#Penalty Law

The Supreme Court ruled that a penalty can be imposed only when the Foreign Travel Tax is not paid at all, and that a one-day delay in deposit does not attract the fine under Section 38(3). This limits liability to non-payment, obliges the government to refund the Rs 71.29 million penalty with interest, and affects airlines and other carriers subject to the tax.

When an appellate authority deletes an addition of unexplained income under Section 69A, penalties imposed under Sections 271AAC(1) and 272A(1)(d) automatically lapse - the penalty cannot stand without its foundational tax liability. This ruling protects cooperative societies and other assessees from punitive measures rooted in nullified assessments, reinforcing that penalties are consequential, not independent, under the Income Tax Act.

The Rajasthan High Court has ruled that imposing the penalty of withholding an annual grade increment cannot be treated as a de facto denial of promotion, affirming that these are distinct penalties under CCS Rules. This clarifies a critical distinction for government employees facing disciplinary action, ensuring promotion eligibility remains intact unless explicitly withheld under proper procedure.