The Cuttack Bench of Income Tax Appellate Tribunal (ITAT) dismissed the appeal of the appellant-assessee, who had sought immunity from penalty under Section 270AA of Income Tax Act,1961,without filing the application in the prescribed format.

Sri Ganesh Chit Fund,appellant-assessee,through the authorised representative, submitted that the assessment was completed under Section 143(3), and disallowance was made on salary and interest paid to partners. The assessee paid the tax demand of ₹3,06,290 including interest on 03.01.2020, within 30 days of the assessment order dated 16.12.2019.

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A letter was also filed on 14.01.2020 requesting the Assessing Officer(AO) to drop the penalty proceedings under Section 270A. However, the AO levied the penalty, and the Commissioner of Income Tax (Appeals) [CIT(A)] confirmed it. The assessee argued that immunity under Section 270AA should have been granted.

The department counsel said the assessee had not filed any application under Section 270AA and supported the penalty order passed by the AO and confirmed by the CIT(A).

The two member bench comprising George Mathan (Judicial Member) and Rajesh Kumar ( Accountant Member) noted that under Section 270AA(1), an assessee could seek immunity from penalty under Section 270A by filing an application in the prescribed form, provided no appeal was filed against the assessment order. Section 270AA(2) further required that such application be made within one month from the end of the month in which the assessment order was received.

In this case, the assessee did not file the required application in the prescribed format. Instead, a letter was submitted stating that the tax and interest had been paid, but it did not satisfy the prescribed conditions, nor did it mention whether an appeal had been filed. Although the assessee had paid the tax and had not filed an appeal, the tribunal held that the absence of a proper application meant the benefit of Section 270AA could not be granted.

The appellate tribunal thus upheld the CIT(A)'s order confirming the penalty under Section 270A.

Accordingly the appeal of the assessee was dismissed.

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