Income Tax Law / Penalty Provisions

Section 272AA of the Income-tax Act, 1961: Penalty for Failure to Comply with Section 133B

Section 272AA addresses non-compliance with the information-gathering powers provided under Section 133B of the Income-tax Act, 1961. It provides for a penalty of up to Rs. 1,000, subject to an opportunity of being heard.

At a glance: Section 133B concerns the collection of information by income-tax authorities. Under Section 272AA(1), a failure to comply may attract a penalty not exceeding Rs. 1,000. Section 272AA(2) requires a hearing before the penalty order is made.

What does Section 272AA provide?

Section 272AA falls within Chapter XXI, dealing with penalties under the Income-tax Act, 1961. Sub-section (1) permits the specified income-tax authority to impose a penalty where a person fails to comply with Section 133B. The penalty is capped at Rs. 1,000; the provision does not prescribe an automatic fixed penalty of Rs. 1,000 in every case.

Sub-section (2) protects procedural fairness: the proposed recipient of the penalty must first receive an opportunity of being heard. See the official text of Section 272AA.

Meaning and scope of Section 133B

Section 133B deals with the power of an income-tax authority to collect information useful or relevant for purposes of the Act. Subject to statutory conditions, authorised officers may enter business premises, seek information about business activities and verify specified records. This information-gathering power is distinct from the broader search and seizure provisions.

Failure to cooperate with a lawful exercise of these powers can give rise to proceedings under Section 272AA. Whether a particular request was within statutory authority, and whether the alleged conduct amounts to non-compliance, depends on the facts and the law applicable to the relevant period.

Penalty amount and competent authority

Provision	Legal effect
Section 272AA(1)	Penalty up to Rs. 1,000 for failure to comply with Section 133B.
Authority	Joint Commissioner, Assistant Director, Deputy Director or Assessing Officer, as applicable.
Section 272AA(2)	Opportunity of being heard is mandatory before a penalty order.

Procedure and right to respond

Before imposing the penalty, the authority must give the person concerned an opportunity to explain the alleged default. A response should address the information requested, the authority exercising the power, the actual circumstances of compliance or non-compliance and any relevant supporting records.

The wording of Section 272AA does not make the maximum penalty inevitable. Questions of lawful exercise of powers, evidence and any other applicable statutory safeguards should be examined in the individual case.

Legislative background

Section 272AA was inserted by the Finance Act, 1986 with effect from 13 May 1986. The earlier words "without reasonable cause" were omitted with effect from 10 September 1986. Subsequent amendments updated the designations of the authorities empowered to impose the penalty. These historical changes are relevant when interpreting older records and orders.

Income-tax Act, 2025 and transitional relevance

The Income-tax Act, 2025 came into effect on 1 April 2026. Section 272AA is a provision of the Income-tax Act, 1961 and remains relevant when that earlier enactment governs a proceeding, subject to the applicable repeal, savings and transitional provisions. For matters governed by the 2025 Act, the corresponding provisions of that Act should be consulted rather than assuming that the old section number continues unchanged.

For the statutory framework and official updates, consult the Income Tax e-Filing Portal and the Income Tax Department.

Frequently asked questions

What is the maximum penalty under Section 272AA?

The maximum penalty stated in Section 272AA(1) is Rs. 1,000.

Can a penalty be imposed without hearing the person?

No. Section 272AA(2) expressly requires an opportunity of being heard before an order under sub-section (1) is passed.

What is the connection between Sections 133B and 272AA?

Section 133B provides information-collection powers; Section 272AA prescribes the penalty for failure to comply with those provisions.

Does Section 272AA automatically apply to proceedings under the 2025 Act?

No. The applicable enactment and transitional provisions must be checked for the relevant period and proceeding.

Official references

Updated: 28 October 2026. This article is for general legal information. The statutory text and transitional rules applicable to a particular case should be verified before taking action.