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Weekend MCQ Self Challenge #018 – Special Focus on Adjudication Proceedings & Penalty under GST

Special Focus on Adjudication Proceedings & Penalty under GST

 

Dear Professional Seniors & Friends,
Welcome to this wonderful weekend MCQ self challenge!

This weekend challenge is on Special Focus on Special Focus on Adjudication Proceedings & Penalty under GST having 5 MCQs to be self answered by participants to take self challenge. The detailed answer of these MCQs shall be posted on Monday for the self assessment of the participants. This post shall be of immense use of the participant.

MCQ 18.1: Mr X has not paid taxes of F.Y. 2017-18 due to reason other than fraud. Till what time a demand order can be made by assessing officer?

A. Till 3 years from the date of filing annual return.
B. Till 3 years from the due date of filing annual return.
C. Till 5 years from the date of filing annual return.
D. Till 5 years from the due date of filing annual return.

MCQ 18.2: Which among the following is correct in the cases other than due to fraud?

A. Penalty is not required to be paid at any stage.
B. Penalty is required to be paid after issue of SCN.
C. Penalty is required to be paid only after demand order & Maximum penalty is 10% of Tax or Rs 10000.
D. Penalty is required to be paid at the first stage that is along with tax.

MCQ 18.3: Which among the following is correct in the cases due to fraud?

A. Penalty is not required to be paid at any stage.
B. Penalty is required to be paid after issue of SCN.
C. Penalty is required to be paid only after demand order & Maximum penalty is 10% of Tax.
D. Penalty is required to be paid at the first stage that is along with tax.

MCQ 18.4: Mr.X has been served demand order after 5 years from the due date of filing annual return. He has filed an appeal in response to the same and M.X has been found to be honest person.

A. Proceeding can be conducted treating him as honest person.
B. Proceeding cannot be initiated since order is issued after 3 years.
C. Proceeding cannot be initiated since order is issued before 5 years notwithstanding that after filing appeal he has found to be honest person.
D. None of the above.

MCQ 18.5: Appellate tribunal stays the service of notice or issuance of order for F.Y. 2017-18 by 2 years. Upto when can a demand order be raised by assessing officer if the reason of demand is due to fraud?

A. 3 years from the due date of filing annual return.
B. 5 years from the due date of filing annual return.
C. 7 years from the due date of filing annual return.
D. None of the above.

Sincere Regards

CA Sanjay Kumar Agrawal
Mobile: 9810116321

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Answer MCQ Self Challenge #018 Weekend Dhamaka

 

Dear Professional Seniors & Friends,

 

Warm Greetings!

 

This post of MCQ is on the provisions relating to Adjudication Proceedings & Penalty under GST.

 

Answer MCQ 18.1: B) Till 3 years from the due date of filing annual return.

Answer MCQ 18.2: C) Penalty is required to be paid only after demand order &   Maximum penalty is 10% of Tax or Rs 10000 whichever is higher.

Answer MCQ 18.3: D) Penalty is required to be paid at the first stage that is along with tax.

Answer MCQ18.4: B) Proceeding cannot be initiated since order is issued after 3 years.

Answer MCQ18.5: C) 7 years from the due date of filing annual return.

 

Practical Analysis for MCQ 18.1 ,18.2 & 18.3  :-

Section 73 deals with cases other than due to fraud while Section 74 deals with cases due to fraud. The time limt for issuance of notice and demand order and the stage and amount of penalty applicable has been described detail below in slides –

Slides

  • As per analysis of provisions above, it is to be understand that maximum time limit for issuance of demand order is 3/5 years from the due date of filing annual return for relevant period.

 

  • Also as far as penalty is concerned, in the case of Section 73(i.e. no fraud case), penalty is applicable only after demand order has been issued and that too upto maximum of 10% of Tax amount or Rs 10,000 whichever is higher.

 

  • While penalty as per Section 74(i.e. fraud case), penalty is applicable at first stage i.e. as soon as default arises and amount of penalty varies from 15% to 100% of tax amount as per the period of delay.

 

Based on above Correct Answer to MCQ  18.1: B) Till 3 years from the due date of filing annual return, Correct answer to MCQ 18.2 : C) Penalty is required to be paid only after demand order & Maximum penalty is 10% of Tax or Rs 10000 whichever is higher and Correct answer to MCQ 18.3 : D) Penalty is required to be paid at the first stage that is along with tax.

 

 

Practical Analysis for MCQ 18.4

 

  • Section 75(2) provides that where any Appellate Authority or Appellate Tribunal or court concludes that the notice issued under sub-section (1) of section 74 is not sustainable for the reason that the charges of fraud or any wilful-misstatement or suppression of facts to evade tax has not been established against the person to whom the notice was issued, the proper officer shall determine the tax payable by such person, deeming as if the notice were issued under sub-section (1) of section 73.
  • As per Section 73, time limit to issue order is 3 years from the due date of furnishing annual return.

 

Based on above analysis, Correct Answer is 18.4: B) Proceeding cannot be initiated since order is issued after 3 years.

 

Practical Analysis for 18.5

 

  • Section 75(1) provides that where the service of notice or issuance of order is stayed by an order of a court or Appellate Tribunal, the period of such stay shall be excluded in computing the period specified Section 73 or 74 as the case may be.
  • Our case belongs to reasons involving fraud for which time limit is 5 years.
  • 2 years, tribunal has stays the service of notice which will be excluded from limit of 5 years.
  • So total time limt available to officer is 7 years from the due date of furnishing annual return.

 

Based on above analysis, Correct Answer is 18.5 : C) 7 years from the due date of filing annual return.

 

(Disclaimer: The objective of the MCQ post is just to discuss the concept, it may happen, by change of facts, the answer may be different. Please do not treat this as professional opinion; you can definitely have your own opinion.)

 

Sincere Regards!

CA Sanjay Kumar Agrawal

Mobile: 9810116321

 

To access MCQ posts regularly, please Join Telegram Channel:
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