CHAPTER XVII - COLLECTION AND RECOVERY OF TAX | G.—LEVY OF FEE IN CERTAIN CASES
CHAPTER XVII - COLLECTION AND RECOVERY OF TAX | G.—LEVY OF FEE IN CERTAIN CASES
Section 234G — Fee for Default Relating to Statement or Certificate
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live. Inserted by the Finance Act, 2020; operative with the donation-reporting regime (section 35(1A) and the new section 80G(5) statement/certificate requirements), which took practical effect from financial year 2021-22 (Forms 10BD and 10BE).
Finance Act, 2026: Not amended by the Finance Act, 2026.
Mechanism: Fee of Rs. 200 for every day of default by a research/scientific institution (section 35) or an 80G institution/fund in delivering the prescribed donation statement (Form 10BD) or furnishing the donor certificate (Form 10BE); capped at the amount in respect of which the failure occurred; payable before the statement/certificate is delivered/furnished.
Litigation profile: No reported judicial authority to date — a new compliance fee; candour rule applies.
A. COMMENTARY
Legislative scheme and place in the donation-reporting regime
Section 234G was inserted by the Finance Act, 2020 as part of a re-engineering of the deduction-matching machinery for charitable donations and scientific-research contributions. Approved institutions are now required to file an annual statement of donations received (Form 10BD) and to issue a certificate to each donor (Form 10BE); the donor's deduction under section 80G (or section 35) is keyed to this reported data. Section 234G is the donee-side enforcement fee for that regime — the structural mirror of section 234E on the TDS side. It bites where (a) a section 35 research association, university, college, other institution or company fails to deliver the statement or furnish the certificate under section 35(1A); or (b) an 80G institution or fund fails to deliver the statement under section 80G(5)(viii) or furnish the certificate under section 80G(5)(ix).
Structure of the fee
The fee is Rs. 200 for every day during which the failure continues, capped by sub-section (2)(a) at the amount in respect of which the failure has occurred, and is payable, under sub-section (2)(b), before the statement is delivered or the certificate furnished. The mechanism — daily accrual, a cap tied to the underlying amount, and pay-before-compliance — is identical to section 234E, and the interpretive learning on section 234E (a fee, automatic and consequential, not a penalty) is likely to be applied to section 234G by analogy.
The same default also exposes the institution to a penalty under section 271K (Rs. 10,000 to Rs. 1,00,000), which is discretionary and subject to the reasonable-cause defence under section 273B. Section 234G (automatic fee) and section 271K (discretionary penalty) must be kept analytically separate, exactly as section 234E is kept separate from section 271H.
Candour and practical mitigation
There is, as yet, no judicial decision interpreting section 234G. In practice the rigour of the daily fee has been mitigated administratively: the CBDT has, on occasion, extended the due dates for Forms 10BD/10BE for particular years, which postpones the point from which the fee runs. Institutions should treat the fee as mandatory once a genuine default has occurred and rely on due-date extensions and the absence of default, rather than on any reasonable-cause plea, against the fee itself.
B. STATUTORY TEXT (verbatim)
Reproduced verbatim from the Income-tax Act, 1961 (as amended by the Finance Act, 2025); unchanged by the Finance Act, 2026.
Fee for default relating to statement or certificate.
234G. (1) Without prejudice to the provisions of this Act, where,—
(a) the research association, university, college or other institution referred to in clause (ii) or clause (iii) or the company referred to in clause (iia) of sub-section (1) of section 35 fails to deliver or cause to be delivered a statement within the time prescribed under clause (i), or furnish a certificate prescribed under clause (ii) of sub-section (1A) of that section; or
(b) the institution or fund fails to deliver or cause to be delivered a statement within the time prescribed under clause (viii) of sub-section (5) of section 80G, or furnish a certificate prescribed under clause (ix) of the said sub-section,
it shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues.
(2) The amount of fee referred to in sub-section (1) shall,—
(a) not exceed the amount in respect of which the failure referred to therein has occurred;
(b) be paid before delivering or causing to be delivered the statement or before furnishing the certificate referred to in sub-section (1).
C. AUTHORITIES
Candour rule: there is no reported case law directly on section 234G. The authorities below are cognate — the section 234E jurisprudence applied by analogy and the constitutional fee/tax line — and are offered as the closest available guidance.
Section 234G replicates section 234E's architecture (daily Rs. 200 fee, cap, pay-before-compliance). The following are persuasive for the nature and incidence of the levy.
Rashmikant Kundalia v. Union of India, [2015] 373 ITR 268 (Bombay)
Holding A daily late-filing "fee" of this design is a valid fee (privilege/service rationale), neither a tax nor a penalty, and does not offend Article 14.
Use Supports the validity and automatic character of the section 234G fee.
Fatheraj Singhvi v. Union of India, [2016] 289 CTR 602 (Karnataka); Rajesh Kourani v. Union of India, [2017] 83 taxmann.com 137 (Gujarat)
Holding The charge/machinery debate that shaped section 234E (charging provision vs. machinery for computation) is the template against which any future section 234G machinery dispute would be analysed.
Use Flags the likely contours of future litigation on the donee-side fee.
Constitutional fee/tax backdrop
Commissioner, HRE, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, AIR 1954 SC 282
Holding Distinguishes a fee (special service / quid pro quo) from a tax (compulsory exaction without correlation).
Use Anchors characterisation of section 234G as a fee.
Sreenivasa General Traders v. State of A.P., (1983) 4 SCC 353
Holding Strict quid pro quo is not a sine qua non; a broad correlation between the levy and the regulatory service suffices.
