(A) [Section 273A(1)] : Power to Reduce or Waive Penalty imposed or imposable for default under section 270A or section 271(1)(c)
Principal Commissioner/Commissioner may reduce/waive penalty:
Notwithstanding anything contained in the Income-tax Act, the Principal Commissioner/ Commissioner may, in his discretion, reduce or waive the amount of penalty imposed or imposable on a person under section 270A or section 271(1)(iii) for concealment of income, etc. as per section 270A or section 271(1)(c) if certain conditions and satisfied.
Conditions to be satisfied for waiver/reduction:
Such power shall be exercised by the Principal Commissioner or Commissioner if he is satisfied that the assessee has:
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prior to the detection by the Assessing Officer, of the concealment of particulars of income or of the inaccuracy of particulars furnished in respect of such income, voluntarily and in good faith, made full and true disclosure of such particulars; and
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co-operated in any enquiry relating to the assessment of his income; and
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has either paid or made satisfactory arrangements for the payment of any tax or interest payable in consequence of an order passed under the Income-tax Act in respect of the relevant assessment year. i.e. the assessment year(s) for which application is made under section 273A.
If the assessee satisfies all the above 3 conditions, then the Principal Commissioner or Commissioner shall (i.e. he is duty bound) waive the penalty and in that case there is no discretion.
Waiver may be suo moto or otherwise:
Such power to reduce or waive the penalty can be exercised by the Commissioner on his own motion or on an application made by the assessee.
Deemed case of true disclosure [Explanation to section 273A(1)]:
For the purpose of section 273A(1), a person shall be deemed to have made full and true disclosure of his income or of the particulars relating thereto in any case where the excess of income assessed over the income returned is of such a nature as not to attract the provisions of section 270A or section 271(1)(c).
Prior approval of Principal Chief Commissioner or Chief Commissioner/Principal Director General or Director General necessary where aggregate concealed income exceeds Rs. 5,00,000 [Section 273A(2)]:
According to section 273A(2), no order under section 273A(1) for reducing or waiving the penalty shall be made by the Principal Commissioner or Commissioner except with the prior approval of the Principal Chief Commissioner or Chief Commissioner/Principal Director General or Director General, as the case may be, in a case falling under section 270A or section 271(1)(c) where the amount of income in respect of which the penalty is imposed or imposable for the relevant assessment year, or, where such disclosure relates to more than one assessment year, the aggregate amount of such income for those years, exceeds a sum of Rs. 5,00,000.
Relief available only once in life time [Section 273A(3)]:
According to section 273A(3) Where an order has been made under section 273A(1) in favour of any person, whether such order relates to one or more assessment years, he shall not be entitled to any relief under this section in relation to any other assessment year at any time after the making of such order.
(B) [Section 273A(4)] : Power to Reduce or Waive any Penalty
Principal Commissioner or Commissioner can waive any penalty including levied under section 271(1)(iii):
Without prejudice to the powers conferred on him by any other provision of this Act [including section 273(1)], the Principal Commissioner or Commissioner may, after recording his reasons for so doing, reduce or waive the amount of any penalty payable by the assessee under the Income-tax Act, or stay; or compound any proceeding for the recovery of any such amount provided certain conditions are satisfied.
Waiver only when application is made by the assessee:
The waiver or reduction of penalty under section 273A(4) is possible only when an application for the same is made by the assessee. It cannot be done suo moto by the Principal Commissioner or Commissioner.
Conditions to be satisfied for waiver or reduction:
Such power shall be exercised by the Principal Commissioner or Commissioner if he is satisfied that:
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to do otherwise would cause genuine hardship to the assessee, having regard to the circumstances of the case; and
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the assessee has co-operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him.
Prior approval of Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General necessary where penalty or aggregate amount of such penalties exceeds Rs.1,00,000:
No order reducing or waiving the amount or compounding any proceeding for its recovery under this sub-section shall be made by the Principal Commissioner or Commissioner except with the previous approval of the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General, as the case may be, where the amount of any penalty payable under the Income-tax Act or, where such application relates to more than one penalty, the aggregate amount of such penalties exceeds Rs.1,00,000.
It has been clarified that the genuine hardship referred to in the provisions of section 273A(4) should exist at the time at which the application under section 273A(4) is made by the assessee before the commissioner and should so exist even at the time of passing of order under section 273A(4) by the Commissioner.
Time limit for passing an order under section 273A(4) for accepting or rejecting the application for reduction or waiver of penalty [Section 273A(4A)]
The order under section 273A(4), either accepting or rejecting the application in full or in part, shall be passed within a period of 12 months from the end of the month in which the application under section 273A(4) is received by the Principal Commissioner or the Commissioner.
However, no order rejecting the application, either in full or in part, shall be passed unless the assessee has been given an opportunity of being heard.
Further, where any application is pending as on 1.6.2016, the order shall be passed on or before 31.5.2017. |
