Immunity from imposition of penalty and prosecution [New section 270AA]

Related amendment in section: 249

Effective from: A.Y.2017-18

(i) Application to be made by the assessee to Assessing Officer for grant of immunity from penalty and prosecution [Section 270AA(1)]

An assessee may make an application to the Assessing Officer for grant of immunity from imposition of penalty under section 270A and initiation of proceedings under section 276C or section 276CC, if he –

(1) pays the tax and interest payable as per the order of assessment under section 143(3) or reassessment under section 147, within the period specified in such notice of demand; and

(2) does not prefer an appeal against such assessment/reassessment order.

(ii) Time limit for making application [Section 270AA(2)]

The assessee can make such application in the prescribed form and verified in the prescribed manner within one month from the end of the month in which the order of assessment or reassessment is received

(iii) Circumstances in which the Assessing Officer cannot grant immunity from penalty and prosecution [Section 270AA(3)]

The Assessing Officer shall grant immunity from initiation of penalty under section 270A and prosecution under section 276C or section 276CC, on fulfilment of the conditions specified in (1) and (2) of (i) above, and after the expiry of period of filing  appeal as specified in section 249(2).

However, immunity shall be granted by the Assessing Officer only if the penalty proceedings under section 270A have not been initiated on account of the following, namely:—

(a) misrepresentation or suppression of facts;

(b) failure to record investments in the books of account;

(c) claim of expenditure not substantiated by any evidence;

(d) recording of any false entry in the books of account;

(e) failure to record any receipt in books of account having a bearing on total income; or

(f) failure to report any international transaction or any transaction deemed to be an international transaction or any specified domestic transaction to which the provisions of Chapter X apply.

(iv) Time limit for passing order accepting or rejecting application for immunity from penalty and prosecution [Section 270AA(4)]

The Assessing Officer shall pass an order accepting or rejecting the application for immunity from penalty under section 270A or prosecution under section 276C or section 276CC within a period of one month from the end of the month in which such application is received. However, in the interest of natural justice, no order rejecting the application shall be passed by the Assessing Officer unless the assessee has been given an opportunity of being heard.

(v) Finality of order passed by the Assessing Officer under section 270AA(4) [Section 270AA(5)]

The order of the Assessing Officer passed under section 270AA(4) accepting or rejecting the application made by the assessee for immunity from penalty under section 270A or prosecution under section 276C or section 276CC shall be final.

(vi) Order of assessment/reassessment, in respect of which application for immunity is accepted, is neither appealable before Commissioner (Appeals) nor can the same be admitted by Commissioner for revision under section 264 [Section 270AA(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 section 270A(1)(a), in a case where an order under section 270AA(4) has been made accepting the application.

(vii) Exclusion of period when application for immunity is pending before Assessing Officer from the time limit for filing of appeal before Commissioner (Appeals), in a case where such application is rejected [Second Proviso to section 249(2)(b)]

As per section 249(2)(b), an appeal before the Commissioner (Appeals) is to be made within 30 days of the receipt of the notice of demand relating to an assessment or penalty, where the appeal relates to such assessment or penalty.\ In a case where the assessee makes an application under section 270AA seeking immunity from penalty, then, the following period has to be excluded for calculation of the aforesaid thirty days period –

Exclusion of period
beginning from	ending with
the date on which application under section 270AA for immunity from penalty under section 270A is made	the date on which the order rejecting the application is served on the assessee.