Section 271GB — Failure to Furnish Report or Furnishing Inaccurate Report under Section 286 (Country-by-Country Report)
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live. The BEPS Action 13 enforcement provision: graduated penalties on a constituent entity/parent that fails to furnish the Country-by-Country Report (CbCR) under section 286, or furnishes an inaccurate report, or fails to produce information called for. Penalties run from Rs. 5,000/Rs. 15,000 per day up to Rs. 50,000 per day for prolonged default, with a Rs. 5,00,000 penalty for an inaccurate report in defined circumstances.
Finance Act, 2026: No amendment by the Finance Act, 2026.
Mechanism: A reporting entity under section 286 fails to furnish the CbCR (per-day penalties stepping up with the duration of default), or fails to produce information called for under section 286(6), or furnishes an inaccurate report in the circumstances specified → graduated penalties as set out in sub-sections (1)-(3).
Litigation profile: Minimal direct litigation; the provision is recent and applies to large multinational groups. The candour rule applies.
A. COMMENTARY
India’s CbCR penalty under BEPS Action 13
Section 286 requires the ultimate/alternate parent or designated constituent entity of an international group above the prescribed consolidated-revenue threshold to file the Country-by-Country Report. Section 271GB enforces it with a graduated, duration-sensitive penalty regime, plus a penalty for inaccurate reports where the entity knew or ought to have known of the inaccuracy or failed to correct it. The structure mirrors the OECD’s emphasis on timely, accurate group reporting.
Graduated quantum and the inaccuracy limb
The per-day penalty escalates (Rs. 5,000 to Rs. 15,000, and up to Rs. 50,000 for default continuing after a notice/order), reflecting the seriousness of prolonged non-reporting. The separate Rs. 5,00,000 inaccuracy penalty requires knowledge/constructive knowledge of the inaccuracy or a failure to inform of a discovered error — a bona fide, promptly-corrected error with due diligence is outside it.
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 report or for furnishing inaccurate report under section 286.
271GB. (1) If any reporting entity referred to in section 286, which is required to furnish the report referred
to in sub-section (2) of the said section, in respect of a reporting accounting year, fails to do so, the authority
prescribed under that section (herein referred to as prescribed authority) may direct that such entity shall
pay, by way of penalty, a sum of,—
(a) five thousand rupees for every day for which the failure continues, if the period of failure does not
exceed one month; or
(b) fifteen thousand rupees for every day for which the failure continues beyond the period of one
month.
(2) Where any reporting entity referred to in section 286 fails to produce the information and documents
within the period allowed under sub-section (6) of the said section, the prescribed authority may direct that
such entity shall pay, by way of penalty, a sum of five thousand rupees for every day during which the
failure continues, beginning from the day immediately following the day on which the period for furnishing
the information and document expires.
(3) If the failure referred to in sub-section (1) or sub-section (2) continues after an order has been served on
the entity, directing it to pay the penalty under sub-section (1) or, as the case may be, under sub-section (2),
then, notwithstanding anything contained in sub-section (1) or sub-section (2), the prescribed authority may
direct that such entity shall pay, by way of penalty, a sum of fifty thousand rupees for every day for which
such failure continues beginning from the date of service of such order.
(4) Where a reporting entity referred to in section 286 provides inaccurate information in the report
furnished in accordance with sub-section (2) of the said section and where—
(a) the entity has knowledge of the inaccuracy at the time of furnishing the report but fails to inform
the prescribed authority; or
(b) the entity discovers the inaccuracy after the report is furnished and fails to inform the prescribed
authority and furnish correct report within a period of fifteen days of such discovery; or
(c) the entity furnishes inaccurate information or document in response to the notice issued under
then, the prescribed authority may direct that such person shall pay, by way of penalty, a sum of five lakh
rupees.
C. AUTHORITIES
No direct merits authority of note has developed; the candour rule applies. The provision is governed by the section 286 CbCR scheme and Rules 10DA-10DB.
1. Graduated default and inaccuracy
Principle — duration-sensitive per-day penalty
Proposition The penalty for non-furnishing escalates with the duration of default and the issuance of notices/orders; the computation must follow the statutory tiers in sub-sections (1)-(2).
Use Frames the quantum challenge to a CbCR non-filing penalty.
Proposition The inaccuracy penalty requires that the entity knew or ought to have known of the inaccuracy, or discovered and failed to inform of it; a bona fide, corrected error with due diligence is not penalised.
