TaxTMI 
TaxTMI 
My dear, respected colleague, could you elaborate on the penalty stated in section 73(8) and whether it is mandatory in nature? For example, if the demand in the notice is only for 400 rupees, and the assessee deposits the demand after the Notice's specified period, will they actually be responsible for paying the penalty of 20000.00?
penalty u/s 73(8)
13 Dec 2023 
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Penalty under section 73 contested; timely payment after notice may avoid penalty, while mandatory imposition remains disputed.
Sub section 73(8) exempts penalty where the person pays tax and interest within thirty days of a show cause notice, concluding proceedings. Sub sections 73(9) and 73(11) employ mandatory language directing the proper officer to determine tax, interest and a penalty framed as an alternative between a fixed sum and a percentage, and commentators debate whether a provision limiting penalties for minor breaches and excluding fixed sums or percentages permits arguing that the 73(9) penalty is not strictly mandatory; litigatory challenge and appeals are urged to preserve that contention. (AI Summary)
Sub section 73(8) exempts penalty where the person pays tax and interest within thirty days of a show cause notice, concluding proceedings. Sub sections 73(9) and 73(11) employ mandatory language directing the proper officer to determine tax, interest and a penalty framed as an alternative between a fixed sum and a percentage, and commentators debate whether a provision limiting penalties for minor breaches and excluding fixed sums or percentages permits arguing that the 73(9) penalty is not strictly mandatory; litigatory challenge and appeals are urged to preserve that contention. (AI Summary)