Income Tax Law / Penalties / TAN Compliance
Section 272BB of Income-tax Act, 1961: Penalty for TAN Non-compliance
Section 272BB prescribes a penalty for failure to comply with Section 203A concerning the Tax Deduction and Collection Account Number (TAN), and for knowingly quoting a false TAN in specified documents. The provision also guarantees an opportunity of being heard.
Penalty: Rs. 10,000 under Section 272BB(1) for non-compliance with Section 203A; Rs. 10,000 under Section 272BB(1A) for knowingly quoting a false number. Relief may be available for reasonable cause under Section 273B.
What is TAN and what does Section 203A require?
TAN stands for Tax Deduction and Collection Account Number. It is a ten-character alphanumeric identifier issued by the Income Tax Department to persons responsible for deducting tax at source (TDS) or collecting tax at source (TCS). Section 203A of the Income-tax Act, 1961 generally requires eligible persons to obtain TAN and quote it in prescribed TDS/TCS challans, certificates, statements and other documents.
Specific statutory exceptions exist, including certain individual and HUF transactions where PAN may be quoted instead of TAN. Check the applicable provision and transaction before applying for TAN.
Section 272BB explained subsection by subsection
Section 272BB(1): Failure to comply with Section 203A
If a person fails to comply with Section 203A, the Assessing Officer may impose a penalty of Rs. 10,000 under Section 272BB(1). This includes a failure to obtain or quote TAN where required by law.
Section 272BB(1A): Knowingly quoting a false TAN
A person required to quote a tax deduction account number, tax collection account number, or tax deduction and collection account number in documents described in Section 203A(2) may face a penalty of Rs. 10,000 if the number quoted is false and the person knows or believes it to be false, or does not believe it to be true. The statutory knowledge requirement is important: not every accidental typing error automatically satisfies it.
Section 272BB(2): Right to be heard
No penalty order under subsection (1) or (1A) can be passed without giving the affected person an opportunity of being heard. A taxpayer should respond to the notice and supply documents supporting compliance or explaining the failure.
Reasonable-cause protection under Section 273B
Section 273B provides that no penalty is imposable for a failure covered by Section 272BB(1) or (1A) if the person proves that there was reasonable cause for the failure. The explanation should be supported by relevant records; relief is not automatic.
Practical compliance examples
- Failure to obtain TAN: A business that must deduct TDS but does not obtain TAN may face penalty under Section 272BB(1).
- Incorrect TAN in a statement: A deliberate quotation of a TAN known to be false may attract Section 272BB(1A).
- Documented technical difficulty: Evidence of circumstances beyond the taxpayer's control may support a reasonable-cause explanation under Section 273B, depending on the facts.
Income-tax Act, 2025: Corresponding provision
The Income-tax Act, 2025 applies from 1 April 2026. The official legislative section-mapping navigator identifies Section 468 as corresponding to Section 272BB of the Income-tax Act, 1961. For a particular default, the relevant tax year, commencement and saving or transitional provisions should be checked before identifying the governing law.
Legislative history
Section 272BB was introduced with effect from 1 June 1987. The penalty amount was changed to Rs. 10,000 with effect from 1 June 2001. Subsection (1A), addressing knowingly false TAN quotation, was introduced with effect from 1 June 2006.
Official references and guidance
- Income Tax Department: Section 272BB
- Income Tax Department: Section 273B
- Income Tax e-Filing: Know TAN FAQs
- Income-tax Act, 1961, as amended by Finance Act, 2025
- Official section-mapping navigator
Frequently asked questions
What is the penalty for not obtaining TAN?
Section 272BB(1) specifies Rs. 10,000 for failure to comply with Section 203A, subject to the applicable law and available defences.
Is quoting an incorrect TAN always penalised?
Section 272BB(1A) concerns a false number quoted with the specified knowledge or belief. The facts, evidence and any reasonable-cause defence matter.
Can the Assessing Officer impose a penalty without a hearing?
No. Section 272BB(2) requires an opportunity of being heard before the penalty order.
This article provides general legal information and does not substitute for advice on a particular notice or proceeding. Last reviewed: 28 October 2026.