Immunity under Section 270AA upheld where tax and interest were paid and Form No.68 filed; penalty quashed.

Whether statutory immunity applies where the taxpayer paid assessed tax and interest, filed the prescribed Form No.68 within time and did not file an appeal: the tribunal applied the requirements of Section 270AA(1)-(4), finding the conditions for immunity satisfied and noting the Assessing Officer did not issue a speaking order rejecting the Form No.68 as required; the AO nevertheless levied a penalty under the misreporting provision without demonstrating applicability of the exclusion in Section 270A(9). Outcome: immunity upheld and the penalty quashed.

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Issues: Whether penalty under Section 270A of the Income-tax Act, 1961 can be sustained where the assessee, after assessment under Sections 143(3)/147, paid the tax and interest and filed Form No.68 under Section 270AA(2) seeking immunity, but the Assessing Officer levied penalty without passing an order rejecting the Form No.68.

Analysis: The Court examined whether the assessee had complied with the conditions prescribed under Section 270AA(1) and (2) of the Income-tax Act, 1961 - payment of tax and interest as per the assessment order within the stipulated time, filing the prescribed application in Form No.68 within time, and non-filing of any appeal against the assessment order. The record shows tax and interest were paid and Form No.68 was filed within time and not rejected by a speaking order as contemplated by Section 270AA(4). The Assessing Officer proceeded to levy penalty under Section 270A treating additions as misreporting without demonstrating how Section 270A(9) applied to deny immunity. The Court considered the coordinate bench decision applying the statutory mandate of Section 270AA and noted the absence of any distinguishing material or adverse finding by Revenue to justify denial of immunity.

Conclusion: The assessee satisfied the statutory conditions for immunity under Section 270AA and the Assessing Officer failed to pass a valid order rejecting the Form No.68; consequently, the penalty of Rs.5,86,574 levied under Section 270A is unsustainable and is quashed. The appeal is allowed in favour of the assessee.

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