Section 270AA

Section 270AA — the law in short

What the courts have decided on section 270AA, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• GE Capital US Holdings Inc v DCIT High CourtHelps taxpayer
  The officer refused immunity under s.270AA saying the penalty was for misreporting. Must he show which clause of s.270A(9) applies?
  Yes. The Delhi High Court held that once the assessee complies with clauses (a) and (b) of s.270AA(1) - paying the tax and interest and not appealing - the officer must reach a firm conclusion that the case falls in the category of misreporting, because that alone warrants rejection of the immunity application. Here neither the assessment orders nor the show cause notices contained any finding answering any of the six clauses of s.270A(9); the notices alleged 'under-reporting/misreporting' in the alternative and invoked both s.270A(2) and s.270A(9), which made them vague. The Court quashed both the rejection orders and the show cause notices. It also held that a legal position taken on the strength of a binding High Court decision, later vindicated by the Supreme Court, is not misreporting.
• Chambal Fertilizers and Chemicals Ltd v PCIT, Udaipur High CourtHelps taxpayer
  Can the officer reject a s.270AA immunity application without a hearing and without saying which clause of s.270A(9) applies?
  No. The Rajasthan High Court held that the Deputy Commissioner had violated the proviso to s.270AA(4) by giving no opportunity of hearing, that his order was wholly laconic and did not indicate under which part of s.270A(9) the case was said to fall, and that the revisional authority had, without cogent reasons, cursorily placed the case within clauses (a) and (c). On the facts the amount had not been detected by the department at all - it was disclosed voluntarily during scrutiny after ten other issues had been raised without any addition - so clauses (a) and (c) were not attracted. The Court quashed both orders and directed that immunity under s.270AA be granted.
• G R Infraprojects Limited v ACIT High CourtHelps taxpayer
  I withdrew my education cess claim after the Finance Act 2022 inserted section 155(18). Can the officer still treat it as under-reported income and levy penalty?
  The Rajasthan High Court set the penalty aside and directed that immunity under s.270AA be granted. Where the company withdrew its cess claim by letter dated 19 March 2022, before s.155(18) came into force on 1 April 2022, and accepted the proposed variation, it was entitled to immunity from penalty under s.270A, and the initiation was in any event non est because the officer never specified which limb of s.270A(9) was attracted.
• Prem Brothers Infrastructure LLP v National Faceless Assessment Centre High CourtHelps taxpayer
  The Assessing Officer raised my own section 14A disallowance and then called it misreporting, so he refused me immunity under section 270AA and levied penalty under section 270A. Can he do that?
  No. The Delhi High Court quashed the penalty order and directed the Assessing Officer to grant immunity under section 270AA. The only addition was a recomputation of a section 14A disallowance the assessee had itself estimated and disclosed. Both sides worked from the same details and reached different figures; the Court said that by no stretch of imagination can that be called misreporting. It also found that the penalty order did not say which limb of section 270A was attracted or how sub-section (9) was satisfied, and that the bare use of the word misreporting made the order manifestly arbitrary.
• Schneider Electric South East Asia (HQ) Pte Ltd v ACIT High CourtHelps taxpayerNo later treatment found
  Immunity under s.270AA was refused because the officer called it 'misreporting'. Can they do that with one word?
  No. Denying immunity on a bare label of misreporting, without identifying which limb of s.270A or which sub-clause of s.270A(9) is attracted, was held manifestly arbitrary. The Court directed that immunity be granted.
• Mayur Bhararbhai Popat v ITO ITATHelps departmentNo later treatment found
  I applied for immunity under s.270AA after paying the tax on the s.80GGC disallowance. The Assessing Officer refused it because he had charged misreporting. Was he entitled to?
  Yes, on the law as it stood for AY 2019-20 and down to 28 February 2026. Section 270AA(3) then granted immunity only where penalty proceedings under s.270A had NOT been initiated in the circumstances in s.270A(9), so once the Assessing Officer invoked s.270A(9) the statute itself excluded immunity and the 200 per cent penalty under s.270A(8) followed. That bar no longer exists: clause 21 of the Finance Act 2026 substituted s.270AA(1) to (3) with effect from 1 March 2026, and immunity, or waiver of a penalty already levied, is now available on a s.270A(9) charge on payment of additional income-tax of one hundred per cent of the tax on the under-reported income, in lieu of the penalty. A second qualification belongs to the old law and still governs any year decided on it: where the invocation of s.270A(9) is a bare label with no clause identified and no reasoning on its ingredients, the Delhi High Court in Prem Brothers Infrastructure LLP v NFAC (W.P.(C) 7092/2022, 31 May 2022) quashed the penalty and directed immunity to be granted — so the battleground is the quality of the initiation, not the availability of s.270AA in the abstract.
• Niket Maheshbhai Shah v ITO ITATHelps taxpayerNo later treatment found
  I gave up the fight on the s.80GGC disallowance and paid the tax. Now there is a 200 per cent penalty under s.270A for misreporting. Can I still resist the penalty?
  Yes. The Tribunal quashed the penalty outright. Claiming a deduction the assessee genuinely believed was available is not under-reporting or misreporting, and where the penalty order does not say which limb of s.270A(9) is attracted or how its ingredients are satisfied, the order is arbitrary and cannot stand.
• Statutory position — section 249: the fee, the thirty days, condonation, and the section 249(4) bar that must be cleared before the appeal is admitted CBDT Circulars & InstructionsCuts both ways
  I am filing a first appeal to the Commissioner (Appeals). What exactly must I have done before the appeal can even be admitted, and from what date do the thirty days run?
  Section 249(4) is a bar on admission, not a ground of dismissal on the merits: no appeal under Chapter XX shall be admitted unless, at the time of filing, the assessee has paid the tax due on the income returned (clause (a)) or, where no return was filed, an amount equal to the advance tax that was payable (clause (b)). Only clause (b) can be relaxed — on an application by the appellant, the Joint Commissioner (Appeals) or Commissioner (Appeals) may for any good and sufficient reason recorded in writing exempt him from clause (b); there is no such escape from clause (a). The appeal itself must be presented within thirty days of the date of service of the notice of demand (or, in the other cases, of intimation of the order appealed against), and s.249(3) lets the appellate authority admit a late appeal on sufficient cause.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.