Use The defence to an inaccurate-CbCR 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 271GB — Failure to Furnish Report or Furnishing Inaccurate Report under Section 286 (Country-by-Country Report)
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live. The BEPS Action 13 enforcement provision: graduated penalties on a constituent entity/parent that fails to furnish the Country-by-Country Report (CbCR) under section 286, or furnishes an inaccurate report, or fails to produce information called for. Penalties run from Rs. 5,000/Rs. 15,000 per day up to Rs. 50,000 per day for prolonged default, with a Rs. 5,00,000 penalty for an inaccurate report in defined circumstances.
Finance Act, 2026: No amendment by the Finance Act, 2026.
Mechanism: A reporting entity under section 286 fails to furnish the CbCR (per-day penalties stepping up with the duration of default), or fails to produce information called for under section 286(6), or furnishes an inaccurate report in the circumstances specified → graduated penalties as set out in sub-sections (1)-(3).
Litigation profile: Minimal direct litigation; the provision is recent and applies to large multinational groups. The candour rule applies.
A. COMMENTARY
India’s CbCR penalty under BEPS Action 13
Section 286 requires the ultimate/alternate parent or designated constituent entity of an international group above the prescribed consolidated-revenue threshold to file the Country-by-Country Report. Section 271GB enforces it with a graduated, duration-sensitive penalty regime, plus a penalty for inaccurate reports where the entity knew or ought to have known of the inaccuracy or failed to correct it. The structure mirrors the OECD’s emphasis on timely, accurate group reporting.
Graduated quantum and the inaccuracy limb
The per-day penalty escalates (Rs. 5,000 to Rs. 15,000, and up to Rs. 50,000 for default continuing after a notice/order), reflecting the seriousness of prolonged non-reporting. The separate Rs. 5,00,000 inaccuracy penalty requires knowledge/constructive knowledge of the inaccuracy or a failure to inform of a discovered error — a bona fide, promptly-corrected error with due diligence is outside it.
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 report or for furnishing inaccurate report under section 286.
271GB. (1) If any reporting entity referred to in section 286, which is required to furnish the report referred
to in sub-section (2) of the said section, in respect of a reporting accounting year, fails to do so, the authority
prescribed under that section (herein referred to as prescribed authority) may direct that such entity shall
pay, by way of penalty, a sum of,—
(a) five thousand rupees for every day for which the failure continues, if the period of failure does not
exceed one month; or
(b) fifteen thousand rupees for every day for which the failure continues beyond the period of one
month.
(2) Where any reporting entity referred to in section 286 fails to produce the information and documents
within the period allowed under sub-section (6) of the said section, the prescribed authority may direct that
such entity shall pay, by way of penalty, a sum of five thousand rupees for every day during which the
failure continues, beginning from the day immediately following the day on which the period for furnishing
the information and document expires.
(3) If the failure referred to in sub-section (1) or sub-section (2) continues after an order has been served on
the entity, directing it to pay the penalty under sub-section (1) or, as the case may be, under sub-section (2),
then, notwithstanding anything contained in sub-section (1) or sub-section (2), the prescribed authority may
direct that such entity shall pay, by way of penalty, a sum of fifty thousand rupees for every day for which
such failure continues beginning from the date of service of such order.
(4) Where a reporting entity referred to in section 286 provides inaccurate information in the report
furnished in accordance with sub-section (2) of the said section and where—
(a) the entity has knowledge of the inaccuracy at the time of furnishing the report but fails to inform
the prescribed authority; or
(b) the entity discovers the inaccuracy after the report is furnished and fails to inform the prescribed
authority and furnish correct report within a period of fifteen days of such discovery; or
(c) the entity furnishes inaccurate information or document in response to the notice issued under
sub-section (6) of section 286,
then, the prescribed authority may direct that such person shall pay, by way of penalty, a sum of five lakh
rupees.
C. AUTHORITIES
No direct merits authority of note has developed; the candour rule applies. The provision is governed by the section 286 CbCR scheme and Rules 10DA-10DB.
1. Graduated default and inaccuracy
Principle — duration-sensitive per-day penalty
Proposition The penalty for non-furnishing escalates with the duration of default and the issuance of notices/orders; the computation must follow the statutory tiers in sub-sections (1)-(2).
Use Frames the quantum challenge to a CbCR non-filing penalty.
Principle — inaccuracy requires knowledge/constructive knowledge
Proposition The inaccuracy penalty requires that the entity knew or ought to have known of the inaccuracy, or discovered and failed to inform of it; a bona fide, corrected error with due diligence is not penalised.
Use The defence to an inaccurate-CbCR 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.