Spunwell Syntex Private Ltd. Vs ITO (Rajasthan High Court)
Summary: The Rajasthan High Court at Jodhpur dismissed the writ petition filed by Spunwell Syntex Private Ltd. challenging rejection of its application for immunity from penalty under Section 270AA of the Income Tax Act, 1961 in relation to penalty proceedings under Section 270A for AY 2018-19. The petitioner’s deduction claim under Section 80 had been disallowed in assessment, following which it paid the assessed demand without filing an appeal and applied for immunity in Form No. 68. It challenged the rejection of immunity and subsequent penalty on the grounds that the notice and rejection order did not adequately specify the alleged misreporting, no personal hearing was provided, and the immunity application was not decided within the period prescribed under Section 270AA(4). Relying on the statutory scheme of Sections 270A and 270AA applicable to the proceedings, the Court held that the case involved “under-reporting of income in consequence of misreporting” falling within Section 270A(9), as the assessment order recorded non-production of accounting records relating to income from the solar plant unit, and therefore immunity under Section 270AA was unavailable. The Court further held that failure to specify a particular sub-category of Section 270A(9) in the show-cause notice did not, by itself, render the proceedings arbitrary or violate natural justice because the petitioner was sufficiently aware that the allegation concerned under-reporting consequent upon misreporting. It also rejected the limitation contention, holding that the period relied upon by the petitioner did not require disposal of an immunity application involving misreporting within that timeframe. Finding no illegality warranting interference, the High Court dismissed the writ petition and disposed of all pending applications.
