Penalty for failure to comply with provisions of section 187
[Section-452 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
The Assessing Officer may impose on a person, a penalty of five thousand rupees for every day of the duration of failure where he fails to provide a facility for accepting payments through the prescribed electronic modes of payment, as referred to in section 187 except when he proves that there were good and sufficient reason for such failure.
FAQs on Section 452 of Income Tax Act 2025
What is Section 452 of the Income Tax Act, 2025 about?
Section 452 prescribes a penalty for failure to comply with the provisions of Section 187, specifically relating to providing facilities for accepting payments through prescribed electronic modes.
What triggers the penalty under Section 452?
The penalty is triggered when a person fails to provide a facility for accepting payments through the prescribed electronic modes as required under Section 187.
Who can impose the penalty under Section 452?
The Assessing Officer is empowered to impose the penalty under this section.
How much is the penalty under Section 452?
The penalty is five thousand rupees for every day during which the failure continues.
Is there any provision for relief from the penalty under Section 452?
Yes, the penalty is not imposed if the person proves that there were good and sufficient reasons for the failure.
From when is Section 452 applicable?
Section 452 is applicable with effect from 1st April, 2026.
Does Section 452 apply to all persons under the Act?
Yes, it applies to any person required to provide electronic payment facilities under Section 187.
What constitutes ‘prescribed electronic modes of payment’ under Section 452?
These are the specific electronic payment methods prescribed under Section 187, which must be complied with. The exact modes are defined in the relevant rules or notifications under that section.
Can the penalty under Section 452 be imposed for partial compliance?
Yes, if the prescribed electronic payment modes are not fully provided as required, it may be treated as failure and attract the penalty.
Is there a limit to the total amount of penalty under Section 452?
The section does not specify any upper limit on the total amount; the penalty accrues at the rate of ₹5,000 per day until compliance or justification is accepted.
What is considered a ‘good and sufficient reason’ for failure under Section 452?
A good and sufficient reason is a valid justification for non-compliance that the Assessing Officer accepts based on facts and circumstances.
Does the taxpayer get an opportunity to be heard before the penalty is imposed under Section 452?
Although not explicitly stated in Section 452, principles of natural justice usually require that the person be given an opportunity to explain before the penalty is levied.
Can the penalty under Section 452 be appealed?
Yes, penalties imposed under the Act can generally be challenged through the appellate mechanism provided under the Income Tax Act, 2025.
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