Use Supports the validity of the modest "service" rationale for the donation-reporting fee.
CHAPTER XVII - COLLECTION AND RECOVERY OF TAX | G.—LEVY OF FEE IN CERTAIN CASES
Section 234G — Fee for Default Relating to Statement or Certificate
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live. Inserted by the Finance Act, 2020; operative with the donation-reporting regime (section 35(1A) and the new section 80G(5) statement/certificate requirements), which took practical effect from financial year 2021-22 (Forms 10BD and 10BE).
Finance Act, 2026: Not amended by the Finance Act, 2026.
Mechanism: Fee of Rs. 200 for every day of default by a research/scientific institution (section 35) or an 80G institution/fund in delivering the prescribed donation statement (Form 10BD) or furnishing the donor certificate (Form 10BE); capped at the amount in respect of which the failure occurred; payable before the statement/certificate is delivered/furnished.
Litigation profile: No reported judicial authority to date — a new compliance fee; candour rule applies.
A. COMMENTARY
Legislative scheme and place in the donation-reporting regime
Section 234G was inserted by the Finance Act, 2020 as part of a re-engineering of the deduction-matching machinery for charitable donations and scientific-research contributions. Approved institutions are now required to file an annual statement of donations received (Form 10BD) and to issue a certificate to each donor (Form 10BE); the donor's deduction under section 80G (or section 35) is keyed to this reported data. Section 234G is the donee-side enforcement fee for that regime — the structural mirror of section 234E on the TDS side. It bites where (a) a section 35 research association, university, college, other institution or company fails to deliver the statement or furnish the certificate under section 35(1A); or (b) an 80G institution or fund fails to deliver the statement under section 80G(5)(viii) or furnish the certificate under section 80G(5)(ix).
Structure of the fee
The fee is Rs. 200 for every day during which the failure continues, capped by sub-section (2)(a) at the amount in respect of which the failure has occurred, and is payable, under sub-section (2)(b), before the statement is delivered or the certificate furnished. The mechanism — daily accrual, a cap tied to the underlying amount, and pay-before-compliance — is identical to section 234E, and the interpretive learning on section 234E (a fee, automatic and consequential, not a penalty) is likely to be applied to section 234G by analogy.
Companion penalty under section 271K
The same default also exposes the institution to a penalty under section 271K (Rs. 10,000 to Rs. 1,00,000), which is discretionary and subject to the reasonable-cause defence under section 273B. Section 234G (automatic fee) and section 271K (discretionary penalty) must be kept analytically separate, exactly as section 234E is kept separate from section 271H.
Candour and practical mitigation
There is, as yet, no judicial decision interpreting section 234G. In practice the rigour of the daily fee has been mitigated administratively: the CBDT has, on occasion, extended the due dates for Forms 10BD/10BE for particular years, which postpones the point from which the fee runs. Institutions should treat the fee as mandatory once a genuine default has occurred and rely on due-date extensions and the absence of default, rather than on any reasonable-cause plea, against the fee itself.
B. STATUTORY TEXT (verbatim)
Reproduced verbatim from the Income-tax Act, 1961 (as amended by the Finance Act, 2025); unchanged by the Finance Act, 2026.
Fee for default relating to statement or certificate.
234G. (1) Without prejudice to the provisions of this Act, where,—
(a) the research association, university, college or other institution referred to in clause (ii) or clause (iii) or the company referred to in clause (iia) of sub-section (1) of section 35 fails to deliver or cause to be delivered a statement within the time prescribed under clause (i), or furnish a certificate prescribed under clause (ii) of sub-section (1A) of that section; or
(b) the institution or fund fails to deliver or cause to be delivered a statement within the time prescribed under clause (viii) of sub-section (5) of section 80G, or furnish a certificate prescribed under clause (ix) of the said sub-section,
it shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues.
(2) The amount of fee referred to in sub-section (1) shall,—
(a) not exceed the amount in respect of which the failure referred to therein has occurred;
(b) be paid before delivering or causing to be delivered the statement or before furnishing the certificate referred to in sub-section (1).
C. AUTHORITIES
Candour rule: there is no reported case law directly on section 234G. The authorities below are cognate — the section 234E jurisprudence applied by analogy and the constitutional fee/tax line — and are offered as the closest available guidance.
By analogy — the section 234E line
Section 234G replicates section 234E's architecture (daily Rs. 200 fee, cap, pay-before-compliance). The following are persuasive for the nature and incidence of the levy.
Rashmikant Kundalia v. Union of India, [2015] 373 ITR 268 (Bombay)
Holding A daily late-filing "fee" of this design is a valid fee (privilege/service rationale), neither a tax nor a penalty, and does not offend Article 14.
Use Supports the validity and automatic character of the section 234G fee.
Fatheraj Singhvi v. Union of India, [2016] 289 CTR 602 (Karnataka); Rajesh Kourani v. Union of India, [2017] 83 taxmann.com 137 (Gujarat)
Holding The charge/machinery debate that shaped section 234E (charging provision vs. machinery for computation) is the template against which any future section 234G machinery dispute would be analysed.
Use Flags the likely contours of future litigation on the donee-side fee.
Constitutional fee/tax backdrop
Commissioner, HRE, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, AIR 1954 SC 282
Holding Distinguishes a fee (special service / quid pro quo) from a tax (compulsory exaction without correlation).
Use Anchors characterisation of section 234G as a fee.
Sreenivasa General Traders v. State of A.P., (1983) 4 SCC 353
Holding Strict quid pro quo is not a sine qua non; a broad correlation between the levy and the regulatory service suffices.
Use Supports the validity of the modest "service" rationale for the donation-reporting fee.