Penalty for failure to answer questions, sign statements, furnish information, returns or statements, allow inspections, etc.
[Section-465 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 465(1) of Income Tax Act 2025
465(1) A person shall be liable to pay a penalty of ten thousand rupees for each default or failure as mentioned below, if that person,—
- (a) being legally bound to state the truth of any matter touching the subject of his assessment, refuses to answer any question put to him by an income-tax authority in the exercise of its powers under this Act; or
- (b) refuses to sign any statement made by him in the course of any proceedings under this Act, which an income-tax authority may legally require him to sign; or
- (c) to whom a summons is issued under section 246(1), either to attend to give evidence or to produce books of account or other documents at a certain place and time omits to attend or produce books of account or documents at the place or time; or
- (d) fails to comply with a notice under section 268(1) or (2) or 270(8) or fails to comply with a direction issued under section 268(5).
Section 465(2) of Income Tax Act 2025
465(2) A person shall be liable to pay a penalty of five hundred rupees for every day during which the following failures continue, if that person fails to—
- (a) comply with a notice under section 175(7); or
- (b) give the notice of discontinuance of his business or profession as required by section 320(3); or
- (c) furnish in due time any of the returns, statements or particulars mentioned in section 252 or section 397(3) or 507; or
- (d) allow inspection of any register referred to in section 255 or of any entry in such register or to allow copies of such register or of any entry therein to be taken; or
- (e) furnish the return of income as required under section263(1)(a)(iii) or (iv) or to furnish it within the time allowed and in the manner required under sections 263(1) and (2); or
- (f) deliver or cause to be delivered in due time a copy of the declaration mentioned in section 393(6); or
- (g) furnish a certificate under section 395(4); or
- (h) deduct and pay tax under section 416(3); or
- (i) furnish a statement under section 389(5)(a); or
- (j) deliver or cause to be delivered in due time a copy of the declaration referred to in section 394(2); or
- (k) deliver or cause to be delivered the statement within the time specified in section 397(3)(g); or
- (l) deliver or cause to be delivered a statement within the time as prescribed under section 397(3)(e).
Section 465(3) of Income Tax Act 2025
465(3) The amount of penalty shall not exceed the amount of tax deductible or collectible for failures in relation to the following:––
- (a) a declaration mentioned in section 393(6);
- (b) a certificate as required by section 395(4); and
- (c) statements under section 397(3)(b) or (e).
Section 465(4) of Income Tax Act 2025
465(4) Any penalty imposable under sub-section (1) or (2) shall be imposed—
- (a) if the contravention, failure or default for which such penalty is imposable occurs in the course of any proceeding before an income-tax authority not below the rank of Joint Director or a Joint Commissioner, by such income-tax authority;
- (b) in a case falling under sub-section (1)(d), by the income-tax authority who had issued the notice or direction referred to therein;
- (c) in a case falling under of sub-section (2)(f), by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner; and
- (d) in any other case, by the Joint Director or the Joint Commissioner.
Section 465(5) of Income Tax Act 2025
465(5) In this section, “income-tax authority” includes a Principal Director General or Director General, Principal Director or Director, Joint Director and an Assistant Director or Deputy Director while exercising the powers vested in a court under the Code of Civil Procedure, 1908, when trying a suit in respect of the matters specified in section 246(1).
FAQs on Section 465 of Income Tax Act 2025
What is the penalty under Section 465(1) of the Income Tax Act, 2025?
A person is liable to pay a penalty of ₹10,000 for each default or failure, such as refusing to answer questions, sign statements, attend summons, or comply with specific notices or directions as listed in clauses (a) to (d) of Section 465(1).
When does the penalty of ₹500 per day apply under Section 465(2)?
The penalty of ₹500 per day applies for each day the person fails to comply with specific requirements like filing returns, furnishing declarations, allowing inspections, deducting and paying tax, or delivering certain statements as listed in clauses (a) to (l) of Section 465(2).
Is there any cap on the penalty amount under Section 465(3)?
Yes, the penalty amount under Section 465(2) cannot exceed the amount of tax deductible or collectible for failures related to declarations under section 393(6), certificates under section 395(4), and statements under section 397(3)(b) or (e).
Who is authorized to impose penalties under Section 465(4)?
Penalties under Section 465(1) or (2) are imposed by:
- The income-tax authority not below the rank of Joint Director or Joint Commissioner if the default occurs during proceedings before them.
- The authority who issued the notice or direction in the case of failure under Section 465(1)(d).
- The Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner for failure under Section 465(2)(f).
- The Joint Director or Joint Commissioner in all other cases.
What is the meaning of “income-tax authority” under Section 465(5)?
It includes Principal Director General or Director General, Principal Director or Director, Joint Director, and an Assistant Director or Deputy Director when exercising powers vested in a court under the Code of Civil Procedure, 1908, in respect of matters under Section 246(1).
Is refusal to sign a statement during proceedings penalized under this section?
Yes, refusal to sign any statement made during proceedings, which an income-tax authority may legally require to be signed, attracts a penalty of ₹10,000 under Section 465(1)(b).
Does omission to attend or produce documents in response to a summons attract penalty?
Yes, failure to attend or produce documents in response to a summons under Section 246(1) is penalized with ₹10,000 under Section 465(1)(c).
What happens if a person fails to notify discontinuance of business as required?
Failure to give notice of business discontinuance under Section 320(3) results in a penalty of ₹500 per day under Section 465(2)(b).
Can penalty be levied for non-filing of return of income?
Yes, if a person fails to furnish return of income under Section 263(1)(a)(iii) or (iv) within the specified time, they are liable to a penalty of ₹500 per day as per Section 465(2)(e).
Is failure to deduct and pay tax punishable under this section?
Yes, if a person fails to deduct and pay tax as required under Section 416(3), they are liable to a penalty of ₹500 per day under Section 465(2)(h).
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