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

An assessee applies under section 469(5) for waiver of penalties on grounds of genuine hardship. The Commissioner proposes to waive aggregate penalties of Rs. 1,40,000 and the application was received on 12 August 2027. Which statement is correct?

Prior approval is needed because the waiver of Rs. 1,40,000 exceeds the Rs. 1,00,000 limit in section 469(6). The order must be passed within twelve months from the end of the month of receipt, which here is the end of August 2028.

  1. APrior approval of the higher authority is required, and the order must be passed within twelve months from the end of August 2028Correct
  2. BNo prior approval is needed as the amount is below Rs. 5,00,000
  3. CPrior approval is required only if the waiver exceeds Rs. 10,00,000
  4. DPrior approval is required, and the order must be passed by 12 August 2028

Explanation

Section 469(6) requires prior approval when the aggregate amount reduced or waived exceeds Rs. 100000; Rs. 1,40,000 exceeds it. Section 469(7) requires the order within twelve months from the end of the month of receipt, i.e. the end of August 2028, not 12 August 2028. The Rs. 5,00,000 limit belongs to sub-section (3).

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