Power to Reduce or Waive Penalty
For Penalty under Section 270A
Reduction or waiver of penalty under Section 270A may be granted by the Principal Commissioner or Commissioner, subject to the following:
- Voluntary Disclosure:The assessee must have made true and full disclosure of under-reported income voluntarily and in good faith before its detection by the Assessing Officer.
- Co-operation:The assessee must have cooperated during assessment or other proceedings.
- Tax Payment:Tax and interest arising from the relevant order must have been paid or a satisfactory arrangement made.
- Approval from the higher authorities:Where the income on which the penalty is imposed exceeds Rs. 5 lakh, prior approval of the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General is required.
- Once in a lifetime:The benefit of waiver or reduction is allowed only once in the lifetime of the assessee.
For Other Penalties
The Principal Commissioner or Commissioner may also reduce or waive any other penalty or stay/compound related recovery proceedings, subject to:
- Written Reasons:The relief must be supported by reasons recorded in writing.
- Genuine Hardship:Relief must be necessary to avoid genuine hardship to the assessee.
- Co-operation in Proceedings:The assessee must have co-operated in assessment or recovery proceedings.
- Approval Threshold:Where the penalty or aggregate penalty exceeds Rs. 1 lakh, prior approval of the Principal Chief Commissioner, Chief Commissioner, Principal Director General or Director General is required.
- Order Timeline:The order must be passed within 12 months from the end of the month in which the application is received. The assessee must be heard before any rejection.
- Finality of Order:Orders accepting or rejecting an application shall be final and not subject to challenge.
- Once in a lifetime:This relief is also allowed only once in a lifetime.