Section 272B of the Income-tax Act, 1961: Penalty for PAN and Aadhaar Non-Compliance
Section 272B prescribes penalties for specified failures to comply with Section 139A, including obligations concerning Permanent Account Number (PAN) and, where applicable, Aadhaar. This guide explains the different defaults, penalty amounts, procedural safeguards and available relief.
What is Section 139A?
Section 139A of the Income-tax Act, 1961 governs application for and allotment of PAN, and specified requirements to quote, intimate or authenticate PAN or Aadhaar. Relevant transactions and documentation requirements are supplemented by the Income-tax Rules, 1962, including Rule 114B for prescribed transactions.
Section 272B: Explanation of each sub-section
| Provision | Default covered | Penalty |
|---|---|---|
| 272B(1) | Failure to comply with Section 139A, such as a requirement to obtain PAN. | Rs. 10,000 |
| 272B(2) | Knowingly or recklessly quoting or intimating a false PAN or Aadhaar number in specified circumstances under Section 139A(5). | Rs. 10,000 for each default |
| 272B(2A) | Failure to quote or authenticate PAN or Aadhaar in transactions covered by Section 139A(6A). | Rs. 10,000 for each default |
| 272B(2B) | Failure by a person responsible for ensuring prescribed PAN or Aadhaar quotation or authentication in covered transactions. | Rs. 10,000 for each default |
| 272B(3) | Requires an opportunity of being heard before any penalty order under the preceding sub-sections. | Procedural protection |
Examples of PAN and Aadhaar defaults
Depending on the applicable legal requirement, defaults can include failing to apply for PAN when required, not quoting PAN or Aadhaar in prescribed financial transaction documents, not providing the required number to a deductor or collector, failing to authenticate the number, or deliberately quoting a false number. Holding multiple PANs can also raise compliance concerns.
Can the penalty be avoided for reasonable cause?
Yes, where Section 273B applies. It provides that a penalty under Section 272B shall not be imposed if the person proves that there was reasonable cause for the failure. Supporting records, explanations and the circumstances of the default are therefore important. This is not an automatic exemption.
Notice, hearing and penalty order
Under Section 272B(3), a person must be given an opportunity of being heard before the Assessing Officer imposes a penalty. Section 274 also contains procedural safeguards for penalty proceedings. A person receiving a notice should check the exact alleged default, relevant dates and documents, and respond within the prescribed period.
Income-tax Act, 2025: Applicability from 1 April 2026
The Income-tax Act, 2025 came into force on 1 April 2026. For any case, the applicable legislation must be determined by the relevant tax year, date of default and statutory transition or saving provisions. Section 272B remains important for matters governed by the Income-tax Act, 1961. Do not assume that historical section numbers carry over unchanged into the new Act.
Frequently asked questions
What is the penalty for not quoting PAN?
Where the relevant obligation under Section 139A and the applicable clause of Section 272B are established, the penalty can be Rs. 10,000 per specified default.
Is a penalty automatic for an incorrect PAN?
No. The precise statutory ingredients must be satisfied. In particular, Section 272B(2) addresses a false number quoted or intimated with the specified knowledge or belief, and a hearing must be offered.
Does Section 273B provide relief?
Yes. A person who proves reasonable cause for a covered failure may be protected against penalty under Section 272B.
Official statutory references
- Income Tax Department - Section 272B
- Income Tax Department - When Section 272B penalty may be imposed
- Income Tax Department - Penalties and prosecutions, including Section 273B
- Income Tax e-Filing Portal
Legal information only. The applicable version of the legislation, rules, notifications and transitional provisions should be checked for the facts and period concerned. Updated: 28 October 2026.