Section 271BA: Penalty for Failure to Furnish Transfer Pricing Report under Section 92E
Section 271BA provides a fixed penalty of Rs. 1,00,000 where a person fails to furnish the accountant's report required by Section 92E. The report is prescribed in Form 3CEB under Rule 10E.
What is Section 271BA of the Income-tax Act, 1961?
Section 271BA is a penalty provision in Chapter XXI of the Income-tax Act, 1961. It addresses failure to furnish the report of an accountant required by Section 92E. The provision was inserted by the Finance Act, 2001, with effect from 1 April 2002.
Statutory text of Section 271BA
If any person fails to furnish a report from an accountant as required by section 92E, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of one hundred thousand rupees.
This is a fixed-amount penalty, not a percentage of the value of the transaction. The statutory word may does not remove the need to examine the facts, the prescribed reporting obligation and available statutory defences.
Who is required to furnish a report under Section 92E?
Under Section 92E, a person entering into an international transaction or a specified domestic transaction during the relevant previous year must obtain a report from an accountant and furnish it in the prescribed form and manner by the specified date.
International transaction is defined under Section 92B and generally concerns qualifying transactions between associated enterprises, including cross-border arrangements meeting the statutory criteria. Specified domestic transaction is defined in Section 92BA and covers specified domestic dealings to which transfer-pricing requirements apply, subject to the statutory conditions and threshold.
Rule 10E prescribes Form No. 3CEB, which is to be verified by the accountant. The report is generally filed electronically in accordance with the applicable income-tax rules and portal procedures.
When is Form 3CEB due?
For the 1961 Act, the specified date is defined in Section 92F(iv) by reference to the income-tax return due date. The usual reporting deadline has been 31 October of the relevant assessment year for applicable transfer-pricing cases, subject to valid statutory or administrative extensions. Always check the deadline notified for the particular year.
Section 271BA penalty amount and reasonable-cause defence
| Provision | Default | Consequence under the 1961 Act |
|---|---|---|
| Section 271BA | Failure to furnish the accountant's report required by Section 92E | Rs. 1,00,000 |
| Section 273B | Reasonable cause established for the relevant failure | No penalty under Section 271BA where statutory requirements for relief are met |
| Section 271AA | Specified transfer-pricing documentation or reporting failures | Separate penalty rules may apply depending on the default |
| Section 271G | Failure to furnish specified transfer-pricing information or documents when required | Separate transaction-value-based penalty rules may apply |
Section 273B protects a person from penalty under Section 271BA if the person proves that there was reasonable cause for the failure. Whether a cause is reasonable depends on evidence and the particular circumstances; a mere assertion without records may be insufficient.
Before imposing a penalty, the applicable penalty-proceeding requirements, including a reasonable opportunity to be heard under Section 274, must be considered. The limitation provisions applicable to the relevant proceeding also matter.
Practical Form 3CEB compliance checklist
- Identify all international transactions and specified domestic transactions for the relevant period.
- Determine whether the transaction meets the statutory definitions and applicable thresholds.
- Maintain transfer-pricing information and supporting documentation required under Section 92D and relevant rules.
- Obtain a properly signed and verified Form 3CEB from the eligible accountant.
- Furnish the report electronically within the deadline applicable to the year.
- Retain filing acknowledgements, underlying records and any evidence supporting a reasonable-cause explanation for a delay or failure.
Income-tax Act, 2025: applicability and transition
The Income-tax Act, 2025 establishes a recast statutory framework applicable from 1 April 2026. For the 1961 Act, the accountant's-report requirement is in Section 92E; the official section-mapping document identifies Section 172 as its corresponding provision in the 2025 Act. The corresponding compliance and penalty provisions must be read with the 2025 Act, rules, commencement provisions and any subsequent amendments.
Do not assume that the numbering or penalty treatment under the 1961 Act automatically governs every later tax year. Where proceedings concern an earlier year, check the applicable savings and transitional provisions and the law governing that year.
Frequently asked questions
What is the penalty under Section 271BA?
For failure to furnish the accountant report required under Section 92E, the Assessing Officer may impose a penalty of Rs. 1,00,000.
Which form is prescribed under Section 92E?
Rule 10E prescribes Form 3CEB for reporting international transactions and specified domestic transactions.
Can the penalty be avoided for reasonable cause?
Section 273B provides relief where the taxpayer proves reasonable cause for the relevant failure.
Official statutory references
- Income Tax Department: Section 271BA
- Income Tax Department: Section 92E
- Income Tax Department: Rule 10E and Form 3CEB
- Income Tax Department: Transfer Pricing guidance
- Income Tax Department: Penalty and reasonable-cause guidance
- Income Tax Department: 2025 Act section-mapping reference
This article is general legal information, not advice for a particular assessment or proceeding. Check the law and filing notifications applicable to the relevant tax year.