Section 271FAB — Failure to Furnish Statement or Information or Document by an Eligible Investment Fund (Section 9A)
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live but narrow. Penalty of Rs. 5,00,000 where an eligible investment fund that is required to furnish a statement or any information or document under section 9A fails to do so within the prescribed time. Relates to the offshore-fund-manager safe harbour in section 9A.
Finance Act, 2026: No amendment by the Finance Act, 2026.
Mechanism: An eligible investment fund (availing the section 9A safe harbour) fails to furnish the required section 9A statement/information/document in time → penalty of Rs. 5,00,000.
Litigation profile: No meaningful direct litigation; the provision is specialised and the eligible-fund population small.
A. COMMENTARY
A safe-harbour compliance penalty
Section 9A provides that the presence of an eligible fund manager in India does not, in itself, make an offshore "eligible investment fund" resident or give it a business connection in India, subject to numerous conditions, including periodic reporting. Section 271FAB enforces that reporting with a fixed Rs. 5,00,000 penalty for default. The provision is narrow and applies only to funds availing the section 9A regime.
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 statement or information or document by an eligible investment fund.
271FAB. If any eligible investment fund which is required to furnish a statement or any information or
document, as required under sub-section (5) of section 9A fails to furnish such statement or information or
document within the time prescribed under that sub-section, the income-tax authority prescribed under the
said sub-section may direct that such fund shall pay, by way of penalty, a sum of five hundred thousand
rupees.
C. AUTHORITIES
No direct authority of note exists; the candour rule applies. The provision is governed by the section 9A conditions and the prescribed reporting.
1. Specialised reporting default
Principle — fixed penalty for section 9A reporting default
Proposition The Rs. 5,00,000 penalty attaches to the failure of an eligible investment fund to furnish the section 9A statement/information/document in time; reasonable-cause considerations (general principles) inform any challenge, though the section is not within section 273B.
Use Frames the narrow compliance obligation for section 9A funds.
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 271FAB — Failure to Furnish Statement or Information or Document by an Eligible Investment Fund (Section 9A)
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live but narrow. Penalty of Rs. 5,00,000 where an eligible investment fund that is required to furnish a statement or any information or document under section 9A fails to do so within the prescribed time. Relates to the offshore-fund-manager safe harbour in section 9A.
Finance Act, 2026: No amendment by the Finance Act, 2026.
Mechanism: An eligible investment fund (availing the section 9A safe harbour) fails to furnish the required section 9A statement/information/document in time → penalty of Rs. 5,00,000.
Litigation profile: No meaningful direct litigation; the provision is specialised and the eligible-fund population small.
A. COMMENTARY
A safe-harbour compliance penalty
Section 9A provides that the presence of an eligible fund manager in India does not, in itself, make an offshore "eligible investment fund" resident or give it a business connection in India, subject to numerous conditions, including periodic reporting. Section 271FAB enforces that reporting with a fixed Rs. 5,00,000 penalty for default. The provision is narrow and applies only to funds availing the section 9A regime.
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 statement or information or document by an eligible investment fund.
271FAB. If any eligible investment fund which is required to furnish a statement or any information or
document, as required under sub-section (5) of section 9A fails to furnish such statement or information or
document within the time prescribed under that sub-section, the income-tax authority prescribed under the
said sub-section may direct that such fund shall pay, by way of penalty, a sum of five hundred thousand
rupees.
C. AUTHORITIES
No direct authority of note exists; the candour rule applies. The provision is governed by the section 9A conditions and the prescribed reporting.
1. Specialised reporting default
Principle — fixed penalty for section 9A reporting default
Proposition The Rs. 5,00,000 penalty attaches to the failure of an eligible investment fund to furnish the section 9A statement/information/document in time; reasonable-cause considerations (general principles) inform any challenge, though the section is not within section 273B.
Use Frames the narrow compliance obligation for section 9A funds.
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.