Penalty for failure to furnish report under section 172 (omitted)

Section 447 — PENALTY FOR FAILURE TO FURNISH REPORT UNDER SECTION 172 (OMITTED)

Section 447 was omitted by the Finance Act, 2026, w.e.f. 1-4-2026. Before its omission it corresponded to s. 271BA of the Income-tax Act, 1961.

STATUTORY ARCHITECTURE

Section 447 has been omitted by the Finance Act, 2026, w.e.f. 1-4-2026. The description below of how the section operated is the pre-2026 position, taken from the footnote recording its text before omission. Under that text, headed "Penalty for failure to furnish report under section 172", if any person failed to furnish a report from an accountant as required by s. 172, the Assessing Officer could impose a penalty of ₹100000 on that person. The trigger was the failure to furnish the accountant's report; the consequence was a fixed-sum penalty at the discretion of the Assessing Officer.

KEY ELEMENTS

• Pre-2026 position — person covered: "any person" required by s. 172 to furnish a report from an accountant.
• Pre-2026 position — default: failure to furnish that report.
• Pre-2026 position — authority: the Assessing Officer, who "may impose" the penalty.
• Pre-2026 position — amount: ₹100000, a fixed sum, not linked to the period of default.
• Current position — the section stands omitted w.e.f. 1-4-2026.
• Related amendment — the Finance Act, 2026 also substituted s. 428, headed "Fee for default in furnishing return of income, audited accounts and reports". Under its clause (d), a person who fails to furnish a report from an accountant as required by s. 172 is liable to pay by way of fee ₹50000 for a delay up to one month for which the failure continues, and ₹100000 thereafter.

CHANGES FROM THE 1961 ACT

Before its omission, s. 447 corresponded to s. 271BA of the 1961 Act, which provided that if any person failed to furnish a report from an accountant as required by s. 92E of the 1961 Act, the Assessing Officer "may direct" that the person pay a penalty of one hundred thousand rupees. The pre-2026 s. 447 carried this over with the cross-reference changed to s. 172 and the amount stated as ₹100000; "may direct that such person shall pay" became "may impose a penalty". With effect from 1-4-2026 the 2025 Act departs from the 1961 model: the discretionary penalty is omitted and the default is instead addressed by a graded fee under s. 428(d).

PRACTITIONER NOTES

• For defaults governed by the 2025 Act as amended, the relevant provision is s. 428(d), not s. 447.
• Under s. 428(d) the amount depends on the length of the delay: ₹50000 for a delay up to one month, ₹100000 thereafter.
• The pre-2026 penalty was discretionary ("may impose"); the s. 428(d) fee is expressed as a liability ("shall be liable to pay").
• Check the date of the default against the omission date of 1-4-2026 when identifying which regime is in point.

CROSS-REFERENCES

• s. 172 — the provision requiring the accountant's report whose non-furnishing was the trigger.
• s. 428(d) — fee for failure to furnish the s. 172 report, inserted by the Finance Act, 2026 substitution of s. 428.
• s. 271BA of the 1961 Act — corresponding provision before omission; s. 92E of the 1961 Act — the report requirement it referred to.