Aarav Textiles Pvt. Ltd. is a manufacturing company engaged in the production and export of high-quality textiles and leather goods. The company…

CA Final · Direct Tax Laws and International Taxation · MTP · September 2025
Aarav Textiles Pvt. Ltd. is a manufacturing company engaged in the production and export of high-quality textiles and leather goods. The company commenced operations in April 2023 and during its first year of operations (F.Y. 2023-24), it experienced rapid growth, achieving significant turnover. While preparing for the statutory compliance review in January 2025, the management of Aarav Textiles discovered that it had- Failed to pay tax deducted at source amounting to 52 lakhs for the 1st Quarter of the F.Y. 2023-24.Failed to pay tax collected at source of 85 lakhs on sale of goods to a trader which takes place in the month of August, 2023. To avoid prosecution, the company's legal team advised filing a Consolidated Compounding Application with the competent authority of the Income Tax Department. The consolidated application, covering both defaults in a single application, was duly prepared and filed on 22nd January 2025. In this case, how much should Aarav Textiles Pvt. Ltd. pay as the Compounding Application Fee for filing the Consolidated Compounding Application?
(A) ₹ 25,000.
(B) ₹ 50,000
(C) No, Fee is required for consolidated compounding application
(D) ₹ 10,000

Suggested Answer and Working Notes:

Correct Answer: Option (B)

₹ 50,000

Topics: Double Taxation Relief, Non-Resident Taxation

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