Is A Delay Of One (1) Day In Filing Of This Appeal In Time Before The Tribunal. The Assessee Has Filed A Petition For Condonation Of Delay Stating The Reasons Of Delay. After Perusing The Same, We Find That The Assessee Was Prevented By Sufficient Cause From Filing The Appeal In Time Before The Tribunal. Hence, The Delay Is Condoned & The Appeal Is Admitted. 3. The Only Issue That Arises For Our Consideration Is Whether The Ld. Cit(A) Was Justified In Confirming The Penalty U/S 271B Of The Act At Rs.1,36,214/-, Levied For Not Getting The Books Of Account Audited U/S 44Ab Of The Act.

For Appellant: Shri Vishal Kr. Agrawal, C.A. & ShriFor Respondent: Shri P.P. Barman, Addl. CIT, Sr. D/R
Section 194CSection 250Section 271Section 271ASection 271BSection 271CSection 271DSection 271ESection 271FSection 271G

Pranab Gohain, Dibrugarh vs. Income Tax Office, Ward-1(2, Dibrugarh

In the result, appeal of the assessee is dismissed

ITA 197/GTY/2019[2016-17]Status: DisposedITAT Guwahati20 Feb 2023AY 2016-17

Bench: Shri Rajpal Yadav, Hon’Ble & Dr. Manish Borad, Hon’Blei.T.A. No. 197/Gty/2019 Assessment Year: 2016-17 Pranab Gohain Ito, Ward-1(2), Jiban Phukan Nagar Vs Dibrugarh Dibrugarh – 786003 (Assam) [Pan : Acqpg7405H] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : None Revenue By : Shri N.T. Sherpa, Jcit सुनवाई क" तारीख/Date Of Hearing : 09/01/2023 घोषणा क" तारीख /Date Of Pronouncement: 20/02/2023 आदेश/O R D E R Per Dr. Manish Borad: The Present Appeal Is Directed At The Instance Of The Assessee Against The Order Of The Learned Commissioner Of Income Tax (Appeals), Dibrugarh, (Hereinafter The “Ld. Cit(A)”) Dt. 26/02/2019, Passed U/S 250 Of The Income Tax Act, 1961 (“The Act’), For Assessment Year 2016-17. 2. None Appeared On Behalf Of The Assessee. Under These Circumstances, We Dispose Off The Case Ex-Parte On Merits Qua The Assessee After Hearing The Ld. Departmental Representative. 3. Heard The Ld. D/R. The Only Issues Raised In The Instant Appeal Is Against The Levy Of Penalty U/S 271B Of The Act. As Per The Provisions Of Section 271B Of The Act, If Any Person Fails To Get His Accounts Audited In Respect Of Any Previous Year Or Years Relevant To An Assessment Year, Or Fails To Furnish A Report Of Such Audit As Required U/S 44Ab Of The Act, The Assessing Officer May Direct That Such Person Shall Pay By Way Of Penalty A Sum Equal To ½ % Of The Total Sales, Turnover Or Gross Receipts, As The Case May Be Or A Sum Of Rs.1,50,000/- Whichever Is Less.

For Appellant: NoneFor Respondent: Shri N.T. Sherpa, JCIT
Section 250Section 271BSection 273BSection 44A