One of my friend filed the return for  the income tax and got the refund . The case got selected got scrutiny and they have disallowed the amount which is almost 6.5 lacs.they have stated that under reporting due to misreporting of an income which is 200%. I have paid the tax and interest agreeing to them as I am not aware of it. After that they have initatiated penalty of 200% which is almost 4.08 lacs.

whether there is any chance of prosecution. Most of the things are misreported. I am salary assessed . Some CA,s are telling that pay the penalty in installment and sleep peacefully. Some of the other people are telling that if you are paying penalty it’s like u are agreeing to them and they can initiate the prosecution. I am salaried assessed and due to my friends mistake I am facing this issue.

can you please let me know it is advisable to go for an appeal. If I go for an appeal or shall I pay the penalty in instalment.

i am sole earner in my family with single mother