Penalty for failure to furnish statements, etc.

464

The Assessing Officer may impose a penalty which shall not be less than ten thousand rupees but which may extend up to one lakh rupees on—

• (a) the research association, University, college or other institution referred to in section 45, if it fails to deliver or furnish the documents as prescribed under section 45(4)(a); or
• (b) the institution or fund, if it fails to deliver or cause to be delivered a statement within the time prescribed under section 354(1)(e) or (f), or furnish a certificate prescribed under section 354(1)(g).

Explanation

Section Summary:

Section 464 of the Income Tax Act imposes penalties on specific entities, such as research associations, universities, colleges, or other institutions, as well as institutions or funds, for failing to furnish or deliver required statements, documents, or certificates within the prescribed time. The penalty ranges from a minimum of ₹10,000 to a maximum of ₹1,00,000, depending on the nature of the non-compliance.

Key Changes:

This section introduces a specific penalty framework for non-compliance by certain entities, particularly those referred to in Section 45 (research associations, universities, etc.) and Section 354 (institutions or funds). Previously, penalties for such failures may have been less explicitly defined or applied under broader penalty provisions.

Practical Implications:

• For Research Associations, Universities, and Colleges: These entities must ensure timely submission of documents or statements as required under Section 45(4)(a). Failure to do so could result in penalties ranging from ₹10,000 to ₹1,00,000.
• For Institutions or Funds: These entities must deliver statements or furnish certificates as mandated under Section 354(1)(e), (f), or (g). Non-compliance will attract similar penalties.
• Compliance Burden: Entities must maintain proper records and adhere to deadlines to avoid penalties. This may require additional administrative efforts to ensure timely submissions.

Critical Concepts:

• Section 45(4)(a): Pertains to the requirement for research associations, universities, colleges, or other institutions to furnish specific documents.
• Section 354(1)(e), (f), (g): Relates to the obligations of institutions or funds to deliver statements or furnish certificates within the prescribed time.
• Penalty Range: The penalty is discretionary within the range of ₹10,000 to ₹1,00,000, depending on the severity of the non-compliance.

Compliance Steps:

1. Identify Obligations: Determine which documents, statements, or certificates are required under Section 45(4)(a) or Section 354(1)(e), (f), or (g).
2. Maintain Records: Ensure all necessary records are maintained and readily available for submission.
3. Timely Submission: Adhere to the deadlines prescribed for furnishing or delivering the required documents.
4. Monitor Compliance: Regularly review compliance processes to avoid lapses that could lead to penalties.

Examples:

• Scenario 1: A university fails to furnish the required documents under Section 45(4)(a) by the due date. The Assessing Officer imposes a penalty of ₹50,000 for the delay.
• Scenario 2: An institution fails to deliver a statement required under Section 354(1)(e). The Assessing Officer imposes the minimum penalty of ₹10,000 due to the minor nature of the oversight.

This section emphasizes the importance of timely compliance for specific entities to avoid financial penalties.