Immunity from penalty u/s 270A, prosecution u/s 276C or 276CC – Section 270AA

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In our earlier post we had discussed what is penalty u/s 270A which is effective for cases of A.Y. 2017-18 and onwards. Now we shall discuss an immunity from such penalty by virtue of section 270AA and what are the conditions attached to same.

Plain text of Section 270AA is as under:

“(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 or section 276CC, if he fulfills the following conditions, namely:—

(a) the tax and interest payable as per the order of assessment or reassessment under sub-section (3) of section 143 or section 147, as the case may be, has been paid within the period specified in such notice of demand; and

(b) no appeal against the order referred to in clause (a) has been filed.

(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 fulfillment 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 276CC, 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.“

Important points from the above provision:

1. Immunity shall be available against penalty, prosecution or both?

A. As per sub section 1, immunity shall be available against penalty u/s 270A and prosecution against 276C or 276CC both.

2. What are the pre conditions before availing such immunity?

A. The immunity is available when the person pays tax along with interest demanded u/s 143(3) or 147 within due time mentioned in demand notice and no appeal is filed against such 143(3) or 147 order.

3. How to apply for such immunity and who can provide this immunity?

A. One need to apply in Form No. 68 for such immunity before the assessing officer.

4. What is the time limit to apply for such immunity?

A. One needs to apply for such immunity within 1 month from the end of the month in which order u/s 143(3) or 147 is issued.

5. What is the time limit for issuance of order by AO?

A. 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.

6. Whether immunity denial is appealable?

A. The order made under this section shall be final and hence non appealable.

7. Can assessment order be appealed against even if immunity is granted?

A. No appeal or an application for revision shall be admissible against the order of assessment or reassessment, where an order has been made accepting the application.

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