Section 270AA of Income Tax Act 1961: Immunity from Penalty and Prosecution
Section 270AA provides a statutory route for an assessee to seek immunity from imposition or waiver of penalty under section 270A and immunity from initiation of proceedings under sections 276C or 276CC, subject to the conditions prescribed by the Income-tax Act, 1961.
Meaning and scope of Section 270AA
Section 270AA is contained in Chapter XXI of the Income-tax Act, 1961. It enables an eligible assessee to apply to the Assessing Officer for protection against specified penalty and prosecution consequences after an assessment under section 143(3) or a reassessment under section 147.
The provision should be read together with section 270A, which deals with penalty for under-reporting and misreporting of income, and the prosecution provisions in sections 276C and 276CC. The current text also addresses cases falling within section 270A(9), subject to payment of the additional income-tax specified in section 270AA.
Conditions for immunity under Section 270AA
- The tax and interest payable under the assessment order under section 143(3) or reassessment order under section 147 must be paid within the period specified in the notice of demand.
- Where penalty has been levied or is leviable in circumstances referred to in section 270A(9), additional income-tax equal to 100 percent of the tax payable on the under-reported income must be paid within the period specified in the notice of demand, in lieu of such penalty.
- No appeal must have been filed against the relevant order referred to in section 270AA(1).
- The application must be filed within the statutory time limit and in the prescribed form and manner.
Time limit for filing the application
Under section 270AA(2), the application is required to be made within one month from the end of the month in which the order referred to in section 270AA(1)(a) and, where applicable, clause (b) is received by the assessee. The application must be made in the prescribed form and verified in the prescribed manner.
When the Assessing Officer grants immunity
On fulfilment of the conditions in section 270AA(1), and after expiry of the applicable period for filing an appeal referred to in section 249(2)(b), the Assessing Officer is required under section 270AA(3) to grant immunity from imposition or waiver of penalty under section 270A and immunity from initiation of proceedings under section 276C or section 276CC.
Section 270AA(3A), effective from 1 March 2026, provides that immunity or waiver under sub-section (3) shall not be granted where proceedings have been initiated under Chapter XXII of the Income-tax Act.
Time limit for the Assessing Officer to decide the application
Under section 270AA(4), the Assessing Officer must pass an order accepting or rejecting the application within three months from the end of the month in which the application is received. The period was increased from one month to three months by the Finance Act, 2025 with effect from 1 April 2025.
An application cannot be rejected without giving the assessee an opportunity of being heard.
Effect of acceptance of the application
The order made under section 270AA(4) is final. Where the application is accepted, section 270AA(6) bars an appeal under section 246 or section 246A and an application for revision under section 264 against the assessment or reassessment order referred to in section 270AA(1)(a).
Section 270AA at a glance
| Requirement | Current rule |
|---|---|
| Eligible order | Assessment under section 143(3) or reassessment under section 147. |
| Tax and interest | Must be paid within the period specified in the notice of demand. |
| Section 270A(9) cases | Additional income-tax equal to 100 percent of tax payable on under-reported income is required, subject to the statutory conditions. |
| Appeal | No appeal should have been filed against the relevant order. |
| Application period | Within one month from the end of the month in which the relevant order is received. |
| AO decision period | Within three months from the end of the month in which the application is received. |
| Hearing before rejection | Mandatory opportunity of being heard. |
| Chapter XXII proceedings | No immunity or waiver under section 270AA(3) where proceedings have already been initiated under Chapter XXII. |
Current statutory text of Section 270AA
270AA. Immunity from imposition of penalty, etc.
(1) An assessee may make an application to the Assessing Officer to grant immunity from imposition or, as the case may be, waiver of penalty under section 270A and immunity from initiation of proceedings under section 276C or section 276CC, if the statutory conditions are fulfilled.
Clause (a): Tax and interest payable under the assessment under section 143(3) or reassessment under section 147 must be paid within the period specified in the notice of demand.
Clause (b): Where penalty has been levied or is leviable in circumstances referred to in section 270A(9), additional income-tax equal to 100 percent of the tax payable on under-reported income must be paid within the period specified in the notice of demand, in lieu of such penalty.
Clause (c): No appeal must have been filed against the order referred to in clauses (a) and (b).
(2) The application must be made within one month from the end of the month in which the relevant order is received, in the prescribed form and verified in the prescribed manner.
(3) On fulfilment of the statutory conditions and after expiry of the relevant appeal period, the Assessing Officer shall grant immunity from imposition or waiver of penalty under section 270A and immunity from initiation of proceedings under section 276C or section 276CC.
(3A) Immunity or waiver under sub-section (3) is not available where proceedings have been initiated under Chapter XXII.
(4) The Assessing Officer must accept or reject the application within three months from the end of the month in which it is received. No rejection can be made without giving the assessee an opportunity of being heard.
(5) The order under sub-section (4) is final.
(6) Where the application is accepted, no appeal under section 246 or section 246A or revision application under section 264 is admissible against the relevant assessment or reassessment order.
The above is a concise explanatory presentation of the current provision. For authoritative statutory language and amendments, refer to the official Income Tax Department resources linked below.
Official resources
- Income Tax Department - Section 270AA
- Finance Act, 2025
- Income Tax Department
- Income Tax e-Filing Portal