Section 270AA of the Income-tax Act allows taxpayers to seek immunity from penalty and prosecution under specified conditions. Currently, the Assessing Officer must process such applications within one month from the end of the month in which the application is received. Based on stakeholder feedback about the challenges faced in representing their cases within this timeframe, the Finance Bill 2025 proposes extending the processing period to three months. This amendment aims to provide taxpayers with sufficient time for representation and ensure a fair review process. The revised timeline will be effective from April 1, 2025.
Budget 2025: Extending the processing period of application seeking immunity from penalty and prosecution
Section 270AA of the Act provides, inter-alia, procedure of granting immunity by the Assessing Officer from imposition of penalty or prosecution, subject to fulfillment of certain conditions as mentioned therein. Sub-section (2) of the said section provides that an application for granting immunity from imposition of penalty 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) of the said section has been received by the assessee. Sub-section (4) of the said section provides that Assessing Officer shall pass an order accepting or rejecting the application, within a period of one month from the end of the month in which the application requesting immunity is received.
2. Inputs have been received from the stakeholders that tax-payers are facing challenges to represent their case within this limited period and therefore the period for processing their applications may be increased.
3. In view of the same, it is proposed to amend the sub-section (4) of section 270AA of the Act so as to extend the processing period to three months from the end of the month in which application for immunity is received by the Assessing Officer.
4. This amendment will take effect from the 1st day of April, 2025.
[Clause 74]
Extract of Relevant Clauses of Finance Bill, 2025
Clause 74 of the Bill seeks to amend section 270AA of the Income-tax Act, 1961 relating to immunity from imposition of penalty, etc.
The said section, inter alia, provides procedure of granting immunity by the Assessing Officer from imposition of penalty or prosecution, if assessee fulfils the conditions specified therein.
Sub-section (4) of the said section provides that the Assessing Officer shall pass an order accepting or rejecting the application, within a period of one month from the end of the month in which the application requesting immunity is received.
It is proposed to amend the said sub-section so as to extend the processing period to three months from the end of the month in which application for immunity is received by the Assessing Officer.
This amendment will take effect from 1st April, 2025.
Extract of Relevant Amendment Proposed by Finance Bill, 2025
74. Amendment of section 270AA.
In section 270AA of the Income-tax Act, in sub-section (4), for the words “one month”, the words “three months” shall be substituted.
