Section 271H — Failure to Furnish TDS/TCS Statements or Furnishing Incorrect Information
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live and heavily litigated. Penalty between Rs. 10,000 and Rs. 1,00,000 for failure to deliver the TDS/TCS statements within the time prescribed (section 200(3)/proviso to section 206C(3)), or for furnishing incorrect information in them. Sub-section (3) provides a complete shelter where the tax with fee/interest is paid and the statement filed within one year; subject also to reasonable cause under section 273B.
Finance Act, 2026: No amendment by the Finance Act, 2026.
Mechanism: Failure to file the TDS/TCS statement in time, or furnishing incorrect information → penalty of Rs. 10,000 to Rs. 1,00,000 → BUT no penalty (sub-section (3)) where the TDS/TCS with fee and interest is paid and the statement is delivered within one year of the prescribed time; and reasonable cause under section 273B otherwise applies.
Litigation profile: Heavily litigated, principally on (i) the sub-section (3) one-year shelter; (ii) the interplay with the section 234E late-filing fee (the two are distinct and cumulative, but the section 271H penalty is discretionary and excused on reasonable cause); and (iii) reasonable cause for delayed filing.
A. COMMENTARY
Two defaults: late statement and incorrect information
Section 271H penalises both the late filing of the quarterly TDS/TCS statements and the furnishing of incorrect information in them, with a discretionary penalty band of Rs. 10,000 to Rs. 1,00,000. It is distinct from the automatic section 234E fee, which compensates for late filing irrespective of cause; section 271H, by contrast, is discretionary and avoidable.
The sub-section (3) one-year shelter
Sub-section (3) is a powerful and frequently-decisive shelter: no penalty is to be levied for the late-filing default (section 271H(1)(a)) if the person has paid the tax deducted/collected together with the fee and interest, and has delivered the statement, before the expiry of one year from the time prescribed. A deductor who regularises within a year escapes the section 271H penalty altogether (though the section 234E fee may still apply).
Reasonable cause and discretion
Beyond sub-section (3), section 271H is within section 273B; a bona fide cause for the delay or for the incorrect information — system/portal issues, late availability of PAN/challan data, genuine clerical error since corrected — constitutes reasonable cause. The discretionary band (the authority "may direct") reinforces that the maximum is not to be levied mechanically.
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 statements, etc.
271H. (1) Without prejudice to the provisions of the Act, the Assessing Officer may direct that a person
shall pay by way of penalty, if, he—
(a) fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of
(b) furnishes incorrect information in the statement which is required to be delivered or caused to be
delivered under sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C.
(2) The penalty referred to in sub-section (1) shall be a sum which shall not be less than ten thousand rupees
but which may extend to one lakh rupees.
(3) Notwithstanding anything contained in the foregoing provisions of this section, no penalty shall be levied
for the failure referred to in clause (a) of sub-section (1), if the person proves that after paying tax deducted
or collected along with the fee and interest, if any, to the credit of the Central Government, he had delivered
or cause to be delivered the statement referred to in sub-section (3) of section 200 or the proviso to
sub-section (3) of section 206C before the expiry of a period of one month from the time prescribed for
delivering or causing to be delivered such statement.
(4) The provisions of this section shall apply to a statement referred to in sub-section (3) of section 200 or
the proviso to sub-section (3) of section 206C which is to be delivered or caused to be delivered for tax
deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012.
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
The authorities and settled propositions concern the sub-section (3) one-year shelter, the distinction from the section 234E fee, and the section 273B reasonable-cause defence applied by the Tribunal. The candour rule is observed where named authority is thin.
1. The sub-section (3) one-year shelter
Principle — regularisation within one year bars the penalty
Proposition Where the deductor/collector pays the TDS/TCS with fee and interest and files the statement within one year of the prescribed time, no penalty under section 271H(1)(a) is leviable for the late-filing default. (The Finance (No.2) Act, 2024 reduced this window for defaults from 1-4-2025; the one-year shelter governs earlier defaults.)
