SEBI Executive Director empowers full-time members on reduction, waiver of interest on unpaid fines

India’s stock market regulator Securities and Exchange Board of India (Sebi) on Friday delegated powers to a panel of executive directors and whole-time members to waive or reduce interest on recovery proceedings initiated for failure to pay penalties.

In a circular issued today (January 10), SEBI has asked its panel of executive directors where interest amounting to Rs. Allowed to waive or reduce interest where it is less than 2 crores. In other cases, a panel of full-time directors may reduce or omit it.

Section 220(2) of the Income Tax Act, 1961 empowers the Recovery Officer of SEBI to recover the arrears with applicable interest. Before the Circular was issued, the power to reduce or waive the amount of interest paid or payable was with the Principal Chief Commissioner or the Chief Commissioner or the Principal Commissioner or the Commissioner.

Further, the SEBI Board has approved that the waiver or reduction of interest shall not be applicable in cases where interest for failure to remit fees to the Board is charged to intermediaries as per the relevant arbitration rules.

This new rule shall also not apply where interest is charged on the amount disgorged or directed to be refunded pursuant to orders passed under Sections 11, 11B, 11(4) of the SEBI Act.

Application Procedure

1) An application seeking remission or reduction of interest may be forwarded to the recovery officer having requisite jurisdiction over the matter in the format prescribed under SEBI norms. The applicant has to submit all the documents in Aadhaar as per the prescribed Income Tax norms.

Act, 1961.

The applicant will be required to place on record supporting documents that the payment of such amount has caused or will cause genuine hardship to the assessee. Documents supporting the reason for default in payment of amount. The applicant will also have to prove that he has cooperated in any inquiry relating to the assessment or in any proceedings for recovery of dues from him.

An application for remission or reduction of interest can be sought only for the period subsequent to the service of the demand notice.

Moreover, the application can be filed only in cases where the principal amount under the demand notice has been paid in full.

The order accepting or rejecting the application, in whole or in part, shall be passed within a period of twelve months from the end of the month in which the application complete in all respects is received by the Regulator.

No order rejecting the application shall be passed until the applicant has been given an opportunity of being heard.

Also Read: Metal sector Q3FY25 earnings to be mixed bag Vedanta, Coal India among 8 top brokerage buys

(Disclaimer: Recommendations, suggestions, opinions and views given by experts are their own. These do not represent the views of Economic Times)