The Karnataka State Chartered Accountants Association (KSCAA) in a letter to the Union Finance Minister, Nirmala Sitharaman while urging her for the Rationalisation of Penalty Provisions under Section 270AA of Income Tax Act.
Since this is the first year of implementation of sections 270A and 270AA, there are instances of the timelines not being followed by the Assessing Officers as well as Assessees.
“Section 270AA of the Act being a beneficial provision, as it seeks to provide immunity from penalty and prosecution and to espouse its true purpose we may hereby urge that the time limits required for payment of demand as specified in the demand notice and filing of Form No.68 can be little relaxed. The intent or purpose of this provision will still be met even in cases where there is only a minor delay in the payment of taxes or filing of Form No. 68 and so long as an appeal is not filed against the order. Nevertheless, even though there is a delay, it is still pertinent to note that such taxes are paid along with additional interest. Therefore, there is no loss of revenue to the Government if belated immunity applications are accepted,” the KSCAA in the letter suggested.
The CA body added that Vivad-Se-Vishwas Scheme (VSVS) seeks to attain the same objective of the early settlement of cases/collection of taxes, grant of immunity from penalty, and prosecution. In view of the Covid pandemic situation, the due dates for payment of taxes as determined by way of the issue of Form No. 3 have now been extended by the Government to 31.08.2021 ( to 31.10.2021 with additional sum) from the original due date of 31.03.2021 for that scheme. Alas, no similar corresponding reliefs have been forthcoming in respect of provisions of section 270A read with section 270AA of the Act, although these provisions operate on the same canvas as that of VSVS.
“It may therefore lead to giving an indiscriminate and unfair treatment by tarring the same brush to both groups of taxpayers as covered by section 270A and 270AA vis-a-vis group of taxpayers as covered by VSVS. The brunt of Covid-19 has been suffered by every citizen of this country, there is no one who has escaped unscathed from its fury and it is, therefore, we be siege to your good selves to please take cognizance of Covid-19 situation and provide leniency by conceding minor slippages if there are any on the part of taxpayers in meeting the compliance timelines for payment tax/interest and filing of Form No. 68,” the CA body said.
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