Accepted Quantum Order but Faced Penalty? Legal Remedies Under Section 271(1)(c) & 270A

Vivek Jalan | Last updated: 18 December 2025

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When taxpayers accept quantum orders, especially to avoid further litigation or when losses are reduced, they can face significant penalties. These penalties, ranging from 50% to 200% of the tax amount, can arise from perceived oversights by consultants or auditors, or even an admission for peace of mind. However, the Income Tax Act, through Sections 271(1)(c) and 270A, provides legal avenues to contest these penalties. It's crucial for the Assessing Officer to clearly specify the grounds for penalty, such as concealment or furnishing of inaccurate particulars of income, or under-reporting due to misreporting. Recent judicial pronouncements emphasise the need for specific show cause notices and allow assessees to contest penalties by demonstrating full and true disclosures and providing evidence for any mistakes.

Sometimes, when the stakes are not huge, assessees may not contest quantum orders to prevent further litigation. Sometimes, when there is a loss and the assessment reduces the loss, the assesses accept the quantum orders. What follows is a penalty order of 50% to 200% of the tax amount involved! The

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About the Author

Vivek Jalan

DESIGNATED PARTNER

Mr. Vivek Jalan is a FCA, Qualified LL.M (Constitutional Law) and LL.B. He is the Chairman of The Fiscal Affairs and Taxation Committee of The Bengal Chamber of Commerce and Industry. He is the Convenor on Indirect Taxes of the CII- Economic Affairs and Taxation Committee (ER); He is also a visiting faculty for Indirec ... Read more

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