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CS Executive · Tax Laws and Practice · Procedural Compliance under Income Tax

Under section 469 of the Income-tax Act, 2025, a Commissioner considers waiving the penalty under section 439 on an application showing genuine hardship, and the amount of penalty to be waived in aggregate is Rs. 1,20,000. Which statement is correct?

Prior approval from the higher authority, such as the Chief Commissioner or Director General, is needed because the aggregate penalty waived under the hardship provision exceeds Rs. 1,00,000. The Rs. 5,00,000 limit relates to the voluntary disclosure waiver, not hardship waivers.

  1. ANo approval is needed because the amount is below Rs. 5,00,000
  2. BPrior approval of the Principal Chief Commissioner, Chief Commissioner, Principal Director General or Director General is needed because it exceeds Rs. 1,00,000Correct
  3. CApproval is needed only if the amount exceeds Rs. 5,00,000
  4. DThe Commissioner cannot waive any penalty on grounds of hardship

Explanation

Section 469(5) allows reduction or waiver for genuine hardship with cooperation. Under 469(6) prior approval is required if the aggregate exceeds Rs. 1,00,000. Rs. 1,20,000 exceeds it. The Rs. 5,00,000 threshold applies to the disclosure-based waiver under sub-section (3), not hardship cases.

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