Penalty for failure to furnish Statement of financial transaction or reportable account [Section 271FA] :
Section 271FA provides that if a person who is required to furnish a statement of financial transaction or reportable account, as required under section 285BA(1), fails to furnish such statement within the time prescribed under section 285BA(2), the prescribed income-tax authority [i.e., Director of Income-tax (Central Information Branch)] may direct that such person shall pay, by way of penalty, a sum of Rs 100 for every day during which the failure continues.
Further, where such person fails to furnish the statement of financial transaction or reportable account within the period specified in the notice under section 285BA(5), he shall pay, by way of penalty, a sum of five hundred rupees for every day during which the failure continues, beginning from the day immediately following the day on which the time specified in such notice for furnishing the statement expires.
The penal provisions under section 271FA are summarized below –
| Non-compliance of section | Penalty under section 271FA | Period |
| 285BA(1) | Rs 100 per day of continuing default | 1st September immediately following the financial year in which the transaction is registered or recorded till the date of furnishing the statement of financial transaction or reportable account or the date of expiry of the time specified in the notice under section 285BA(5), whichever is earlier. |
| 285BA(5) | Rs 500 per day of continuing default | The day immediately following the day on which the time specified in notice under section 285BA(5) for furnishing the statement expires till the date of furnishing of statement. |
Illustration
A private bank has not filed its statement of financial transaction or reportable account in relation to the specified financial transactions for the financial year 2015-16. A notice was issued by the prescribed income-tax authority on 1st October, 2016 requiring the bank to furnish the statement by 31st October, 2016. The bank, however, furnished the statement only on 15th November, 2016. What would be the penalty leviable under section 271FA?
Answer
| (1) | (2) | (3) | (4) | |
| Non-compliance of section | Penalty under section 271FA | Period | Quantum of penalty under section 271FA | |
| (2) × (3) | (Rs) | |||
| 285BA(1) | Rs 100 per day of continuing default | 1.9.2016 to 31.10.2016 | 61 days × Rs 100 | 6,100 |
| 285BA(5) | Rs 500 per day of continuing default | 1.11.2016 to 15.11.2016 | 15 days × Rs 500 | 7,500 |
| 13,600 | ||||