Taxation Laws (Amendment) Act,2006
Section 18. Amendment of Section 275
In Section 275 of the Income Tax Act, after sub-section (1), the following sub-section shall be inserted, namely:-
“(1-A) In a case where the relevant assessment or other order is the subject matter of an appeal to the Commissioner (Appeals) under Section 246 or Section 246-A or an appeal to the Appellate Tribunal under Section 253 or an appeal to the High Court under Section 260-A or an appeal to the Supreme Court under Section 261 or revision under Section 263 or Section 264 and an order imposing or enhancing or reducing or canceling penalty or dropping the proceedings for the imposition of penalty is passed before the order of the Commissioner (Appeals) or the Appellate Tribunal or the High Court of the Supreme Court is received by the Chief Commissioner or the Commissioner or the order of revision under Section 263 or Section 264 is passed, an order imposing or enhancing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty may be passed on the basis of assessment as revised by giving effect to such order of the Commissioner (Appeals) or, the Appellate Tribunal or the High Court, or the Supreme Court or order of revision under Section 263 or Section 264 :
Provided that no order of imposing or enhancing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty shall be passed-
(a) unless the assessee has been heard, or had been given a reasonable opportunity of being heard;
(b) after the expiry of six months from the end of the month in which the order of the Commissioner (Appeals) or the Appellate Tribunal or the High Court or the Supreme Court is received by the Chief Commissioner or the Commissioner or the order of revision under Section 263 or Section 264 is passed:
Provided further that the provisions of sub-section (2) of Section 274 shall apply in respect of the order imposing or enhancing or reducing penalty under this sub-section.
