Penalty for failure to comply with the provisions of section 254.

466

If a person fails to comply with the provisions of section 254, the Joint Commissioner, Deputy Director or Assistant Director or the Assessing Officer, may impose a penalty which may extend up to one thousand rupees on him.

Explanation

Section Summary:

Section 466 of the new income tax law imposes a penalty on individuals or entities who fail to comply with the provisions outlined in Section 254. Section 254 typically deals with orders passed by the Income Tax Appellate Tribunal (ITAT). The penalty can be levied by designated tax authorities, such as the Joint Commissioner, Deputy Director, Assistant Director, or Assessing Officer, and can go up to ₹1,000.

Key Changes:

• Introduction of Penalty for Non-Compliance: Previously, there may not have been a specific penalty provision for failing to comply with Section 254. This section now explicitly introduces a penalty for such non-compliance.
• Authority to Impose Penalty: The section clarifies which tax authorities (Joint Commissioner, Deputy Director, Assistant Director, or Assessing Officer) have the power to impose this penalty.

Practical Implications:

• For Taxpayers: Taxpayers or entities involved in appeals before the ITAT must ensure they comply with the orders or directions issued under Section 254. Failure to do so could result in a penalty of up to ₹1,000.
• For Tax Authorities: This provision empowers tax officers to enforce compliance with ITAT orders, ensuring that taxpayers adhere to the tribunal's decisions.

Critical Concepts:

• Section 254: This section pertains to orders passed by the Income Tax Appellate Tribunal (ITAT), which is a quasi-judicial body that hears appeals against decisions made by tax authorities.
• Penalty Authority: The penalty can be imposed by specific tax officers, including the Joint Commissioner, Deputy Director, Assistant Director, or Assessing Officer.

Compliance Steps:

1. Understand ITAT Orders: Ensure you are aware of and understand any orders or directions issued by the ITAT under Section 254.
2. Adhere to Deadlines: Comply with any timelines or requirements specified in the ITAT order.
3. Maintain Documentation: Keep records of compliance actions taken in response to ITAT orders to avoid disputes or penalties.

Example:

Suppose the ITAT issues an order under Section 254 directing a taxpayer to submit additional documentation within 30 days. If the taxpayer fails to provide the required documents within the stipulated time, the Assessing Officer may impose a penalty of up to ₹1,000 under Section 466.

This section ensures that taxpayers take ITAT orders seriously and comply with them promptly, avoiding unnecessary penalties.