CMA Intermediate · Direct and Indirect Taxation · PAN
Under the Income-tax Act, 2025, any sum imposed by way of penalty, fine or interest under the Act is recoverable in which manner?
Penalties, fines and interest under the Income-tax Act, 2025 are recoverable in the same manner as arrears of tax, using the recovery machinery in the recovery Part of the Act. They are not left to civil suits or voluntary payment.
- AOnly by a civil suit filed by the Department
- BIn the manner provided in the recovery Part of the Act for arrears of taxCorrect
- COnly by adjusting it against future refunds, never by any other method
- DIt is not recoverable until the assessee voluntarily pays it
Explanation
Section 419 states that any sum imposed by way of interest, fine, penalty or any other sum payable under the Act is recoverable in the manner provided in the recovery Part for arrears of tax. A civil suit or refund-only adjustment is not the prescribed mode.
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