Section 273B → Section 365
Penalty not to be imposed in certain cases (Reasonable Cause)
Quick Answer
Section 273B of the Income Tax Act, 1961 (Penalty not to be imposed in certain cases (Reasonable Cause)) corresponds to Section 365 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 273B
Under the Income Tax Act, 1961, Section 273B governs penalty not to be imposed in certain cases (reasonable cause). Lists sections where penalty shall NOT be imposed if the taxpayer proves 'Reasonable Cause' for the failure.
The new code maps this to Section 365: the provision is retained and renumbered as Section 365 of the Income-tax Act, 2025, applying from 1st April 2026. Retained. The most powerful defensive section for any tax lawyer contesting a penalty.
On the ground, changes to Section 273B carry a Very High impact. The primary safety valve for honest taxpayers.
Sec 273B
Provision Summary
Lists sections where penalty shall NOT be imposed if the taxpayer proves 'Reasonable Cause' for the failure.
Sec 365
Provision Summary
Retained. The most powerful defensive section for any tax lawyer contesting a penalty.
Key Changes & Highlights
- Expanded to include new digital compliance failures where server downtime is proved.
Related Sections
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Frequently Asked Questions
What does Section 273B of the Income Tax Act 1961 deal with?
Section 273B of the Income Tax Act, 1961 covers penalty not to be imposed in certain cases (reasonable cause). Lists sections where penalty shall NOT be imposed if the taxpayer proves 'Reasonable Cause' for the failure.
Where does Section 273B of the ITA 1961 go under the Income-tax Act, 2025?
Section 273B of the Income Tax Act, 1961 maps to Section 365 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. The most powerful defensive section for any tax lawyer contesting a penalty.
Why does the change to Section 273B matter for taxpayers?
The transition impact for Section 273B is rated Very High. The primary safety valve for honest taxpayers.
What are the key changes to Section 273B under the Income-tax Act, 2025?
Expanded to include new digital compliance failures where server downtime is proved. These points are specific to Section 273B (Penalty not to be imposed in certain cases (Reasonable Cause)).
Disclaimer: This mapping of Section 273B (Penalty not to be imposed in certain cases (Reasonable Cause)) to Section 365 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 273B is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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