Immunity from imposition of penalty Section 270AA

Section 270AA of Income tax Act 1961

Salient Features of Section 270AA regarding  Immunity from imposition of penalty, etc

• The assessee can make an application, in the prescribed form and verify the same in prescribed manner, from the end of the month in which assessment order under section 143(3) of the Act or reassessment order under section 147 of the Act is received;
• The tax and interest, as demanded, as per the assessment or reassessment are paid within the time specified in Notice of demand issued under section 156 of the Act
• The assessee does not file any appeal against the order of assessment or reassessment;
• The Assessing Officer shall pass the order, within one month from the end of the month in which the assessee makes the application, accepting or rejecting the application for immunity;
• Only Assessing Officer has the power to grant immunity.Commissioner and/or the Commissioner (Appeals) does not have some such power under the section. Thus where the penalty is initiated by the Commissioner (Appeals)  an application for immunity under the section cannot be made.
• The order rejecting the application shall not be passed without giving an opportunity of being heard to the assessee;
• The order passed under the section would be final; Hence, it cannot be re-opened or revised or reviewed.
• Where the application for immunity is accepted and an order is passed under the section, no appeal or revision would lie against the assessment or reassessment order.
• Where the application is rejected , it should be possible to file an appeal.Section 249 is amended by the Finance Act 2016 ,  to exclude the period from the date of application till the date of service of the order rejecting the application on the assessee, to determine the period of limitation for filing an appeal.

Section 99 of Finance Act 2016 inserted the new section 270AA in Income Tax Act 1961

Insertion of new section 270AA.

99. After section 270A of the Income-tax Act as so inserted, the following section shall be inserted with effect from the 1st day of April, 2017, namely:—

“270AA. Immunity from imposition of penalty, etc.—(1) An assessee may make an application to the Assessing Officer to grant immunity from imposition of penalty under section 270A and initiation of proceedings under section 276C of section 276CC, if he fulfils the following conditions, namely:—

(2) An application referred to in sub-section (1) shall be made within one month from the end of the month in which the order referred to in clause (a) of sub-section (1) has been received and shall be made in such form and verified in such manner as may be prescribed.

(3) The Assessing Officer shall, subject to fulfilment of the conditions specified in sub-section (1) and after the expiry of the period of filing the appeal as specified in clause (b) of sub-section (2) of section 249, grant immunity from imposition of penalty under section 270A and initiation of proceedings under section 276C or section 286CC, where the proceedings for penalty under section 270A has not been initiated under the circumstances referred to in sub-section (9) of the said section 270A.

(4) The Assessing Officer shall, within a period of one month from the end of the month in which the application under sub-section (1) is received, pass an order accepting or rejecting such application:

Provided that no order rejecting the application shall be passed unless the assessee has been given an opportunity of being heard.

(5) The order made under sub-section (4) shall be final.

(6) No appeal under section 246A or an application for revision under section 264 shall be admissible against the order of assessment or reassessment, referred to in clause (a) of sub-section (1), in a case where an order under sub-section (4) has been made accepting the application.”.

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