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Insertion of section 270AA is welcoming initiative taken by the revenue to reduce the litigation, collect the demand at the earliest and immunise the assessee from imposition of penalty. This initiative is equally in interest of assessee as well as revenue.

Section 270AA states 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:—

(a) 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
(b) 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.”.

Above provisions, it can be stated that section 270AA provides alternate remedy to the assessee from penalty u/s 270A.

Responsibility of Revenue to guide the assessee about the provisions of section 270AA:

The attention of revenue is to be drawn that availability of such remedy, i.e. provisions of section 270AA, to the assessee should be mentioned in the penalty notice u/s 270A to make assessee aware of the same.

In this regard, we are putting our reliance on one of the old Circular issued by the Central Board of Direct Taxes Circular No: 14 (XL-35) dated April 11, 1955 which states as under:

“Officers of the Department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the Officers should take the initiative in guiding a taxpayer where proceedings or other particulars before them indicate that some refund or relief is due to him. This attitude would, in the long run, benefit the Department for it would inspire confidence in him that he may be sure of getting a square deal from the Department. Although, therefore, the responsibility for claiming refunds and reliefs rests with assessee on whom it is imposed by law, officers should

(a) Draw their attention to any refunds or reliefs to which they appear to be clearly entitled but which they have omitted to claim for some reason or other;

(b) Freely advise them when approached by them as to their rights and liabilities and as to the procedure to be adopted for claiming refunds and reliefs.”

It has been noted that assessing officer mentions the details of appellate authority and time limit to file the appeal in its order to make assessee aware that he can file an appeal against such order which is a live example of assessing officer complying with the circular mentioned above.

But it is observed that there is no such communication by Assessing officers in their notice u/s 270A regarding the remedy available to assessee under section 270AA.

It is humbly submitted that assessing officer is a representative of revenue at grass root level and interface of revenue with the assessee. It is duty of assessing officer to make assessee aware of all the reliefs or remedies available to him.

Thus, through this article we would like to request the revenue that in all notices issued u/s 270A, the remedy of 270AA should be mentioned.

Also, there are many assesses who have complied with conditions mentioned in the section 270AA (payment of tax and interest thereon within 30 days or later and not filling of appeal against such order) but being unaware regarding the immunity available to them under section 270AA has not made an application.

Thus, it is requested to provide the immunity to all such assessee to whom notices have been issued after introduction of section 270AA and they have paid the tax amount and interest thereon mentioned in the order and have not filed the appeal against such order.

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April 2024