Joydeep Mukherjee Vs DCIT (ITAT Bangalore)
Penalty U/s 270A – Immunity Application U/s 270AA Cannot Be Rejected Without Hearing – Matter Remanded to AO – ITAT Bangalore
Assessee did not file return u/s 139 for AY 2018-19. Based on information regarding salary income, mutual fund investments, interest income, rent and property purchases, the department issued notice u/s 148. In response, assessee filed return declaring income of about ₹4.14 crore, which was accepted in reassessment u/s 147 r.w.s. 144. However, AO initiated penalty u/s 270A for under-reporting of income and levied penalty of ₹70.62 lakh.
During penalty proceedings, the assessee filed Form-68 seeking immunity u/s 270AA, stating that tax demand had been paid and no appeal had been filed against the assessment order. AO rejected the claim for immunity on the ground that the assessee had not complied with the conditions and also noted that no rectification application was found in the records. CIT(A) confirmed the penalty.
ITAT observed that section 270AA(4) mandates that before rejecting an application for immunity, the AO must provide an opportunity of hearing to the assessee. In the present case, the AO rejected the immunity request without granting such opportunity and without examining the rectification claim properly. This amounted to violation of the principles of natural justice.
Accordingly, the Tribunal set aside the orders of the lower authorities and restored the matter to the AO to reconsider the assessee’s application for immunity u/s 270AA after granting proper opportunity of hearing. The AO was also directed to allow the assessee to contest the penalty u/s 270A on merits if immunity is not granted.
Thus, the appeal was allowed for statistical purposes and the issue remanded to the AO.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
ITA No. 2017/Bang/2025 for assessment year 2018 – 19 is filed by Joydeep Mukherjee (the assessee/appellant) against the appellate order passed by the Commissioner of Income Tax (Appeals), Bengaluru – 12 (the learned CIT – A) dated 14 August 2025 wherein the assessee’s appeal against the penalty order passed under section 270A of the Income Tax Act, 1961 [the Act] dated 30 August 2024 passed by the Deputy Commissioner of Income Tax, International Taxation, Circle 1 (2), Bangalore (the learned AO) of ₹ 7,062,608/– was dismissed.
