CIRCULAR
SEBI/HO/RRD_PoD_TPD/P/CIR/2025/05 January 10, 2025
To,
All persons against whom recovery proceedings are initiated.
Madam/Sir,
Sub: Procedure for seeking waiver or reduction of interest in respect of recovery
proceedings initiated for failure to pay penalty.
1. Section 28A of the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’),
Section 23JB of the Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and
Section 19IB of the Depositories Act, 1996 (‘Depositories Act’) (collectively referred
as “relevant securities laws provisions”) provide that during the exercise of powers
for recovery of dues, provisions of Sections 220 to 227, 228A, 229, 232, the Second
Schedule and the Third Schedule to the Income-tax Act, 1961 and the Income-tax
(Certificate Proceedings) Rules, 1962, as in force from time to time, in so far as may
be, shall apply with necessary modifications, as if the said provisions and the rules
made thereunder were the provisions of these Acts and refer to the amount due
under these Acts instead of income-tax under the Income-tax Act.
2. Section 220(2) of the Income-tax Act, 1961 empowers the Recovery Officer of SEBI
to recover the outstanding amount along with the applicable interest as specified
therein. Section 220(2A) of the Income-tax Act, 1961 confers powers on the
Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or
Commissioner to reduce or waive the amount of interest paid or payable.
3. In line with the above, the Board has delegated the power to waive or reduce the
interest levied only in respect of recovery proceedings initiated for failure to pay
penalty, to the Competent Authority provided hereunder:
a) Panel of Executive Directors of SEBI, where the amount of interest sought
to be waived or reduced is less than Rs. 2 crores;
b) Panel of Whole-time Members, in other cases.
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4. Further, the Board has approved that the waiver or reduction of interest shall not be
applicable in the following cases and the same shall be returned forthwith:
a) where interest for failure to remit fees to the Board is levied on the
intermediaries in accordance with respective intermediary regulations;
b) where the interest on the amount directed to be disgorged or refunded is
levied in accordance with the orders passed under section 11, 11B, 11(4)
of the SEBI Act.
5. Procedure for application:
A. The application seeking waiver or reduction of interest may be forwarded to the
Recovery Officer having the necessary jurisdiction over the matter in the format
detailed in Annexure A; along with all documents in support of the satisfaction of
requirements under clauses (i), (ii) and (iii) of Section 220 (2A) of the Income-tax
Act, 1961. The said clauses are reproduced hereunder for ease of reference:
(i) payment of such amount has caused or would cause genuine hardship to
the assessee;
(ii) default in the payment of the amount on which interest has been paid or
was payable under the said sub-section was due to circumstances beyond
the control of the assessee; and
(iii) the assessee has co-operated in any inquiry relating to the assessment or
any proceeding for the recovery of any amount due from him:
B. The application for waiver or reduction of interest may only be sought for the period
subsequent to the service of the notice of demand.
C. An application may be filed only in the cases where the principal amount due under
the notice of demand stands fully paid.
D. The Recovery Officer shall place the application complete in all respects before the
Competent Authority for consideration.
E. The order accepting or rejecting the application, either in full 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. However, for applications pending
as on the date of issuance of this circular, order accepting or rejecting the
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application, either in full or in part, shall be passed within a period of twelve months
from the end of the month of the issuance of this circular.
F. No order rejecting the application, either in full or in part, shall be passed unless the
applicant has been given an opportunity of being heard.
G. An application that is not complete in all respects or does not conform to the
requirements of this circular shall be returned to the applicant.
6. This circular is being issued in exercise of powers conferred under Section 11(1)
read with Section 28A of the Securities and Exchange Board of India Act, 1992.
7. This circular is issued with the approval of the competent authority.
8. This circular shall be applicable with immediate effect.
9. This Circular is available on the website of the Securities and Exchange Board of
India at www.sebi.gov.in under the category “Legal” and under the header
“Circulars”.
Yours faithfully,
Kirtikumar P. Jadhav
Deputy General Manager
Recovery and Refund Department
Tel No.022-26449564
Email ID - kpjadhav@sebi.gov.in
Encl.: As above
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Annexure A
Information about the Applicant / Defaulter
1 Name
2 PAN Number
3 Address
4 Email
5 Mobile Number / Contact Details
6 Details of Recovery Certificate pursuant to which
the application is being made
7 Details of payments made by you towards the
Recovery Certificate
8 Details of request(s) of waiver/reduction of interest
made by you in any other recovery proceedings
and its outcome
9 Details of all the assets
10 Submissions along with supporting documents for
satisfying the following conditions:
A. Payment of such amount has caused or
would cause genuine hardship to you;
B. Default in the payment of the amount on
which interest has been paid or was payable under
the said sub-section was due to circumstances
beyond your control; and
C. You have co-operated in any inquiry relating
to any show cause notice issued by SEBI or any
proceeding for the recovery of any amount due
from you.
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