Vivek Jalan
Quick Summary
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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FAQ :
A taxpayer might accept a quantum order to avoid further litigation, especially when the stakes are not very high, or when accepting the order results in a reduced loss.
The penalty can range from 50% to 200% of the tax amount involved.
Common explanations include oversight by the consultant, oversight by the tax auditor, or admitting the quantum for the sake of peace of mind.
The Assessing Officer must clearly state whether the assessee has concealed the particulars of income, furnished inaccurate particulars of income, or under-reported income due to misreporting.
The Supreme Court has held that non-issuance of a specific show cause notice is an illegal infirmity, making it very important for the Assessing Officer to clearly state the grounds for the penalty allegation.
Assessees can contest penalties by substantiating that they made full and true disclosures, explaining the circumstances of any mistake, submitting evidence, and arguing why the specific limb of the penalty section may not apply.
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