Section 272BB — Penalty for Failure to Comply with the Provisions of Section 203A (TAN)
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live. A penalty of Rs. 10,000 for failure to comply with section 203A (obtaining a Tax Deduction/Collection Account Number, and quoting it in challans, certificates, statements and other prescribed documents). No penalty without an opportunity of being heard; subject to reasonable cause under section 273B.
Finance Act, 2026: No amendment by the Finance Act, 2026.
Mechanism: Failure to apply for/obtain TAN, or to quote (or to quote a correct) TAN in the prescribed documents → penalty of Rs. 10,000 → after opportunity of being heard, and subject to reasonable cause under section 273B.
Litigation profile: Lightly litigated. The issues parallel section 272B: opportunity, reasonable cause, and bona fide/corrected error.
A. COMMENTARY
Enforcing the TAN regime
Section 272BB backs section 203A, which requires deductors/collectors to obtain a TAN and quote it in TDS/TCS challans, certificates and statements. The penalty is Rs. 10,000 for default, leviable only after a reasonable opportunity of being heard, and is within section 273B.
Reasonable cause and bona fide error
A bona fide failure to quote, or quoting an incorrect TAN since corrected, or genuine difficulty in obtaining TAN, constitutes reasonable cause. As with section 272B, the opportunity requirement and the discretionary character of the penalty guard against mechanical levy.
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 the provisions of section 203A.
272BB. (1) If a person fails to comply with the provisions of section 203A, he shall, on an order passed by
the Assessing Officer, pay, by way of penalty, a sum of ten thousand rupees.
(1A) If a person who is required to quote his "tax deduction account number" or, as the case may be, "tax
collection account number" or "tax deduction and collection account number" in the challans or certificates
or statements or other documents referred to in sub-section (2) of section 203A, quotes a number which is
false, and which he either knows or believes to be false or does not believe to be true, the Assessing Officer
may direct that such person shall pay, by way of penalty, a sum of ten thousand rupees.
(2) No order under sub-section (1) or sub-section (1A) shall be passed unless the person on whom the
penalty is proposed to be imposed is given an opportunity of being heard in the matter.
C. AUTHORITIES
Direct authority is limited; the candour rule applies. The governing safeguards mirror section 272B.
1. Opportunity and reasonable cause
Principle — opportunity mandatory; bona fide error excused
Proposition A section 272BB penalty requires a prior opportunity of being heard; a bona fide failure or a corrected TAN error is reasonable cause under section 273B and defeats the penalty.
Use The combined procedural and substantive defence to a 272BB levy.
Hindustan Steel Ltd v. State of Orissa (1972) 83 ITR 26 (SC)
Holding Penalty for a technical/bona fide default is not to be imposed; discretion governs.
Use Resists mechanical 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 272BB — Penalty for Failure to Comply with the Provisions of Section 203A (TAN)
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live. A penalty of Rs. 10,000 for failure to comply with section 203A (obtaining a Tax Deduction/Collection Account Number, and quoting it in challans, certificates, statements and other prescribed documents). No penalty without an opportunity of being heard; subject to reasonable cause under section 273B.
Finance Act, 2026: No amendment by the Finance Act, 2026.
Mechanism: Failure to apply for/obtain TAN, or to quote (or to quote a correct) TAN in the prescribed documents → penalty of Rs. 10,000 → after opportunity of being heard, and subject to reasonable cause under section 273B.
Litigation profile: Lightly litigated. The issues parallel section 272B: opportunity, reasonable cause, and bona fide/corrected error.
A. COMMENTARY
Enforcing the TAN regime
Section 272BB backs section 203A, which requires deductors/collectors to obtain a TAN and quote it in TDS/TCS challans, certificates and statements. The penalty is Rs. 10,000 for default, leviable only after a reasonable opportunity of being heard, and is within section 273B.
Reasonable cause and bona fide error
A bona fide failure to quote, or quoting an incorrect TAN since corrected, or genuine difficulty in obtaining TAN, constitutes reasonable cause. As with section 272B, the opportunity requirement and the discretionary character of the penalty guard against mechanical levy.
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 the provisions of section 203A.
272BB. (1) If a person fails to comply with the provisions of section 203A, he shall, on an order passed by
the Assessing Officer, pay, by way of penalty, a sum of ten thousand rupees.
(1A) If a person who is required to quote his "tax deduction account number" or, as the case may be, "tax
collection account number" or "tax deduction and collection account number" in the challans or certificates
or statements or other documents referred to in sub-section (2) of section 203A, quotes a number which is
false, and which he either knows or believes to be false or does not believe to be true, the Assessing Officer
may direct that such person shall pay, by way of penalty, a sum of ten thousand rupees.
(2) No order under sub-section (1) or sub-section (1A) shall be passed unless the person on whom the
penalty is proposed to be imposed is given an opportunity of being heard in the matter.
C. AUTHORITIES
Direct authority is limited; the candour rule applies. The governing safeguards mirror section 272B.
1. Opportunity and reasonable cause
Principle — opportunity mandatory; bona fide error excused
Proposition A section 272BB penalty requires a prior opportunity of being heard; a bona fide failure or a corrected TAN error is reasonable cause under section 273B and defeats the penalty.
Use The combined procedural and substantive defence to a 272BB levy.
Hindustan Steel Ltd v. State of Orissa (1972) 83 ITR 26 (SC)
Holding Penalty for a technical/bona fide default is not to be imposed; discretion governs.
Use Resists mechanical 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.