Use The complete and most-used defence for delayed statements.
2. Distinct from the section 234E fee; the 234E learning
Fatheraj Singhvi v. Union of India (2016) 289 CTR 602 / 73 taxmann.com 252 (Karn)(HC)
Holding No fee under section 234E could be levied for periods before 1-6-2015 (when section 200A acquired the enabling machinery to compute it); the late-filing consequence has a defined statutory basis.
Use Cited to separate the compensatory 234E fee from the discretionary 271H penalty and to fix the periods each governs.
Rajesh Kourani v. Union of India (2017) 297 CTR 502 / 83 taxmann.com 137 (Guj)(HC)
Holding Section 234E is a charging provision for the fee and operates independently of section 200A; the fee is leviable for late filing of TDS statements.
Use The contrasting High Court view on 234E; underscores that the 234E fee, unlike the 271H penalty, is not discretionary.
Principle — 234E fee and 271H penalty differ in character
Proposition The section 234E fee is compensatory and automatic; the section 271H penalty is discretionary and excusable on reasonable cause or under sub-section (3). The two operate in different fields.
Use Separates the unavoidable fee from the avoidable penalty in advising deductors.
Principle — bona fide cause deletes the penalty (ITAT Ahmedabad and other benches)
Proposition A bona fide cause for delay or for the incorrect information — system/portal failure, late availability of PAN/challan data, genuine clerical error since corrected — is reasonable cause under section 273B; the Tribunal deletes the penalty.
Use The substantive reasonable-cause defence at the Tribunal.
Hindustan Steel Ltd v. State of Orissa (1972) 83 ITR 26 (SC)
Holding Penalty for a technical/venial or bona fide default ought not to be imposed; discretion is to be exercised judicially.
Use Supports deletion of a 271H penalty where the delay/error is bona fide.
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 271H — Failure to Furnish TDS/TCS Statements or Furnishing Incorrect Information
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live and heavily litigated. Penalty between Rs. 10,000 and Rs. 1,00,000 for failure to deliver the TDS/TCS statements within the time prescribed (section 200(3)/proviso to section 206C(3)), or for furnishing incorrect information in them. Sub-section (3) provides a complete shelter where the tax with fee/interest is paid and the statement filed within one year; subject also to reasonable cause under section 273B.
Finance Act, 2026: No amendment by the Finance Act, 2026.
Mechanism: Failure to file the TDS/TCS statement in time, or furnishing incorrect information → penalty of Rs. 10,000 to Rs. 1,00,000 → BUT no penalty (sub-section (3)) where the TDS/TCS with fee and interest is paid and the statement is delivered within one year of the prescribed time; and reasonable cause under section 273B otherwise applies.
Litigation profile: Heavily litigated, principally on (i) the sub-section (3) one-year shelter; (ii) the interplay with the section 234E late-filing fee (the two are distinct and cumulative, but the section 271H penalty is discretionary and excused on reasonable cause); and (iii) reasonable cause for delayed filing.
A. COMMENTARY
Two defaults: late statement and incorrect information
Section 271H penalises both the late filing of the quarterly TDS/TCS statements and the furnishing of incorrect information in them, with a discretionary penalty band of Rs. 10,000 to Rs. 1,00,000. It is distinct from the automatic section 234E fee, which compensates for late filing irrespective of cause; section 271H, by contrast, is discretionary and avoidable.
The sub-section (3) one-year shelter
Sub-section (3) is a powerful and frequently-decisive shelter: no penalty is to be levied for the late-filing default (section 271H(1)(a)) if the person has paid the tax deducted/collected together with the fee and interest, and has delivered the statement, before the expiry of one year from the time prescribed. A deductor who regularises within a year escapes the section 271H penalty altogether (though the section 234E fee may still apply).
