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The only proceeding pending against an assessee is for a penalty under section 444 of the Income-tax Act, 2025, likely to be ₹50 lakh. Can the Assessing Officer provisionally attach the assessee's…

Question and options

The only proceeding pending against an assessee is for a penalty under section 444 of the Income-tax Act, 2025, likely to be ₹50 lakh. Can the Assessing Officer provisionally attach the assessee's property under section 500 on the strength of that proceeding?

  1. No, because the likely penalty does not exceed ₹2 crore

  2. Yes, with the previous approval of the Competent Authority

  3. No, because attachment is not available in penalty proceedings

  4. Yes, because the likely penalty exceeds ₹25 lakh

Answer and explanation

Correct answer: A - No, because the likely penalty does not exceed ₹2 crore

Section 500(1)(b) of the Income-tax Act, 2025 allows provisional attachment during a section 444 penalty proceeding only where the penalty likely to be imposed exceeds ₹2 crore, and even then only with the previous approval of the Competent Authority. Approval cannot cure a case below the threshold, but attachment is available in such penalty proceedings when the threshold is crossed.

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