Assessment U/S 147 and unexplained income

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CA Sree (Querist)
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07 March 2024 If there is a penalty u/s 271AAC(1) then can we request AO to kept in abeyance the penalty till disposal of appeal ?

Aashok Kumar Sharma online

Aashok Kumar Sharma

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06 July 2024 Under Section 271AAC(1) of the Income Tax Act, 1961, if an assessee has undisclosed income referred to in section 115BBE, a penalty is levied at a rate of 10% of the tax payable on such income, in addition to tax payable under section 115BBE.

Regarding your query about requesting the Assessing Officer (AO) to keep the penalty in abeyance till the disposal of the appeal, typically, the AO has the discretion to stay or keep in abeyance the penalty proceedings until the appeal is disposed of. However, this is subject to the provisions of the law and the rules prescribed.

Here are the general steps you can consider:

1. **File an Appeal**: If you receive a penalty under section 271AAC(1), you can file an appeal against the penalty order with the Commissioner (Appeals) [CIT(A)].

2. **Request Stay of Penalty**: Along with your appeal, you can request the CIT(A) to stay the penalty proceedings pending the disposal of the appeal. This is typically done by filing a stay application where you provide reasons and grounds why the penalty should be stayed.

3. **Compliance and Documentation**: Ensure all necessary compliance with the appeal process, including submission of required documents and arguments supporting your case.

4. **Legal Advice**: It's advisable to seek guidance from a tax professional or legal advisor who can provide specific advice tailored to your case and jurisdiction.

The decision to grant a stay on the penalty lies with the CIT(A) based on the merits of your case and the applicable laws. They may impose certain conditions for granting the stay, such as depositing a portion of the penalty amount or providing a bank guarantee.

Always ensure timely compliance with legal procedures and seek professional advice for specific cases to navigate through penalty proceedings effectively.

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