Re: Penalty -S. 271D, 271E.

An assessee seeks to file a declaration for settlement of his dues payable out of the orders of penalties levied u/s 271D and 271E for violation of the provisions of s. 269SS and 269T. The assesssee has filed appeals against such order before the specified date.

Clause (i) of s. 2 defined the term ‘disputed penalty’ to mean a penalty determined in any case under the provisions of the Act where such penalty is not levied in respect of disputed income or tax and an appeal has been filed in respect of such penalty. The penalties in question satisfy the requirement of being classified as the disputed penalty which therefore can be classified as tax arrear and on being so defined become eligible for settlement u/s 3 of the scheme and the assessee is entitled to file a declaration u/s 4 for the disputed penalty independent of assessment. In fact the penalty associated with the assessment gets settled under the settlement of the disputed tax itself; the settlement of the disputed penalty rather mandates that such a penalty is not levied in respect of  the disputed income or the disputed tax . 

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