Income Tax Act 2025: Section 447 for Tax Year 2026-27

Penalty for failure to furnish report under section 172

[Section-447 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]

If any person fails to furnish a report from an accountant as required by section 172, the Assessing Officer may impose a penalty of one lakh rupees on such person.

FAQs on Section 447 of Income Tax Act 2025

What is the penalty under Section 447 of the Income Tax Act, 2025?
The penalty is one lakh rupees for failure to furnish a report from an accountant as required by Section 172.

Who is liable to pay the penalty under Section 447?
Any person who is required to furnish the accountant’s report under Section 172 and fails to do so is liable.

Who can impose the penalty under Section 447?
The penalty can be imposed by the Assessing Officer.

Is the penalty under Section 447 automatic upon default?
No, the penalty is imposed at the discretion of the Assessing Officer after considering the facts of the case.

Can the penalty under Section 447 be waived or reduced?
There is no provision under Section 447 for waiver or reduction, but general provisions for reasonable cause under Chapter XXIV may be applicable based on facts.

Does the penalty under Section 447 apply if the report is filed late?
Yes, if the report is not furnished within the prescribed time, it constitutes a failure and may attract the penalty.

Is there a specific format or manner for furnishing the report under Section 172?
Yes, the report must be obtained from an accountant and furnished in the prescribed manner as per Section 172.

What is the objective of requiring the accountant’s report under Section 172?
It is to ensure proper verification of prescribed international transactions or specified domestic transactions, as per the purpose of Section 172.

Can the taxpayer appeal against a penalty order under Section 447?
Yes, the taxpayer can appeal against such an order before the Commissioner (Appeals).

Does the penalty under Section 447 apply in addition to other penalties under the Act?
Yes, it is in addition to any other penalty that may be levied under the Income Tax Act, 2025 for other defaults.