Sections 272BB and 272BBB of Income Tax Act 1961
Section 272BB deals with failure to comply with section 203A relating to the Tax Deduction and Collection Account Number, commonly called TAN, and with knowingly quoting a false number. Section 272BBB is now historical in operation and applies only to a failure, before 1 October 2004, to comply with former section 206CA.
Section 272BB - Penalty for Section 203A Default
Section 203A requires a person deducting or collecting tax under the relevant provisions of Chapter XVII who has not been allotted the required account number to apply for a Tax Deduction and Collection Account Number within the prescribed time. Once allotted, the number must be quoted in the challans, certificates, statements, returns and other prescribed documents specified by section 203A.
False TAN or Related Account Number
Section 272BB(1A) separately applies where a person required to quote a tax deduction account number, tax collection account number or tax deduction and collection account number in documents covered by section 203A(2) quotes a number that is false and that the person knows or believes to be false, or does not believe to be true. The penalty is Rs. 10,000.
| Provision | Default | Penalty |
|---|---|---|
| Section 272BB(1) | Failure to comply with section 203A | Rs. 10,000 |
| Section 272BB(1A) | Knowingly or otherwise culpably quoting a false TAN or corresponding account number in a document covered by section 203A(2) | Rs. 10,000 |
| Section 272BBB(1) | Failure before 1 October 2004 to comply with former section 206CA | Rs. 10,000 |
Opportunity of Being Heard
No penalty order under section 272BB(1) or 272BB(1A) may be passed unless the person proposed to be penalised is given an opportunity of being heard. Section 272BBB contains the same hearing safeguard for a penalty under that historical provision.
Reasonable Cause under Section 273B
Section 273B provides an important statutory protection. Penalty is not imposable for failures covered by section 272BB(1), section 272BB(1A) or section 272BBB(1) if the person proves that there was reasonable cause for the failure. Whether reasonable cause is established depends on the facts and evidence of the particular case.
Section 272BBB - Historical Provision
Section 272BBB should not be presented as a current penalty for present-day TCS registration. Its text expressly applies only where a person failed, before 1 October 2004, to comply with section 206CA. The separate tax collection account number requirement was rationalised into the common TAN framework under section 203A, making section 272BBB inoperative for failures on or after that date.
Official Resources
Income Tax Department - Section 272BB
Income Tax Department - Section 272BBB
Income Tax Department - Section 203A