Section 271-I — Failure to Furnish Information or Furnishing Inaccurate Information under Section 195(6)
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live. A fixed penalty of Rs. 1,00,000 where a person required to furnish information under section 195(6) (in Form 15CA/15CB, in respect of payments to non-residents) fails to furnish it or furnishes inaccurate information. Subject to reasonable cause under section 273B.
Finance Act, 2026: No amendment by the Finance Act, 2026.
Mechanism: Failure to furnish the section 195(6) information (Form 15CA/15CB) for a payment to a non-resident, or furnishing inaccurate information → fixed penalty of Rs. 1,00,000 → unless reasonable cause is shown under section 273B.
Litigation profile: Lightly litigated. The recurring issues are reasonable cause, the scope of the section 195(6) obligation (which extends to certain non-taxable remittances), and bona fide errors in Form 15CA/15CB.
A. COMMENTARY
Enforcing the Form 15CA/15CB regime
Section 195(6) requires the furnishing of prescribed information (Forms 15CA and, where applicable, 15CB) in respect of payments to non-residents, whether or not chargeable to tax. Section 271-I enforces it with a fixed Rs. 1,00,000 penalty for non-furnishing or inaccurate furnishing. The obligation is on the remitter and is independent of the taxability of the remittance.
Reasonable cause and bona fide error
Being within section 273B, the penalty yields to reasonable cause — a bona fide belief that the remittance did not require the information (e.g., a remittance within an exempted class), genuine clerical error since corrected, or technical/portal difficulty. The fixed quantum makes the reasonable-cause enquiry the principal battleground.
B. STATUTORY TEXT (verbatim)
Reproduced from the Income-tax Act, 1961 as amended up to the Finance Act, 2025; Finance Act, 2026 changes are noted above.
Penalty for failure to furnish information or furnishing inaccurate information under section 195.
271-I. If a person, who is required to furnish information under sub-section (6) of section 195, fails to
furnish such information, or furnishes inaccurate information, the Assessing Officer may direct that such
person shall pay, by way of penalty, a sum of one lakh rupees.
C. AUTHORITIES
Direct authority is limited; the candour rule applies. The governing safeguard is section 273B reasonable cause.
1. Reasonable cause and scope
Principle — bona fide belief / corrected error
Proposition A bona fide belief that the section 195(6) information was not required, or a genuine error since corrected, is reasonable cause under section 273B and defeats the Rs. 1,00,000 penalty.
Use The principal defence to a 271-I levy.
Hindustan Steel Ltd v. State of Orissa (1972) 83 ITR 26 (SC)
Holding Penalty is not to be imposed for a technical/bona fide default; discretion governs.
Use Resists a mechanical 271-I penalty.
Prepared for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced from the official Act; case-law holdings are the author’s summaries for professional use.
CHAPTER XXI — PENALTIES IMPOSABLE
Section 271-I — Failure to Furnish Information or Furnishing Inaccurate Information under Section 195(6)
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live. A fixed penalty of Rs. 1,00,000 where a person required to furnish information under section 195(6) (in Form 15CA/15CB, in respect of payments to non-residents) fails to furnish it or furnishes inaccurate information. Subject to reasonable cause under section 273B.
Finance Act, 2026: No amendment by the Finance Act, 2026.
Mechanism: Failure to furnish the section 195(6) information (Form 15CA/15CB) for a payment to a non-resident, or furnishing inaccurate information → fixed penalty of Rs. 1,00,000 → unless reasonable cause is shown under section 273B.
Litigation profile: Lightly litigated. The recurring issues are reasonable cause, the scope of the section 195(6) obligation (which extends to certain non-taxable remittances), and bona fide errors in Form 15CA/15CB.
A. COMMENTARY
Enforcing the Form 15CA/15CB regime
Section 195(6) requires the furnishing of prescribed information (Forms 15CA and, where applicable, 15CB) in respect of payments to non-residents, whether or not chargeable to tax. Section 271-I enforces it with a fixed Rs. 1,00,000 penalty for non-furnishing or inaccurate furnishing. The obligation is on the remitter and is independent of the taxability of the remittance.
Reasonable cause and bona fide error
Being within section 273B, the penalty yields to reasonable cause — a bona fide belief that the remittance did not require the information (e.g., a remittance within an exempted class), genuine clerical error since corrected, or technical/portal difficulty. The fixed quantum makes the reasonable-cause enquiry the principal battleground.
B. STATUTORY TEXT (verbatim)
Reproduced from the Income-tax Act, 1961 as amended up to the Finance Act, 2025; Finance Act, 2026 changes are noted above.
Penalty for failure to furnish information or furnishing inaccurate information under section 195.
271-I. If a person, who is required to furnish information under sub-section (6) of section 195, fails to
furnish such information, or furnishes inaccurate information, the Assessing Officer may direct that such
person shall pay, by way of penalty, a sum of one lakh rupees.
C. AUTHORITIES
Direct authority is limited; the candour rule applies. The governing safeguard is section 273B reasonable cause.
1. Reasonable cause and scope
Principle — bona fide belief / corrected error
Proposition A bona fide belief that the section 195(6) information was not required, or a genuine error since corrected, is reasonable cause under section 273B and defeats the Rs. 1,00,000 penalty.
Use The principal defence to a 271-I levy.
Hindustan Steel Ltd v. State of Orissa (1972) 83 ITR 26 (SC)
Holding Penalty is not to be imposed for a technical/bona fide default; discretion governs.
Use Resists a mechanical 271-I penalty.
Prepared for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced from the official Act; case-law holdings are the author’s summaries for professional use.