Recently, the Income Tax department has imposed a huge fine on a public sector bank. Bank of India (BoI) has recently received an order from the Income Tax Department, Assessment Unit, relating to the assessment year 2018-19. The order entails a penalty of ₹564.44 crore imposed on various disallowances made.
Why Bank of India has been fined by Income Tax?
In the context of the penalty imposed on Bank of India (BoI), “disallowances” refer to certain expenses or deductions that the bank claimed but were not considered valid or allowable by the Income Tax Department. These disallowances may include expenses that are not eligible for deduction under the provisions of the Income Tax Act, 1961, or expenses that are in violation of any law or regulation.
What Bank of India said?
In response, BoI has stated that it is currently in the process of filing an appeal before the Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), within the specified timelines. This appeal is being made under section 270A of the Income Tax Act, 1961. The bank is confident in its ability to substantiate its position in the matter, citing adequate factual and legal grounds based on the precedence and orders of appellate authorities.
BoI expects the entire demand to subside as a result of the appeal. The bank has assured that there will be no impact on its financial standing, operations, or other activities due to this penalty.
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