On 8 October 2026, the CBDT issued Notification No. 134/2026, notifying the Income-tax (Sixth Amendment) Rules, 2026. The amendment introduces a revised Form 161 for filing applications seeking waiver of penalty under Section 440(2) of the Income-tax Act, 2025. Section 440(2) empowers the Principal Commissioner or Commissioner to waive penalty imposed under the Act if the taxpayer satisfies prescribed conditions. The new Form 161 replaces the earlier format and incorporates additional fields requiring the applicant to disclose the specific penalty provision invoked, amount of penalty, grounds for waiver supported by documentary evidence, and a declaration of no pending prosecutions. The form must be filed electronically on the e-filing portal. The amendment reflects the CBDT’s focus on digitizing discretionary relief mechanisms and ensuring data-driven decision-making by penalizing authorities.
Key Takeaways
- Mandatory Electronic Filing with Enhanced Disclosures: The revised Form 161 requires taxpayers to provide a chronological narrative of events leading to the default, corrective actions taken, and a self-certification that the default was not intentional. This shifts the burden of proof onto the applicant and reduces subjective discretion by the Commissioner.
- Integration with Compliance History Database: The new form captures the taxpayer’s PAN, assessment years involved, and penalty order details, enabling automatic verification against the Centralized Processing Centre (CPC) database. Taxpayers with a history of repeated defaults or prosecution cases will face higher scrutiny, making proactive compliance essential.
- Strategic Timing for Waiver Applications: Since the form requires a declaration of no pending prosecutions, taxpayers must evaluate the status of any parallel proceedings before filing. Premature applications may be rejected, while delayed filings risk limitation bars. Professional advice is recommended to optimize the timing and content of waiver submissions.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement