TaxTMI 
TaxTMI 
2026 (10) TMI 686
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.... that she had inadvertently made certain erroneous claims for deduction under Chapter VI-A of the Act. The Petitioner, on realising the error, re-computed her income for the year, filed a revised computation of income and voluntarily paid a sum of Rs. 2,67,500 being the tax and interest that was payable on account of the aforesaid error vide challan dated 22nd September 2025. b. Respondent No. 2, after noting that the Petitioner had paid the additional tax and interest, completed the assessment and passed the Assessment Order dated 25th November 2025, accepting the revised total income determined by the Petitioner. However, Respondent No. 2 initiated penalty under Section 270A of the Act for under-reporting of income which is in consequence of misreporting and issued a notice dated 25th November 2025 under Section 274 read with Section 270A of the Act asking the Petitioner to show cause as to why an order imposing penalty under Section 270A of the Act should not be passed. c. The Petitioner made an application under Section 270AA(2) of the Act in Form No. 68 on 23rd December 2025 seeking immunity from imposition of penalty under Section 270A of the Act. d....
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....prior to its amendment and wrongly rejected the Petitioner's application for waiver of penalty on the basis that penalty was levied on account of misreporting of income. He further submitted that all the three conditions specified in sub-section (1) of Section 270AA of the Act (as amended) were satisfied by the Petitioner and, once that was the case, the AO was bound to grant waiver of penalty as per the clear language of Section 270AA(3) of the Act. Mr. Mistri further contended that the second application for waiver of penalty was filed by the Petitioner in light of the amendments made by the Finance Act, 2026 which gave rise to a new and different cause of action, and could not be rejected simply on the basis that the first application was rejected, on the basis of the pre-amended provision existing at the time when the statute did not permit filing of waiver application in cases of misreporting of income. 7. On the other hand, Ms. Omle, learned Advocate who appeared on behalf of the Respondents, referred to the order dated 1st January 2026 passed by the AO and contended that the AO had correctly rejected the first waiver application and denied immunity to the Petitioner. Ms. ....
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....ay be, waiver of penalty under Section 270A and immunity from initiation of proceedings under Section 276C or Section 276CC, if he fulfils the following conditions, namely:- (a) the tax and interest payable as per the order of assessment under sub-section (3) of Section 143 or reassessment under Section 147 has been paid within the period specified in the notice of demand; (b) where penalty has been levied or, as the case may be, leviable under the circumstances referred to in sub-section (9) of Section 270A, additional income-tax amounting to one hundred per cent of the amount of tax payable on under-reported income has been paid within the period specified in the notice of demand, in lieu of such penalty; and (c) no appeal has been filed against the order referred to in Clauses (a) and (b). (2) An application referred to in sub-section (1) shall be made within one month from the end of the month in which the order referred to in Clause (a) and Clause (b) of the said sub-section has been received by the assessee, in such form and verified in such manner, as may be prescribed. (3) The Assessing Officer shall, on fulfilment of the conditions specifie....
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....already availed the remedy under Section 270AA of the Act by filing an earlier application on 23rd December 2025 and, therefore, the second application filed on 22nd July 2026 could not be accepted. As can be seen from the provisions of Section 270AA(2) of the Act as were applicable prior to the amendment made by Finance Act, 2026, an application for waiver of penalty could be made within one month from the end of the month in which the order of assessment or reassessment was received by the Assessee. 12. Post amendment by the Finance Act, 2026, we note that Section 270AA(2) of the Act permits a waiver application to be made within one month from the end of the month in which the order referred to in Clause (a) of Section 270AA(1) of the Act [i.e. the order of assessment or reassessment], and the order referred to in Clause (b) of Section 270AA(1) of the Act [i.e. the penalty order], is received by the Assessee. 13. We hold that in view of the above amendment, a fresh cause of action has arisen in as much as, an application for waiver can now be filed within one month from the end of the month in which the penalty order is received by the Assessee which was not earlier possib....