Penalty and Prosecution for failure to collect tax at source [ Section 271CA and section 276BB ] - Income Tax - Ready Reckoner - Income Tax

Penalty for failure to collect tax at source [ Section 271CA ] If any person fails to collect the whole or any part of the tax as required by or under the provisions of Chapter XVII-BB , then, such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to collect as aforesaid. such penalty shall be imposed by the Joint Commissioner. In other words, Penalty under Section 271CA shall be imposed if a person fails to collect the whole or any part of tax which is required to be collected in accordance with Section 206C .​ Prosecution [ Section 276BB ] If a person fails to pay to the credit of the Central Government, the tax collected by him as required under the provisions of section 206C, he shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine. Guidelines for Compounding of any Offences under the Income-Tax Act, 1961.