Taxpayers' right to contest penalty not affected: FinMin
The Finance Ministry said the proposed amendment in the Finance Bill, 2008, with retrospective effect, to empower the assessing officer for levying penalty for concealment of income will not affect the taxpayers' right to contest the decision.
"This retrospective effect will not prejudice taxpayers' right to agitate the levy of penalty on merits," Central Board of Direct Taxes (CBDT) said in a statement on Thursday.
No separate satisfaction is required to be recorded before initiating penalty proceedings, CBDT said.
At present, there are ongoing disputes between the I-T Department and taxpayers on whether the assessing officer is required to record his satisfaction separately before initiating penalty proceeding, it added.
It claimed that there would be "neither violation of the principle of natural justice nor any prejudice caused to the taxpayer" as a result of the retrospective amendment.
The proposed amendment has been given retrospective effect in order to protect the revenues contention on this issue in pending cases, it maintained.
Referring to conflicting decisions of the courts on the issue, it said the proposed amendment to Section 271 of the Income Tax Act has been necessitated mainly to safeguard the interests of the I-T Department.