Section 271DB — Penalty for Failure to Comply with the Provisions of Section 269SU (Prescribed Electronic Payment Modes)
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live. Penalty of Rs. 5,000 per day for failure by a specified business (turnover above the prescribed threshold) to provide the facility for accepting payment through the prescribed electronic modes as required by section 269SU. Imposed by the Joint Commissioner; the proviso shelters the failure where good and sufficient reasons are proved.
Finance Act, 2026: No amendment by the Finance Act, 2026.
Mechanism: A business required by section 269SU to offer prescribed electronic payment modes fails to do so → penalty of Rs. 5,000 for each day of default → no penalty if good and sufficient reasons are proved.
Litigation profile: Negligible litigation. The section is a compliance-facility penalty with a daily quantum and a good-and-sufficient-reasons proviso.
A. COMMENTARY
A digital-acceptance mandate
Section 269SU requires every person carrying on business with turnover above the prescribed limit to provide facilities for accepting payment through prescribed electronic modes (such as specified UPI/RuPay/QR options). Section 271DB enforces it with a Rs. 5,000-per-day penalty. The object is to widen digital acceptance; the levy is continuing and can accumulate.
The proviso and the date of compliance
The proviso bars the penalty where the person proves good and sufficient reasons for the failure. In practice the issues are the date from which the obligation applied to the particular business, the availability/installation timeline of the prescribed modes, and bona fide steps taken to comply.
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 comply with provisions of section 269SU.
271DB. (1) If a person who is required to provide facility for accepting payment through the prescribed
electronic modes of payment referred to in section 269SU, fails to provide such facility, he shall be liable to
pay, by way of penalty, a sum of five thousand rupees, for every day during which such failure continues:
Provided that no such penalty shall be imposable if such person proves that there were good and sufficient
reasons for such failure.
(2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner of Income-tax:
Provided that any penalty under sub-section (1), on or after the 1st day of April, 2025, shall be
imposed by the Assessing Officer.
C. AUTHORITIES
Direct authority has not developed; the candour rule applies. The governing safeguard is the good-and-sufficient-reasons proviso.
1. The good-and-sufficient-reasons proviso
Principle — bona fide steps and timeline
Proposition Where the business demonstrates good and sufficient reasons — bona fide steps to install the prescribed modes, genuine uncertainty as to applicability, or timely subsequent compliance — the proviso to section 271DB bars the daily penalty.
Use The principal defence to a 271DB levy.
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 271DB — Penalty for Failure to Comply with the Provisions of Section 269SU (Prescribed Electronic Payment Modes)
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live. Penalty of Rs. 5,000 per day for failure by a specified business (turnover above the prescribed threshold) to provide the facility for accepting payment through the prescribed electronic modes as required by section 269SU. Imposed by the Joint Commissioner; the proviso shelters the failure where good and sufficient reasons are proved.
Finance Act, 2026: No amendment by the Finance Act, 2026.
Mechanism: A business required by section 269SU to offer prescribed electronic payment modes fails to do so → penalty of Rs. 5,000 for each day of default → no penalty if good and sufficient reasons are proved.
Litigation profile: Negligible litigation. The section is a compliance-facility penalty with a daily quantum and a good-and-sufficient-reasons proviso.
A. COMMENTARY
A digital-acceptance mandate
Section 269SU requires every person carrying on business with turnover above the prescribed limit to provide facilities for accepting payment through prescribed electronic modes (such as specified UPI/RuPay/QR options). Section 271DB enforces it with a Rs. 5,000-per-day penalty. The object is to widen digital acceptance; the levy is continuing and can accumulate.
The proviso and the date of compliance
The proviso bars the penalty where the person proves good and sufficient reasons for the failure. In practice the issues are the date from which the obligation applied to the particular business, the availability/installation timeline of the prescribed modes, and bona fide steps taken to comply.
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 comply with provisions of section 269SU.
271DB. (1) If a person who is required to provide facility for accepting payment through the prescribed
electronic modes of payment referred to in section 269SU, fails to provide such facility, he shall be liable to
pay, by way of penalty, a sum of five thousand rupees, for every day during which such failure continues:
Provided that no such penalty shall be imposable if such person proves that there were good and sufficient
reasons for such failure.
(2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner of Income-tax:
Provided that any penalty under sub-section (1), on or after the 1st day of April, 2025, shall be
imposed by the Assessing Officer.
C. AUTHORITIES
Direct authority has not developed; the candour rule applies. The governing safeguard is the good-and-sufficient-reasons proviso.
1. The good-and-sufficient-reasons proviso
Principle — bona fide steps and timeline
Proposition Where the business demonstrates good and sufficient reasons — bona fide steps to install the prescribed modes, genuine uncertainty as to applicability, or timely subsequent compliance — the proviso to section 271DB bars the daily penalty.
Use The principal defence to a 271DB levy.
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.