EXAMPLE

An order was issued to A Ltd in which the Joint Commissioner has confirmed tax demand of Rs.10 lakh (out of which tax = Rs.6 lakh is admitted by the applicant) and imposed a penalty of equal amount. A intended to file an appeal with appellate authority against order of adjudicating authority. Compute the quantum of pre-deposit required to be made by A Ltd for filing an appeal to the appellate authority.

In the above case what would be the quantum of pre-deposit if an appeal is filed against an order of appellate authority to appellate tribunal whereby tax = Rs. 3 lakh is admitted by the applicant?

ANSWER

(i) Pre-deposit in case of appeal to appellate authority As per section 107(6):
Tax admitted by applicant = Rs.6 lakh
Penalty = Rs.6 lakh


Tax not admitted by applicant = Rs.4 lakh
Pre-deposit = 10% of Rs.4 lakh
Therefore total pre-deposit = Rs.12.4 lakh

(ii) If out of 4 lakh, 3 lakhs is admitted by the applicant, the amount of pre-deposit (section 112(8)) when appealed to appellate tribunal is made shall be:
Tax admitted by applicant = Rs.3 lakh
Penalty = Rs.3 lakh


Tax not admitted by applicant = Rs.1 lakh
Pre-deposit = 20% of Rs.1 lakh + 10% of 4 lakh = Rs.60,000


Therefore total pre-deposit = Rs.6.6 lakh