Union Budget 2025-26 (Full) + Finance Bill, 2025

V. Certain penalties to be imposed by the Assessing Officer

Sections 271C, 271CA, 271D, 271DA, 271DB and 271E of the Act, inter-alia, provide that penalty under these sections shall be imposed by the Joint Commissioner. Though, assessment in such cases were being made by the Assessing Officer, penalty under these sections were being imposed by the Joint Commissioner.

2. In order to rationalize the process, it is proposed to amend sections 271C, 271CA, 271D, 271DA, 271DB and 271E of the Act so that penalties under these sections shall be levied by the Assessing Officer in place of Joint Commissioner, subject to the provisions of sub-section (2) of section 274 of the Act. Thus, Assessing Officer shall take the prior approval of Joint Commissioner for the passing of penalty order, where penalty amount exceeds the limit specified in sub-section (2) of section 274 of the Act.

3. It is further proposed to make consequential amendment in clause (n) of sub-section (1) of section 246A of the Act.

4. Section 271BB of the Act provides the penalty for the failure to subscribe to the eligible issue of capital. It further provides that, any person who fails to subscribe any amount of subscription to the units issued under any scheme referred to in sub-section (1) of section 88A of the Act to the eligible issue of capital under that sub-section within the period of six months specified therein, may be directed by the Joint Commissioner to pay, by way of penalty, a sum equal to twenty per cent of such amount. However, section 88A has already been omitted vide Finance (No. 2) Act, 1996 with retrospective effect from 1st April, 1994. In the absence of the parent section, relevance of the penalty section in the case of any failure does not exist. Therefore, it is proposed to omit the section 271BB of the Act.

5. These amendments will take effect from the 1st day of April, 2025.

[Clauses 69, 76, 77, 78, 79, 80, 81 & 82]

 

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Full Text:

Union Budget 2025-26 (Full) + Finance Bill, 2025

Penalty authority of Assessing Officer expanded; prior Joint Commissioner approval required for penalties exceeding prescribed statutory limit. Penalties under specified sections will be levied by the Assessing Officer instead of the Joint Commissioner, subject to the prior approval requirement where penalties exceed the statutory threshold in sub section (2) of section 274; a consequential amendment to clause (n) of sub section (1) of section 246A is proposed. Section 271BB, a penalty tied to an omitted parent provision, is proposed to be omitted. The amendments are to take effect from the first day of April following enactment.