Penalties based on cancelled/annulled assessments - Authorisation by the Board for taking action in respect of such penalties under section 154 beyond the time limit specified under section 154(7) - Order under section 119(2)(a)/(b)

Tax Authorities Can Cancel Penalties from Annulled Assessments Beyond Time Limits u/s 154, Per New Circular.

The circular addresses the issue of penalties based on income-tax assessments that have been cancelled or annulled. It authorizes tax authorities to cancel such penalties under section 154, even beyond the time limit specified in section 154(7), to prevent hardship. This authorization is granted by the Board under section 119(2)(a)/(b). However, this order does not apply to penalties confirmed by higher courts, penalties from assessments set aside for re-evaluation, or penalties from assessments with pending appeals. The circular supersedes previous orders and directs relevant tax authorities to take appropriate action.