Yes, and since 1 March 2026 that is true even where the charge is misreporting. To 28 February 2026 immunity was available only for under-reporting, and a charge under s.270A(9) shut the section out. The Finance Act 2026 substituted s.270AA(1) to (3) with effect from 1 March 2026: you may now also ask for immunity, or for waiver where the penalty has already been levied, on a s.270A(9) charge, if you pay additional income-tax of one hundred per cent of the tax on the under-reported income within the period specified in the demand notice, in lieu of that penalty. In every version you must pay the tax and interest in the assessment order within the time in the demand notice, not file an appeal against that order, and apply within one month from the end of the month in which you received it; if immunity is granted you cannot later appeal under s.246A or apply under s.264 against that assessment. New s.270AA(3A) refuses immunity and waiver where any proceeding under Chapter XXII has been initiated, and from 1 April 2026 s.440 of the Income-tax Act 2025 carries the same trade forward, at 100 per cent for the s.439(11)(a) to (f) cases and 120 per cent for the new s.439(11)(g) case.
The trade. Section 270A charges penalty of 50% of the tax payable on under-reported income, and 200% where the under-reporting is in consequence of misreporting. Section 270AA lets you avoid the 50% penalty and prosecution under ss.276C and 276CC by accepting the assessment and paying.
The two conditions. First, the tax and interest payable as per the order of assessment or reassessment under s.143(3) or s.147 must have been paid within the period specified in the notice of demand. Second, no appeal against that order has been filed.
The exclusion that decided most cases, and the date it stopped deciding them. To 28 February 2026 immunity was not available at all where the penalty proceedings were for under-reporting in consequence of misreporting under s.270A(9) — misrepresentation or suppression of facts, failure to record investments in the books, unsubstantiated claims of expenditure, false entries, failure to record receipts affecting total income, or failure to report international or specified domestic transactions. On any application decided on that text, and so on an AY 2022-23 assessment worked through on it, the bar is absolute and the first thing to read is the penalty show-cause notice: does it allege under-reporting simpliciter, or misreporting? From 1 March 2026 the answer to that question no longer ends the matter. It fixes the price instead. On an under-reporting charge immunity still costs nothing beyond the tax and interest already demanded; on a s.270A(9) charge, substituted s.270AA(1)(b) requires additional income-tax of one hundred per cent of the tax on the under-reported income, paid within the period specified in the notice of demand, in lieu of the penalty. Set that against the two hundred per cent in s.270A(8) and the trade is halving the exposure and giving up the appeal.
What else the substitution changed. Sub-section (1) now opens "immunity from imposition or, as the case may be, waiver of penalty", and clause (b) speaks of penalty that "has been levied or, as the case may be, leviable" under the circumstances in s.270A(9). To 28 February 2026 s.270AA was a pre-emptive route only — once the penalty order was passed there was nothing left to apply for. From 1 March 2026 a penalty already levied can be waived on the same terms, which matters to anyone holding a penalty order and a demand he has not appealed. Against that, new sub-section (3A) says no immunity or waiver shall be granted where any proceedings have been initiated under Chapter XXII, so a prosecution already launched closes the route that s.270AA(1) otherwise keeps open against ss.276C and 276CC. And the relaxation travels into the new Act. Section 440 of the Income-tax Act 2025, substituted by the same Finance Act with effect from 1 April 2026 and re-headed "Waiver of penalty and immunity from prosecution", prices the same trade at additional income-tax of 100 per cent where the penalty was levied in the s.439(11)(a) to (f) circumstances and 120 per cent where it was levied under s.439(11)(g), and puts the Chapter XXII bar in its own sub-section (4).
Procedure and timing, and the two periods are not the same length. Your own window in s.270AA(2) is one month from the end of the month in which the order was received, and the substitution did not change it. The officer's window in s.270AA(4) was one month from the end of the month in which the application is received until Act No. 7 of 2025 substituted three months with effect from 1 April 2025, so on an application made on or after that date he has three, not one. He cannot reject the application without giving you an opportunity of being heard, and the order under s.270AA(4) is final. Under substituted sub-section (3) he acts after the period for filing an appeal under s.249(2)(b) has expired. On the old text the application was made in Form No. 68 under Rule 129; substituted sub-section (2) again says "in such form and verified in such manner, as may be prescribed", and I could not confirm whether Form 68 has been re-notified to carry the new clause (b) payment — check the form before filing.
What you give up. Where an order accepting the application has been made, no appeal under s.246A and no application for revision under s.264 is admissible against that order of assessment or reassessment. You have bought certainty by surrendering the merits of the addition for that year.
What protects you if it fails. Section 249 excludes, in computing the 30 days to appeal, the period during which a s.270AA application was pending. So a rejection does not automatically cost you the appeal. CBDT Circular No. 5/2018 dated 16 August 2018 also clarifies that seeking immunity does not preclude contesting the same issue for earlier years where penalty is under s.271(1)(c).
When it is the right move. When the addition is small relative to the 50% penalty and the litigation cost, when the facts are against you but the conduct is not fraudulent, when the same issue is not recurring across years, and when you can fund the tax and interest inside the demand-notice window. It is the wrong move when the issue repeats in later years, or when the addition is one you would win on appeal.
The window is short and unforgiving — one month from the end of the month of receipt, and the tax must already be paid within the demand-notice period. Miss either and the only route left is a full penalty defence under s.270A. Reading the limb still decides what the application costs. To 28 February 2026, applying without noticing that the notice alleged misreporting meant paying the tax, giving up the appeal, and still facing 200%. From 1 March 2026 the application is competent on a misreporting charge, but only if the additional income-tax of one hundred per cent goes in within the demand-notice period as well; an application that does not carry that payment fails s.270AA(1)(b) and leaves you exactly where the old bar left you.
The assessment order charges interest under s.215 (or s.217, or s.139(8)). Can I appeal against the interest, and if not, how do I get it reduced?
How wide are the first appellate authority's powers when it disposes of an appeal?
Is payment of admitted tax under s.249(4) a condition that must be satisfied again when the appeal goes on to the Tribunal?
The provision can be read two ways. Which reading wins?
Your appeal is late. How strictly will 'sufficient cause' be read?
The Commissioner dismissed my revision and the officer will not issue a demand notice so I cannot appeal. Is the revisional order beyond the reach of a writ because it is administrative?
My assessment was reduced in appeal after the officer had already sent a recovery certificate to the Collector and my property was attached. Can he carry on with the old certificate?
The Tribunal cancelled my concealment penalty. Can the 276C prosecution still continue?
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