Section 45 IT Act: Residuary penalty

Section 45 IT Act provides a residuary penalty, meaning a fallback civil penalty where no separate penalty is fixed elsewhere for a breach. It applies to any person who contravenes (breaches) any rules, regulations, directions, or orders made under the IT Act when no separate penalty is provided for that contravention. Like Section 44 IT Act, Section 45 IT Act creates a civil penalty and compensation liability, not a punishment for an offence.

A person covered by Section 45 IT Act is liable for two monetary amounts. First, that person is liable to pay a civil penalty of up to ₹1 lakh. Second, in addition to the penalty, that person is liable to pay compensation to the person affected by the contravention.

The maximum compensation payable to the affected person depends on who committed the contravention. Under clause (a) of Section 45 IT Act, an intermediary (a term defined in Section 2 IT Act), a company, or a body corporate is liable to pay compensation of up to ₹10 lakh. Under clause (b) of Section 45 IT Act, any other person is liable to pay compensation of up to ₹1 lakh. Under Section 46 IT Act, an adjudicating officer inquires into contraventions carrying penalty or compensation liability, and Section 47 IT Act lists factors for fixing compensation under Chapter IX.