Income Tax 2025

Appearance

Penalty for failure to comply with the provisions of section 262. ​

467(1) ​

If a person fails to comply with the provisions of section 262, the Assessing Officer may impose a penalty of ten thousand rupees on him.

467(2) ​

If a person, required to quote or intimate his permanent account number or Aadhaar number in any document as referred to in section 262(9)(a), provides or quotes or intimates a number which is false, knowing or believing it to be false, the Assessing Officer may impose a penalty of ten thousand rupees on him for each such default.

467(3) ​

If a person fails to quote or authenticate his permanent account number or Aadhaar number in any document referred to in section 262(9)(a), the Assessing Officer may impose a penalty of ten thousand rupees on him for each such default.

467(4) ​

If a person referred to in 262(9)(b) responsible for ensuring the correct quoting or authentication of permanent account number or Aadhaar number, in documents relating to transactions prescribed under section 262(9)(a) fails to do so, the Assessing Officer may impose a penalty of ten thousand rupees on him for each such default.

Explanation

Section Summary: ​

This section (467) outlines penalties for non-compliance with the provisions of section 262, which relates to the quoting or authentication of Permanent Account Number (PAN) or Aadhaar number in specified documents. The penalties are imposed for failures such as not quoting the correct PAN/Aadhaar, providing false information, or failing to ensure proper authentication in prescribed documents.

Key Changes: ​

  1. Introduction of Penalties for PAN/Aadhaar Non-Compliance: This section introduces specific penalties for failing to comply with PAN/Aadhaar quoting or authentication requirements under section 262.
  2. Penalty for False Information: A new penalty is introduced for knowingly providing false PAN/Aadhaar details.
  3. Penalty for Non-Authentication: A penalty is imposed for failing to authenticate PAN/Aadhaar in prescribed documents.
  4. Responsibility on Third Parties: A penalty is introduced for individuals or entities responsible for ensuring correct PAN/Aadhaar authentication in documents related to prescribed transactions.

Practical Implications: ​

  1. For Individuals: Taxpayers must ensure they quote and authenticate their PAN or Aadhaar correctly in all relevant documents. Providing false information or failing to authenticate can result in penalties.
  2. For Businesses and Entities: Entities responsible for ensuring PAN/Aadhaar authentication in transactions (e.g., banks, financial institutions) must implement robust systems to verify and authenticate these details. Failure to do so can lead to penalties for each default.
  3. Increased Compliance Burden: Taxpayers and entities must be vigilant in adhering to PAN/Aadhaar requirements to avoid penalties.

Critical Concepts: ​

  1. Section 262(9)(a): Refers to documents or transactions where quoting or authenticating PAN/Aadhaar is mandatory.
  2. Section 262(9)(b): Refers to individuals or entities responsible for ensuring correct PAN/Aadhaar authentication in prescribed documents.
  3. Penalty Structure: The penalty is fixed at ₹10,000 per default, whether for non-compliance, false information, or failure to authenticate.

Compliance Steps: ​

  1. Verify PAN/Aadhaar Details: Ensure that PAN or Aadhaar details are accurate and correctly quoted in all prescribed documents.
  2. Authentication: Use appropriate systems to authenticate PAN/Aadhaar in transactions where required.
  3. Internal Checks: Entities responsible for ensuring compliance should implement internal checks to verify PAN/Aadhaar details in documents.
  4. Record-Keeping: Maintain records of PAN/Aadhaar authentication for audit and compliance purposes.

Examples: ​

  1. Individual Taxpayer: Mr. A fails to quote his PAN in a high-value transaction document. The Assessing Officer imposes a penalty of ₹10,000 for this default.
  2. Business Entity: A bank fails to authenticate the Aadhaar number of a customer in a transaction document. The Assessing Officer imposes a penalty of ₹10,000 for each such default.
  3. False Information: Ms. B knowingly provides a false PAN in a document. The Assessing Officer imposes a penalty of ₹10,000 for this act.

This section emphasizes the importance of accurate PAN/Aadhaar quoting and authentication to avoid penalties.