Procedure
(1) The tax authority shall, for the purposes of imposing any penalty under this Chapter, issue a notice to an assessee requiring him to show cause why the penalty should not be imposed on him.
(2) The notice referred to in sub-section (1) shall be issued—
(a) during the pendency of any proceedings under this Act for the relevant previous year, in respect of penalty referred to in section 41;
(b) within a period of three years from the end of the financial year in which the default is committed, in respect of penalties referred to in section 45.
(3) No order imposing a penalty under this Chapter shall be made unless the assessee has been given an opportunity of being heard.
(4) An order imposing a penalty under this Chapter shall be made with the approval of the Joint Commissioner, 5[or the Joint Director] if—
(a) the penalty exceeds one lakh rupees and the tax authority levying the penalty is in the rank of Income-tax Officer; or
(b) the penalty exceeds five lakh rupees and the tax authority levying the penalty is in the rank of Assistant Commissioner or Deputy Commissioner 6[or Assistant Director or Deputy Director].
(5) Every order of penalty issued under this Chapter shall be accompanied by a notice of demand in respect of the amount of penalty imposed and such notice of demand shall be deemed to be a notice under section 13.