Time limit for passing an order for waiver of interest and penalty [Sections 220(2A),
273A, 273AA]
Effective from: 1st June, 2016
(i) No time limit has been provided within which orders under section 220 or sections 273A or 273AA have to be passed. Further, there is no requirement under these provisions that the assessee be given an opportunity of being heard in case such application is rejected by an authority.
(ii) Accordingly, the Finance Act, 2016 has amended these provisions to provide for a time limit within which the order for waiver of interest and penalty have to be passed by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner of Income-tax, as the case may be. Further, no order rejecting the application of the assessee, either in full or in part, under section 220 or 273A, 273AA shall be passed without giving the assessee an opportunity of being heard.
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Section |
Powers of Principal
Commissioner/CIT |
Time limit |
|
| (1) |
220(2A) |
To reduce or waive the amount of interest paid or payable section 220(2).
Note – Section 220(1) requires payment of amount specified in the notice of demand under section 156 within 30 days of service of notice.
In case of default, interest is leviable @1% per month or part of the month under section 220(2) for the period during which the default continues |
An order accepting or rejecting application of an assessee in full or part has to be passed within a period of 12 months from the end of the month in which such application is received by the PC or CIT
In respect of applications pending as on 1st June, 2016, the order under said sections has to be passed on or before 31st May, 2017. |
|
(2) |
273A(4A) |
To reduce or waive the amount of any penalty payable by an assesse or stay or compound any proceeding for recovery of the penalty amount in certain circumstances, on an application made by the assessee in this behalf. | |
|
(3) |
273AA |
To grant immunity from penalty, if penalty proceedings have been initiated in case of a person who has made application for settlement before the Settlement Commission and the proceedings for settlement had abated under the circumstances contained in section 245HA. |