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CMA Final · Direct Tax Laws and International Taxation · Penalties and Prosecutions

A Commissioner proposes to reduce or waive penalties on an assessee's hardship application. The aggregate penalties proposed to be waived are Rs. 1,20,000. Which statement is correct?

Prior approval from the higher authority, such as the Principal Chief Commissioner or Chief Commissioner, is required. Under the hardship provision, approval is needed when aggregate penalties reduced, waived or compounded exceed Rs. 1,00,000, and Rs. 1,20,000 exceeds that limit.

  1. ANo approval is needed because the amount is below Rs. 5,00,000
  2. BPrior approval of the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General is requiredCorrect
  3. CApproval is needed only if the waiver exceeds Rs. 10,00,000
  4. DOnly the assessee's consent is required

Explanation

Section 469(6) requires prior approval if the aggregate penalties reduced, waived or compounded under the hardship provision exceed Rs. 1,00,000. Rs. 1,20,000 exceeds that limit. The Rs. 5,00,000 limit applies to waivers under sub-section (1) for voluntary disclosure.

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