87 Automatic mitigation and increase of penalties

(1) Where as a result of any proceedings the amount of tax with respect to which a penalty was levied has been wholly reduced, the penalty levied shall be cancelled and if the penalty has been paid, it shall be refunded.

(2) If

(a) a person is liable to pay a penalty under sub-section (12) of section 86 of this Act; and

(b) the person voluntarily discloses to the Commissioner in writing the existence of the tax deficiency before the Commissioner informs the person that an audit of the persons tax obligations is to be carried out;

the amount of the penalty otherwise due shall be reduced by eighty per cent of the penalty.

(3) If 

(a) a person is liable to pay a penalty under sub-section (12) of section 86 of this Act; and

(b) the person voluntarily discloses to the Commissioner in writing the existence of the tax deficiency after the Commissioner informs the person that an audit of the persons tax obligations is to be carried out;

the amount of the penalty due shall be reduced by fifty per cent of the penalty.

(4) If

(a) a person is liable to pay a penalty under sub-section (12) of section 86 of this Act;

(b) the tax deficiency arose because the person treated this Act as applying to the person in a particular way; and

(c) the decision to adopt that treatment was made by the person relying on a determination given to the person by the Commissioner under section 84 of this Act or a ruling issued by the Commissioner under section 85 of this Act;

the amount of the penalty otherwise due shall be reduced to nil.

(5) Where 

(a) penalty under this Act has been assessed;

(b) the penalty has not been remitted in full after objection; and

(c) the person is subsequently assessed to a further penalty in respect of the same or a substantially similar failure occurring on another occasion (in this section called the subsequent offence);

the penalty otherwise due under this Act shall be increased by 

(i) in the case of the first subsequent offence, fifty per cent of the specified penalty; and

(ii) in the case of the second and any further subsequent offence, one hundred per cent of the specified penalty.

(6) if-

(a) a person liable to pay penalty under section 86 of this act; and

(b) the person voluntarily discloses to the commissioner, in writting, the exsistence of the tax deficiency, during the course of proceedings under section 60; and

(c) makes payment of such tax deficiency within three working days of the conclusion of the said proceedings

the amount of the penalty otherwise due, against the admitted and paid tax, shall be reduce by eighty percent.