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

Under section 469(5) of the Income-tax Act, 2025, the Commissioner may reduce or waive penalty on an assessee's application on hardship grounds. Which statement is correct?

Prior approval of the higher authority is needed when the aggregate penalty reduced, waived or compounded under the hardship provision exceeds Rs. 1,00,000. The time limit runs from the end of the month of receipt, rejection requires a hearing, and orders are final.

  1. APrior approval of the higher authority is needed if the aggregate penalties reduced or waived exceed Rs. 1,00,000Correct
  2. BThe application must be decided within twelve months from the end of the financial year of receipt
  3. CRejection of the application may be made without hearing the assessee
  4. DThe Commissioner's order can be challenged in any court as a matter of right

Explanation

Section 469(6) requires prior approval where the aggregate amount reduced, waived or compounded under sub-section (5) exceeds Rs. 1,00,000. The order must be passed within twelve months from the end of the month of receipt, not the financial year. Rejection needs a hearing, and orders are final under sub-section (9).

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