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CMA Final · Direct Tax Laws and International Taxation · Different Aspects of Tax Planning

Meridian Bank filed a statement under section 508 and on 5 June discovered that it contained an inaccuracy. Meridian Bank also had earlier received a defect intimation on a different matter. Which statement is correct about its duty regarding the newly found inaccuracy?

Meridian Bank must inform the authority and furnish the correct information within ten days of becoming aware of the inaccuracy. Section 508(8) sets this duty. The thirty-day period applies only to rectifying a defect after the authority's intimation, and no materiality threshold exists.

  1. AIt must inform the authority of the inaccuracy and furnish correct information within ten daysCorrect
  2. BIt must do so within thirty days, as for defect rectification
  3. CIt may wait for the authority to issue a notice before correcting
  4. DIt need act only if the inaccuracy exceeds a prescribed percentage of the transaction value

Explanation

Section 508(8) requires a person who becomes aware of an inaccuracy in a filed statement to inform the authority and furnish correct information within ten days. The thirty days applies to rectifying a defect after intimation under sub-section (5), which is a different situation. Nothing in the text creates a materiality threshold.

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