Section 271GC — Failure to Furnish Statement under Section 285 (Non-Resident Liaison Office, Etc.)
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live and new. Penalty for failure to furnish, within the prescribed period, the statement required under section 285 (by a non-resident having a liaison office in India, and similar reporting persons): Rs. 1,000 per day where the failure does not exceed three months, and Rs. 1,00,000 in any other case.
Finance Act, 2026: No amendment by the Finance Act, 2026.
Mechanism: A person required to furnish the section 285 statement fails to do so within the prescribed period → penalty of Rs. 1,000 per day (failure up to three months) or Rs. 1,00,000 (in any other case).
Litigation profile: No direct litigation yet (the section is recent). The candour rule applies.
A. COMMENTARY
A graduated reporting penalty for section 285 statements
Section 285 requires specified non-residents (notably those operating a liaison office in India) to furnish an annual statement of their activities. Section 271GC supplies a dedicated, graduated penalty for default: a modest per-day levy for short delays, escalating to a fixed Rs. 1,00,000 where the failure exceeds three months. The two-tier design tempers the consequence for minor delays while penalising prolonged non-reporting.
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 submit statement under section 285.
271GC. If any person who is required to furnish statement under section 285, fails to do so within the
period prescribed under that section, the Assessing Officer may direct that such person shall pay, by way
of penalty, a sum of—
(a) one thousand rupees for every day for which the failure continues, if the period of failure does
not exceed three months; or
(b) one lakh rupees in any other case.
C. AUTHORITIES
No direct authority exists; the candour rule applies. The provision is governed by the section 285 reporting obligation and Rule 114DA.
1. Graduated default
Principle — three-month threshold
Proposition A failure not exceeding three months attracts Rs. 1,000 per day; any longer failure attracts a fixed Rs. 1,00,000; the quantum turns on the duration of default.
Use Fixes the computation under the two-tier structure.
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 271GC — Failure to Furnish Statement under Section 285 (Non-Resident Liaison Office, Etc.)
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live and new. Penalty for failure to furnish, within the prescribed period, the statement required under section 285 (by a non-resident having a liaison office in India, and similar reporting persons): Rs. 1,000 per day where the failure does not exceed three months, and Rs. 1,00,000 in any other case.
Finance Act, 2026: No amendment by the Finance Act, 2026.
Mechanism: A person required to furnish the section 285 statement fails to do so within the prescribed period → penalty of Rs. 1,000 per day (failure up to three months) or Rs. 1,00,000 (in any other case).
Litigation profile: No direct litigation yet (the section is recent). The candour rule applies.
A. COMMENTARY
A graduated reporting penalty for section 285 statements
Section 285 requires specified non-residents (notably those operating a liaison office in India) to furnish an annual statement of their activities. Section 271GC supplies a dedicated, graduated penalty for default: a modest per-day levy for short delays, escalating to a fixed Rs. 1,00,000 where the failure exceeds three months. The two-tier design tempers the consequence for minor delays while penalising prolonged non-reporting.
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 submit statement under section 285.
271GC. If any person who is required to furnish statement under section 285, fails to do so within the
period prescribed under that section, the Assessing Officer may direct that such person shall pay, by way
of penalty, a sum of—
(a) one thousand rupees for every day for which the failure continues, if the period of failure does
not exceed three months; or
(b) one lakh rupees in any other case.
C. AUTHORITIES
No direct authority exists; the candour rule applies. The provision is governed by the section 285 reporting obligation and Rule 114DA.
1. Graduated default
Principle — three-month threshold
Proposition A failure not exceeding three months attracts Rs. 1,000 per day; any longer failure attracts a fixed Rs. 1,00,000; the quantum turns on the duration of default.
Use Fixes the computation under the two-tier structure.
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.