Template Description

This template is a formal request letter designed for taxpayers or their authorized representatives to seek a suspension of penalty proceedings initiated under the Income Tax Act, 1961. It is 2-page Ms Word document. The letter is mandatory to direct the Officer In-charge at the National Faceless Assessment Centre. Intended user include Taxpayers, Chartered Accountants, Tax Professionals, Legal Representatives, Corporate Tax Departments and Accounting Firms.

Understanding Abeyance Letter - Penalty proceedings under Section 271(1)(c) of I.T. Act

Purpose:

The purpose of this letter is to formally request that penalty proceedings be put on hold until the resolution of an appeal currently under consideration by the CIT(A). This request is made in response to a notice issued under Section 274 read with Section 271(1)(c), which deals with penalties for concealment of income or furnishing inaccurate particulars.

Key Components:

Date and Recipient Information:

The letter should be dated and addressed to the Officer In-charge at the National Faceless Assessment Centre in Delhi. It includes the assessee’s PAN and the specific subject of the penalty proceedings.

Reference to Notice:

Reference is made to the notice issued under Section 274 read with Section 271(1)(c) of the Income Tax Act, providing the date of the notice.

Appeal Status:

The letter should indicate that an appeal against the assessment order has been filed with the CIT(A) and is currently pending.

Enclosures:

Proof of the appeal filed with the CIT(A) should be enclosed with the letter. This proof acts as evidence supporting the request for a stay of penalty proceedings.

Closing and Sign-off:

The letter should be signed by an authorized representative of the firm or the taxpayer, with their designation clearly stated.

Supporting Documents for Penalty Abeyance Request

Proof of Appeal Filing:

This should include the appeal form (e.g., Form 35) and the acknowledgment receipt from the CIT(A) indicating that the appeal has been filed and is under process.

Copy of Assessment Order:

This document provides context to the penalty proceedings and the reasons for the appeal.

Notice of Penalty Proceedings:

This notice is crucial as it outlines the specifics of the penalty proceedings and the charges against the assessee.

Proof of Payment of Fees:

Demonstrates that the appeal has been formally processed and that any necessary fees have been paid.

Additional Correspondence:

This can include letters acknowledging receipt of the appeal or correspondence explaining the status of the appeal.

Authorization Letter:

This letter should grant the representative the authority to act on behalf of the assessee in tax matters.

Conclusion

This template serves as a formal means to request the suspension of penalty proceedings when an appeal is pending before the CIT(A). It provides a clear structure for communicating with the National Faceless Assessment Centre, ensuring compliance with procedural requirements and aiding in the management of tax-related disputes. By using this template, taxpayers and their representatives can effectively handle situations where penalty proceedings might otherwise continue despite an ongoing appeal.