Unlike section 271(1)(c), Immunity from new penalty u/s 270A is subject to riders

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Unlike section 271(1)(c), Immunity from new penalty u/s 270A is subject to riders

Unlike section 271(1)(c), Immunity from new penalty u/s 270A is subject to riders 

Penalty u/s 271(1)(c) has incorporated the word “may” signifying its discretionary nature. Till AY 2016-17, penalty was attracted u/s 271(1)(c) which was imposable Concealment of income or for inaccurate furnishing of return of income. The applicability of section 271(1)(c) is there till 31.03.2016. From the FY 2016-17 i.e., Financial year commencing from 01.04.2017, section 270A is going to be at the disposal of income tax department in lieu of section 271(1)(c).  Section 270A provides for levy of penalty for misreporting or under reporting of income. The biggest difference

AO has been empowered to grant immunity from levy of penalty u/s 270AA. However, it is subject to riders. Section 270AA reads as under:

“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:— 

  • 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
  • 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 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.”.

Unlike power to grant immunity u/s 271(1)(c), immunity from section 270A is subject to the rider not enumerated in erstwhile penal provision. Earlier, there was of appeal and discretionary power to levy penalty were co-existing. Now, immunity is subject to the condition that

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

It means that assessee preferring an appeal cannot get an immunity from AO U/s 270AA. Time has come when penalty is turning out to be more costlier than the tax itself.

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