741/CBDT. - Income Tax - 741/CBDT

INSTRUCTION NO. 741/CBDT Dated : August 22, 1974 Section(s) Referred: 61 Statute: Estate Duty Act Section 60 of the Estate Duty Act, 1953 provides that in case of default u/s 60(1)(a) or 60(1)(d), penalty not exceeding provides the amount of E.D. can be imposed. The section further provides that penalty not exceeding twice the amount of the estate duty, if any, which would have been avoided, if the principal value drawing the account of such person had been accepted as correct can be imposed in case a default is committed u/s 60(1)(b) or 60(1)(d) of the Estate Duty Act, 1953. The Board have come across a few cases where the penalties imposed u/s 60(1)(a) of the Estate Duty Act were within the admissible limits laid down in that section at the time the penalty orders were passed, but subsequently in appeals against the assessment orders the duty was substantially reduced. The question that arises whether in such cases the penalty order can be rectified u/s 61 of the Estate Duty Act, 1953, if no appeal was filed by accountable person against the penalty order. The Board are advised that in cases where the penalty was originally imposed as a proportionate percentage of duty subsequently the duty payable has been reduced appeal, the penalty can be reduced u/s 61 of the Estate Duty Act correspondingly. In other cases, rectification can be made order u/s 61 of the Act, so as to bring down the penalty only up to the amount of maximum penalty which could be imposed on the basis of the reduced duty and not below that amount. It has, however, to be remembered that the rectification u/s 61 can be made only within the time-limit laid down in the section. These instructions may be brought to the notice of all the officers working in your charge.