Section 126. General disciplines related to penalty.-
(1) No officer under this Act shall impose any penalty
for minor breaches of tax regulations or procedural requirements and in
particular, any omission or mistake in documentation which is easily
rectifiable and made without fraudulent intent or gross negligence.
Explanation.-For the purpose of this sub-section,-
(a) a breach shall be considered a "minor
breach" if the amount of tax involved is less than five thousand rupees;
(b) an omission or mistake in documentation shall be
considered to be easily rectifiable if the same is an error apparent on the
face of record.
(2) The penalty imposed under this Act shall depend on
the facts and circumstances of each case and shall be commensurate with the
degree and severity of the breach.
(3) No penalty shall be imposed on any person without
giving him an opportunity of being heard.
(4) The officer under this Act shall while imposing
penalty in an order for a breach of any law, regulation or procedural
requirement, specify the nature of the breach and the applicable law,
regulation or procedure under which the amount of penalty for the breach has
been specified.
(5) When a person voluntarily discloses to an officer
under this Act the circumstances of a breach of the tax law, regulation or
procedural requirement prior to the discovery of the breach by the officer
under this Act, the proper officer may consider this fact as a mitigating
factor when quantifying a penalty for that person.
(6) The provisions of this section shall not apply in
such cases where the penalty specified under this Act is either a fixed sum or
expressed as a fixed percentage.
