Sec 270AA(4) obligates AO to mandatorily pass order on application seeking immunity penalty, even if filed belatedly

While considering the issue as to whether delay in filing Form 68 as per provisions of Section 270AA of the Income Tax Act, 1961, can be condoned, the Income Tax Appellate Tribunal Bench at Hyderabad observed that the authority receiving such as application was statutorily obligated to pass an order accepting or rejecting the application.

The purpose of granting immunity to the assessee was to avoid litigation in case an assessee accepted its tax liability and paid the taxes due, the Bench clarified.

The Bench further observed that the power of condoning the delay vests with all the quasi-judicial authorities and judicial authorities, in case a reasonable cause has shown by the assessee for not filing the requisite application within the period provided under the Act.

A Division Bench of Mr. RK Panda, Accountant Member, and Mr. Laliet Kumar, Judicial Member, further observed that neither the Assessing Officer (AO) nor the Commissioner of Income Tax (Appeals) could condone delay in filing Form 68 beyond 30 days from receipt of assessment order computing the tax liability.

The Appellate-Assessee was represented by Mr. C.S. Subrahmanyam, whereas the Respondent-Revenue was represented by Mr. Rajendra Kumar, Commissioner of Income Tax-Departmental Representative.

The Assessee, an individual, filed return for the relevant period, declaring taxable income of about Rs 95 Lakhs. On assessment, the AO noted that the Assessee owned certain foreign assets, and so issued notices under Section 143(2) and Section 142(1) of the Act, calling for certain information. The details sought for were furnished electronically.

Considering the evidence at hand, the AO framed certain additions to the Assessee’s income. The AO also commenced penalty proceedings under Section 274 read with Section 270A. Penalty of about Rs 31000/- came to be imposed. On appeal, the Assessee got partial relief only.

On hearing the arguments of both parties, the Bench noted that the Assessee after receipt of the order, the Assessee had filed an application for grant of immunity with a delay of 4 days. Although the law required that an assessee to move an application within one month as per Clause 2 of Section 270AA, however, there is no provision which prohibited an assessee from moving an application thereafter which prevented assessee from filing the application within period of limitation.

Even if the assessee had filed the application belatedly, the AO was duty bound to pass an order as per clause 4 of section 270AA of the Act either accepting or rejecting the application of the assessee, the Bench observed.

With these observations, the Bench remanded the matter for re-consideration of the Assessee’s application seeking immunity from imposition of penalty as per Section 270AA of the Act.

Cause Title: Nirajita Mitra vs. Income Tax Officer [ITA.No.579/Hyd/2022 / 2023-Enterslice-9-ITAT-Del]

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