Reasonable Cause Defence

Section 470 — - REASONABLE CAUSE DEFENCE

Section 470 of the Income-tax Act, 2025 corresponds to s. 273B of the Income-tax Act, 1961.

STATUTORY ARCHITECTURE

Notwithstanding ss. 441, 442, 446, 448-468, no penalty if assessee proves reasonable cause for the failure. Statutory cushion of bona fide error or extraneous circumstance.

PRACTITIONER PLANNING NOTES

• Reasonable cause is fact-specific; document supporting evidence (illness, system breakdown, force majeure, professional advice received).
• CIT v. Eli Lilly and Co. (India) (2009) 312 ITR 225 (SC) -- bona fide ignorance can be reasonable cause.
• Reasonable cause is appellate ground; CIT(A) or ITAT often grants relief where AO refuses.

CROSS-REFERENCES

• s. 439 (under-reporting or misreporting -- master penalty).
• s. 440 (immunity application).
• s. 469 or 470 (waiver or reasonable-cause).
• s. 471 or 472 (procedure or limitation).