Section 44 IT Act: Penalty for failure to furnish information, return, etc
Information Technology Act, 2000
Section 44 IT Act at a Glance
Section 44 IT Act sets civil penalties for failing to file required returns or documents, or failing to maintain required records. Penalties go up to ₹15 lakh per failure, ₹50,000 per day, or ₹1 lakh per day.
Section 44 IT Act Bare Act Text
44. Penalty for failure to furnish information, return, etc.
If any person who is required under this Act or any rules or regulations made thereunder to—
(a) furnish any document, return or report to the Controller or the Certifying Authority fails to furnish the same, he shall be liable to a penalty not exceeding fifteen lakh rupees for each such failure;
(b) file any return or furnish any information, books or other documents within the time specified therefor in the regulations fails to file return or furnish the same within the time specified therefor in the regulations, he shall be liable to a penalty not exceeding fifty thousand rupees for every day during which such failure continues;
(c) maintain books of account or records, fails to maintain the same, he shall be liable to a penalty not exceeding one lakh rupees for every day during which the failure continues.
Amendments to this section
- Subs. by Act 18 of 2023, s. 2 and Schedule, for "one lakh and fifty thousand" (w.e.f. 30-11-2023).
- Subs. by ibid., s. 2 and Schedule, for "five thousand" (w.e.f. 30-11-2023).
- Subs. by ibid., s. 2 and Schedule, for "ten thousand" (w.e.f. 30-11-2023).
Section 44 IT Act in Simple Words
Section 44 IT Act imposes civil monetary penalties on any person who is required under the IT Act, or under any rules or regulations made under the IT Act, to submit specified filings or keep specified records and fails to do so. These amounts are civil penalties, not punishments for an offence.
Section 44 IT Act covers three distinct compliance failures. Under clause (a), if a person required to furnish any document, return, or report to the Controller or the Certifying Authority fails to furnish it, that person is liable to a penalty of up to ₹15 lakh for each failure. Under clause (b), if a person required to file any return or furnish any information, books, or other documents within the time specified in the regulations fails to do so within that specified time, that person is liable to a penalty of up to ₹50,000 for every day during which the failure continues.
Under clause (c) of Section 44 IT Act, if a person required to maintain books of account or records fails to maintain them, that person is liable to a penalty of up to ₹1 lakh for every day during which the failure continues. Clause (a) sets a cap for each failure, whereas clauses (b) and (c) set daily caps that run for every day the failure continues.
Act 18 of 2023 raised these maximum penalty amounts with effect from 30 November 2023, substituting the present figures for the earlier words "one lakh and fifty thousand", "five thousand", and "ten thousand". Adjudication of liability to pay a penalty under the IT Act is governed by Section 46 IT Act.
When Section 44 IT Act Applies
- The person is required under the IT Act, or under rules or regulations made under the IT Act, to furnish, file, or maintain the specified material.
- Under clause (a), failure to furnish a required document, return, or report to the Controller or the Certifying Authority attracts a penalty of up to ₹15 lakh for each failure.
- Under clause (b), failure to file a return or furnish information, books, or other documents within the time specified in the regulations attracts a penalty of up to ₹50,000 for every day the failure continues.
- Under clause (c), failure to maintain required books of account or records attracts a penalty of up to ₹1 lakh for every day the failure continues.
Example of Section 44 IT Act
When Section 44 IT Act Does Not Apply
- Section 44 IT Act does not apply where no provision of the IT Act, or of the rules or regulations made under it, requires the person to furnish the document, return, report, information, or books, or to maintain the books of account or records.
- Clause (b) of Section 44 IT Act does not apply where the return, information, books, or other documents are filed or furnished within the time specified in the regulations.
FAQs on Section 44 IT Act
What is Section 44 IT Act?▼
Section 44 IT Act prescribes civil monetary penalties when a person fails to furnish required documents, returns, reports, information, or books, or fails to maintain required books of account or records under the IT Act, rules, or regulations. Depending on the clause, the maximum penalty is ₹15 lakh per failure, ₹50,000 per day, or ₹1 lakh per day.
Is a failure under Section 44 IT Act an offence?▼
No. Section 44 IT Act imposes civil monetary penalties for filing and record-keeping failures, not punishments for an offence.
What is the maximum penalty under Section 44(a) IT Act?▼
Up to ₹15 lakh for each failure. This cap applies when a person required under the IT Act, rules, or regulations to furnish a document, return, or report to the Controller or the Certifying Authority fails to furnish it.
How are daily penalties calculated under clauses (b) and (c) of Section 44 IT Act?▼
For every day during which the failure continues. Under clause (b), failing to file a return or furnish information, books, or documents within the time specified in the regulations carries a penalty of up to ₹50,000 per day. Under clause (c), failing to maintain required books of account or records carries a penalty of up to ₹1 lakh per day.
What happens if a breach of IT Act rules or regulations has no separate penalty in Section 44 IT Act?▼
Section 45 IT Act provides a residuary penalty. Where a person contravenes rules, regulations, directions, or orders made under the IT Act and no separate penalty is provided, Section 45 IT Act sets a penalty of up to ₹1 lakh plus compensation to the affected person.
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Sources: Bare Act Text, Information Technology Act, 2000 ·