CBDT Clarification on Immunity provided to Assessee u/s 270AA of Income-tax

CBDT Clarification on Immunity provided to Assessee u/s 270AA of Income-tax

The CBDT has issued Clarification Circular in respect of Immunity provided to an Assessee u/s 270AA of Income-tax Act, 1961 stating that grant of immunity by AO from penalty, etc. proceedings for any assessment year shall not preclude such assessee from contesting the same issue in any earlier assessment year.

CBDT Clarification on Immunity provided to Assessee u/s 270AA of Income-tax : Circular 5/2018 dt. 16 Aug. 2018 

1. Section 270AA of the Income-tax Act, 1961 (the Act) inter alia provides that w.e.f. 1st April, 2017, the Assessing Officer, on an application made by an assessee, may grant immunity from imposition of penalty under section 270A (not being penalty for misreporting) and initiation of proceedings under section 276C or section 276CC, subject to the conditions specified therein.

2. Apprehensions have been raised that where an assessee makes an application seeking immunity under section 270AA of the Act, and in the earlier year(s) penalty under section 271(1)(c) of the Act has been initiated on the same issue, the Income-tax Authority may contend that the assessee has acquiesced on the issue in such earlier year(s), by seeking immunity under section 270AA of the Act and therefore, take an adverse view in the proceedings for penalty under section 271(1)(c) of the Act.

3. In this matter, it is hereby clarified that where an assessee makes an application seeking immunity under section 270AA of the Act, it shall not preclude such assessee from contesting the same issue in any earlier assessment year. Further, the Income-tax Authority, shall not take an adverse view in the proceedings for penalty under section 271(1)(c) of the Act in earlier assessment years merely on the ground that the assessee has acquiesced on the issue in any later assessment year by preferring an immunity on such issue under section 270AA of the Act.

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