Reasonable cause and discretion
Beyond sub-section (3), section 271H is within section 273B; a bona fide cause for the delay or for the incorrect information — system/portal issues, late availability of PAN/challan data, genuine clerical error since corrected — constitutes reasonable cause. The discretionary band (the authority "may direct") reinforces that the maximum is not to be levied mechanically.
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 statements, etc.
271H. (1) Without prejudice to the provisions of the Act, the Assessing Officer may direct that a person
shall pay by way of penalty, if, he—
(a) fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of
section 200 or the proviso to sub-section (3) of section 206C; or
(b) furnishes incorrect information in the statement which is required to be delivered or caused to be
delivered under sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C.
(2) The penalty referred to in sub-section (1) shall be a sum which shall not be less than ten thousand rupees
but which may extend to one lakh rupees.
(3) Notwithstanding anything contained in the foregoing provisions of this section, no penalty shall be levied
for the failure referred to in clause (a) of sub-section (1), if the person proves that after paying tax deducted
or collected along with the fee and interest, if any, to the credit of the Central Government, he had delivered
or cause to be delivered the statement referred to in sub-section (3) of section 200 or the proviso to
sub-section (3) of section 206C before the expiry of a period of one month from the time prescribed for
delivering or causing to be delivered such statement.
(4) The provisions of this section shall apply to a statement referred to in sub-section (3) of section 200 or
the proviso to sub-section (3) of section 206C which is to be delivered or caused to be delivered for tax
deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012.
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
The authorities and settled propositions concern the sub-section (3) one-year shelter, the distinction from the section 234E fee, and the section 273B reasonable-cause defence applied by the Tribunal. The candour rule is observed where named authority is thin.
1. The sub-section (3) one-year shelter
Principle — regularisation within one year bars the penalty
Proposition Where the deductor/collector pays the TDS/TCS with fee and interest and files the statement within one year of the prescribed time, no penalty under section 271H(1)(a) is leviable for the late-filing default. (The Finance (No.2) Act, 2024 reduced this window for defaults from 1-4-2025; the one-year shelter governs earlier defaults.)
Use The complete and most-used defence for delayed statements.
2. Distinct from the section 234E fee; the 234E learning
Fatheraj Singhvi v. Union of India (2016) 289 CTR 602 / 73 taxmann.com 252 (Karn)(HC)
Holding No fee under section 234E could be levied for periods before 1-6-2015 (when section 200A acquired the enabling machinery to compute it); the late-filing consequence has a defined statutory basis.
Use Cited to separate the compensatory 234E fee from the discretionary 271H penalty and to fix the periods each governs.
Rajesh Kourani v. Union of India (2017) 297 CTR 502 / 83 taxmann.com 137 (Guj)(HC)
Holding Section 234E is a charging provision for the fee and operates independently of section 200A; the fee is leviable for late filing of TDS statements.
Use The contrasting High Court view on 234E; underscores that the 234E fee, unlike the 271H penalty, is not discretionary.
Principle — 234E fee and 271H penalty differ in character
Proposition The section 234E fee is compensatory and automatic; the section 271H penalty is discretionary and excusable on reasonable cause or under sub-section (3). The two operate in different fields.
Use Separates the unavoidable fee from the avoidable penalty in advising deductors.
3. Reasonable cause and discretion (section 273B)
Principle — bona fide cause deletes the penalty (ITAT Ahmedabad and other benches)
Proposition A bona fide cause for delay or for the incorrect information — system/portal failure, late availability of PAN/challan data, genuine clerical error since corrected — is reasonable cause under section 273B; the Tribunal deletes the penalty.
Use The substantive reasonable-cause defence at the Tribunal.
Hindustan Steel Ltd v. State of Orissa (1972) 83 ITR 26 (SC)
Holding Penalty for a technical/venial or bona fide default ought not to be imposed; discretion is to be exercised judicially.
Use Supports deletion of a 271H penalty where the delay/error is bona fide.
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.