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CMA Intermediate · Direct and Indirect Taxation · Returns and Payment of Taxes

An assessment order under section 62(1) is served on a registered person on 1 March. He furnishes a valid return within sixty days of service. What is the effect under section 62(2)?

The assessment order is deemed withdrawn, but the person still has to pay interest under section 50(1) and late fee under section 47. Filing a valid return within sixty days of service of the order removes the assessment but not these liabilities.

  1. AThe order is deemed withdrawn, but interest under section 50(1) and late fee under section 47 continue to be payableCorrect
  2. BThe order is deemed withdrawn and interest and late fee are also waived
  3. CThe order stays in force and the return is ignored
  4. DThe order is withdrawn only if an additional late fee of Rs 100 per day is paid

Explanation

Section 62(2) deems the assessment order withdrawn if a valid return is furnished within sixty days of service, but liability for interest under section 50(1) and late fee under section 47 continues. The Rs 100 per day additional fee applies only when the return is filed in the further sixty-day period.

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