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of <h1>Clause 470 and Section 273B provide statutory relief from tax penalties when taxpayers prove reasonable cause for non-compliance</h1> The Income Tax Bill 2025's Clause 470 and the Income-tax Act 1961's Section 273B both provide statutory relief from penalties when taxpayers demonstrate 'reasonable cause' for non-compliance. Both provisions operate as non obstante clauses, overriding specified penalty sections where genuine, non-culpable defaults occur. The taxpayer bears the burden of proving reasonable cause, which courts interpret as circumstances preventing ordinary prudent persons from complying. Clause 470 applies to new penalty sections under the proposed Bill, while Section 273B covers existing provisions. Both aim to prevent mechanical penalty imposition and encourage voluntary compliance, ensuring fairness in tax administration by distinguishing between deliberate violations and bona fide errors.
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