Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024

A non-resident having a liaison office in India, is required to prepare and deliver a statement in respect of its activities in a financial year to the Assessing Officer within sixty days from the end of such financial year under section 285 of the Act. It is proposed that the period within which such statement is to be filed, be henceforth prescribed under the Rules.

2. Further, in order to ensure better compliance in this respect, it is proposed that failure to furnish statement may attract a penalty of one thousand rupees for every day for which the failure continues, if the period of failure does not exceed three months; and one lakh rupees in any other case. A new section 271GC is proposed to be inserted in this regard.

3. However, this penalty shall not be leviable if the assessee proves that there was reasonable cause for the said failure. It is proposed to amend section 273B to provide for this.

4. These amendments will take effect from the 1st day of April, 2025.

[Clauses 80,82 & 86]

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Full Text:

Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024

Furnishing obligation for liaison offices: late filing draws daily penalty with a capped alternative and reasonable cause defence. Non-resident liaison offices must furnish an annual statement of activities within a period to be prescribed by Rules. Failure to furnish will attract a penalty of one thousand rupees per day where the default does not exceed three months, and one lakh rupees otherwise, subject to relief if the assessee proves reasonable cause; the amendment is prospective and adjusts penalty provisions in the compliance framework.