DRC Power to reduce or waive penalty or immunity from prosecution or both [ Section 245MA(2) ] - Income Tax - Ready Reckoner - Income Tax

DRC Power to reduce or waive penalty or immunity from prosecution or both [ Section 245MA(2) and read with Rule 44DAC of Income Tax, 1962 ] Powers of DRC Section 245MA(2) The Dispute Resolution Committee, subject to such conditions, as may be prescribed, shall have the following powers in case of a person whose dispute is resolved under this Chapter. to reduce or waive any penalty imposable under this Act or grant immunity from prosecution for any offence punishable under this Act in case of a person whose dispute is resolved under this Chapter. Accordingly, Rule 44DAC prescribes the following (i) Conditions for grant of waiver of penalty or immunity from prosecution The DRC, upon receipt of confirmation from the assessee of payment of demand, should grant to the person who made the application for dispute resolution, waiver of penalty imposable or immunity from prosecution or both, in respect of the order which is the subject matter of resolution, if it satisfied that such person has, Paid the tax due on the returned income in full if available; and Co-operated with the DRC in the proceedings before it. (ii) Reasons to be recorded in writing The DRC would grant such waiver of penalty or immunity from prosecution or both, subject to such conditions as it may think fit to impose for the reasons to be recorded in writing. (iii) No immunity if prosecution proceedings were initiated before application No immunity would, however, be granted by the DRC in a case where the proceedings for the prosecution for an offence have been initiated before the receipt of the application of dispute resolution from the assessee fulfilling the specified conditions. - Specified condition explained in the the explanation (a) to section 245MA. (iv) Withdrawal of immunity An immunity granted to a a person would stand withdrawn, if such person fails to comply with any of the conditions subject to which immunity was granted. On such withdrawal, the provisions of the IT Act, 1961 would apply as if such immunity or waiver had never been granted.