Penalty on failure of furnish Annual Information Return section 285BA(5)

Penalty on failure of furnish Annual Information Return section 285BA(5):

Higher penalty for failure to furnish Annual Information Return in response to notice under section 285BA(5) [New section 271FA] 

As per section 285BA(1), the persons listed there under who are responsible for registering, or, maintaining books of account or other document, containing a record of any specified financial transaction, are required to furnish an annual information return in respect of such transactions within the time prescribed under section 285BA(2) i.e.,on or before 31st August, immediately fol owing the financial year in which the transaction is registered or recorded. 

If the annual information return has not been furnished within the prescribed time, section 285BA(5) empowers the Director of Income-tax (Central Information Branch) to issue notice requiring furnishing of annual information return within a period not exceeding 60 days from the date of service of such notice. 

At present, under section 271FA, if a person who is required to furnish an annual information return, as required under section 285BA(1), fails to furnish such return within the time prescribed under that sub-section, the prescribed income-tax authority may direct that such person shal pay, by way of penalty, a sum of  Rs. 100 for every day during which the failure continues.

Section 271FA has now been substituted to provide that if a person who is required to furnish an annual information return, as required under section 285BA(1), fails to furnish such return within the time prescribed under section 285BA(2), the prescribed income-tax authority [i.e., Director of Income-tax (Central Information Branch)] may direct that such person shal pay, by way of penalty, a sum of `100 for every day during which the failure continues.

Further, where such person fails to furnish the annual information return within the period specified in the notice under section 285BA(5), he shal pay, by way of penalty, a sum of five hundred rupees for every day during which the failure continues, beginning from the day immediately following the day on which the time specified in such notice for furnishing the return expires.

Penalty :

The penal provisions under section 271FA w.e.f. 1st April, 2014 are summarized below -

i.) 285BA(1)  Rs. 100 per day of 1st September immediately fol owing the continuing default financial year in which the transaction is registered or recorded til the date of furnishing the AIR or the date of expiry of the

time specified in the notice under section 285BA(5), whichever is earlier.

ii.) 285BA(5) Rs. 500 per day of The day immediately following the day on continuing default which the time specified in notice under section 285BA(5) for furnishing the AIR expires til the date of furnishing of AIR.

(Effective from 1st April, 2014)