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April 2008

Clarification issued by the Finance Ministry on retrospective amendment to S. 271(1)(c) : Press Release BSC/SS/GN-67/08 dated 14-3-2008.

By Pinky Shah, Sonalee Godbole, Gaurang Gandhi
Chartered Accountants
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3 Clarification issued by the Finance
Ministry on retrospective amendment to S. 271(1)(c) : Press Release BSC/SS/GN-67/08
dated 14-3-2008.


It has been clarified that the amendment has been made only
to settle the contrary views expressed by different Courts. However,
retrospective amendment will not prejudice taxpayers’ right to agitate the levy
of penalty on merits. Further, while no separate satisfaction is required to be
recorded before initiating penalty proceedings, it is still incumbent upon the
Assessing Officer to record his satisfaction before levying the penalty.
Accordingly, there is neither violation of the principle of natural justice, nor
any prejudice caused to the taxpayer as a result of the retrospective amendment.

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