Immunity from penalty under Section 270AA requires fair hearing before rejecting relief on alleged misreporting.

Rejection of immunity from penalty under Section 270AA was set aside because the application had been declined on the premise of misreporting without considering the assessee's explanation or the stated technical difficulty in seeking adjournment. The Court held that the facts leading to the addition had been disclosed and that the application required fresh consideration after giving the petitioner an opportunity of hearing. The matter was remanded to the Assessing Officer to decide the immunity application afresh in accordance with law.

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Issues: Whether the order rejecting the application for immunity from penalty under Section 270AA of the Income-tax Act, 1961 was liable to be set aside and the matter remanded for fresh consideration.

Analysis: The application for immunity was rejected on the premise that the case involved under-reporting of income by reason of misreporting. The facts leading to the addition had been disclosed by the assessee, and the order was passed without considering the petitioner's explanation, including the plea that an adjournment could not be sought due to technical difficulty. In these circumstances, the matter required reconsideration after granting an opportunity of hearing.

Conclusion: The impugned order was set aside and the matter was remanded to the Assessing Officer to decide the application afresh in accordance with law after affording an opportunity of hearing to the petitioner.

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