Re: Effect on non-appealed penalty order after opting scheme for quantum proceeding

Quantum appeal pending before ITAT filed by Assessee against adverse order passed by CIT(A). Pursuant to order of CIT(A), penalty proceeding initiated u/s 271(1)(c) and levied. Assessee paid the penalty. No appeal filed against penalty order and time limit elapsed. On opting of VSV scheme for quantum appeal, whether penalty already paid will be refunded?

If Quantum is settled under VSV, penalty is waived under VSV whether or not the appeal has been filed against the penalty order.

Ideally penalty should be refunded of quantum is settled. However since no appeal is filed, there is no way where you can mention this while filing of the declaration. In such a scenario it is advisable to file an appeal along with condonation of delay and mention at the time of filing of declaration.  In case after settling the quantum  if penalty is not refunded , one may file writ petition before the High Court.  In Marigold Engineers P. Ltd v UOI ( 2004) 141 Taxman 4/ 101 CTR 103/ 274 CTR 17 (P&H( HC ) held that  the excess amount paid under Kar Vivad  Samadhan Scheme was directed to be refunded .     The issue requires to be taken before the Board for clarification . 

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