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Surekha

IT professional

61 Points Joined August 2012

I am a salaried employee and there was a cash credits in my account in April-2009 and hence my case was selected for scrutiny for AY 2010-11.
Although I have furnished the sources of cash credits in my bank account, it was not satifactorily accepted by AO and hence AO passed the order of tax amounting approx Rs. X,00,000/-
This amount includes interest as well calculated u/s 234B

Now, my case is in appeal and I have paid 50% of the amount of tax demand and obtained stay for remaining 50% amount. The stay obtained is till Mar-2015. Appeals proceedings are initiated. I am waiting for final hearing now.
I have following questions:

1. If CIT Appeals do not give result from my side, then I have to pay remaining 50% of the tax amount. Will I have to pay interest on this amount?
As order of demand have included interest already and contains final amount. Also, in the stay letter it is not mentioned anything about interest.

2. Also, there will be penalty ITO will be charging to me. To whom I can apply for penalty wave off? Joint commissioner or in CIT Appeals?

3. If my hearing does not come before till Mar-2015 and my stay is also not extended beyond that, then AO will demand for the remaining 50% of the tax. So will AO will initiate penalty proceedings as well?

Replies (3)

Mihir

Wealth Manager

5293 Points Joined December 2008

My suggestion would be to show willingness to pay the tax liability on the cash credit, and plead not guilty of willful concealment of income, that way the AO will hopefully not impose section 271.

Gagan Deep Singh

CHARTERED ACCOUNTANT

1190 Points Joined October 2012

u/s 273A(1) penalty may be waived by may be Commissioner in the following cases:

1. the assessee has cooperated in an enquiry related to his assessment

2. assessee has either paid or made satisfactory arrangements for the payment of tax & intt.

3. assessee has voluntary disclose his income before detected by AO.

Under this section comm. can waived upto 5 lacs beyond that he needs to take permission of Chief Comm.

u/s 273A(4) also comm. may waive penalty on an application made by assesse if he is satisfied that:

1. penalty will cause financial hardship to the assesse

2. assessee has cooperated in an enquiry

Under this section comm. can waive upto 1 lac beyond that he needs to take prior permission of chief Comm.

If you satisfy any one of these points commissioner may waive penalty.

Z

Tax Consultation (US and India)

2970 Points Joined September 2011

"1. If CIT Appeals do not give result from my side, then I have to pay remaining 50% of the tax amount. Will I have to pay interest on this amount? As order of demand have included interest already and contains final amount. Also, in the stay letter it is not mentioned anything about interest."

You may go to ITAT challenging the judgement of CIT(A), ITAT also has the power to grant stay.

Yes interest will have to be paid. Suppose the person making an appeal looses the case then this order is communicated to assessee aswell as to the commissioner. Then if that person does not makes further appeal,defacto time period is 60 days, another letter will be issued to assessee in that letter they will demand interest and it will be something like interest is to be paid @ % till all dues are paid

"2. Also, there will be penalty ITO will be charging to me. To whom I can apply for penalty wave off? Joint commissioner or in CIT Appeals?"

271(1)(c) can also be levied for concealment of income,I think its prior to order of appelant authority(not sure though,not having access to my resources) .But if you will be taking stay application from ITAT for appeal to ITAT then you don't need to worry,other members have told you about the alternative course of actions

" 3. If my hearing does not come before till Mar-2015 and my stay is also not extended beyond that, then AO will demand for the remaining 50% of the tax. So will AO will initiate penalty proceedings as well?"

There are 2 things which can be done on expiry of stay, one is extension and other is FRESH grant. There are few cases on this, but lets not go into that unless required

I don't have access to my resources right now but I think penalty order should be passed prior to order of court.