Budget 2024-25: Rationalisation Of Provisions On Limitation Period For Imposing Penalties

The Union Finance Minister Nirmala Sitharaman presented the Union Budget in Parliament.

The finance minister has proposed the rationalisation of provisions relating to period of limitation for imposing penalties.

Section 275 of the Income Tax Act provides for the period of limitation for imposing penalties. Section 275(1) (a) provides that no order imposing penalty shall be passed after the expiry of six months from the end of the month in which the quantum order of the CIT (A) or Tribunal is received by the CIT.

Similarly, at three other places in the section, for the purposes of limitation, the date of receipt of order passed by appellate authority is given as, 'date of receipt of order in the office of Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner'.

The government has received the suggestions have been received from the field formations that the reference to the office of Principal Chief Commissioner of Income-tax, Chief Commissioner of Income-tax and Principal Commissioner of Income-tax poses ambiguity for the purposes of calculation of the number of days for imposition of penalties as a consequence of the orders referred to in the said section.

Therefore, the Finance Minister has proposed to amend section 275 of the Income Tax Act to omit the reference to the date of receipt of order by the Principal Chief Commissioner or Chief Commissioner.