SPUNWELL SYNTEX PRIVATE LTD, vs. INCOME TAX OFFICER, DELHI

Through the instant writ petition, the petitioner challenges the impugned order (Annexure 8), which dismissed the petitioner's request for immunity from penalties arising from the (Uploaded on 31/08/2026 at 11:25:23 AM) (Downloaded on 28/10/2026 at 12:44:37 AM)

The factual matrix is that the petitioner filed its return (Annexure 1) for the Assessment Year 2018-19 and vide Assessment Order dated 24.2.2021 (Annexure 2), the petitioner's claim for deductions under Section 80 of the Act was disallowed. Instead of opting for an appeal, the petitioner deposited the assessed demand and the Assessing Officer issued a notice for penalty under Section 274 read with Section 270A of the Act (Annexure-3). The petitioner filed his response (Annexure 5) and sought immunity under Section 270AA of the Act by duly complying with Form 68. 3. By means of the impugned order dated 13.01.2022 (Annexure-8), the petitioner's prayer for immunity from the imposition of penalty under Section 270A was rejected and an order dated 03.02.2022 (Annexure-10) imposing a penalty was passed.

The learned petitioner's counsel submits that the show-cause notice and the impugned order (Annexure 8) lack specific reasons for the alleged misreported income and without providing an opportunity for personal hearing, as mandated under Section 270AA(4), are thus legally infirm. In support of his submissions, he has placed reliance upon the following judgments: (i) G.R. Infraprojects Ltd. v. Assistant Commissioner of Income-tax, [2024] 158 taxmann.com 80 (Rajasthan) (Uploaded on 31/08/2026 at 11:25:23 AM) (Downloaded on 28/10/2026 at 12:44:37 AM)

Furthermore, the counsel contends that the impugned order was issued beyond the statutory timeline prescribed in Section 270AA(4) of the Act, which stipulates one month.

Per contra, the learned counsel for the respondents defends the impugned order, asserting that under Sub-section (9) of Section 270A of the Act, immunity is not permissible and the Act also prohibits the Assessing Officer (AO) from initiating proceedings concerning an immunity application for “under- reporting of income in consequence of misreporting thereof.” Immunity is only available for “under-reporting of income.” The learned counsel refers to Section 277AA of the Act.

The respondents’ counsel further explains that the delay in issuing the order was due to the COVID-19 pandemic and pursuant to Board Notification No. SO 3814(E) dated 17.9.2021, such delay was condoned.

Before examining the core issues, it is essential to refer to the relevant provisions of the Act concerning immunity, specifically Sections 270A and 270AA, which are reproduced as follows: 270A. Penalty for under-reporting and misreporting of income: (Uploaded on 31/08/2026 at 11:25:23 AM) (Downloaded on 28/10/2026 at 12:44:37 AM)

Section 270AA of the Income Tax Act, 1961, clearly clarifies issues related to immunity from penalties. Under Section 270(1), taxpayers can seek immunity if their case falls under Section 270A, 276C, or 276CC. Consequently, Section 270AA is specifically intended for filing applications for immunity in these cases. The exemption outlined in section 270AA(3) completely bars the petitioner from seeking immunity for misreporting income, as specified under Section 277A(9) of the Act. (Uploaded on 31/08/2026 at 11:25:23 AM) (Downloaded on 28/10/2026 at 12:44:37 AM)

Section 270A addresses cases involving under-reported income. Thus, cases involving misreporting of income fall outside the scope of Section 270AA, as confirmed upon examining the applicable provisions.

In the present case, the penalty was imposed for 'under- reporting due to misreporting,' aligned with subsection (9) of Section 270A.

A show-cause notice issued to the petitioner indicates that, although a specific subcategory of Section 270A(9) was not explicitly mentioned, it refers to the petitioner's case as falling under “under-reporting consequences of misreporting.”

The Assessing Officer, upon reviewing the provisions of Section 270AA, concluded that the petitioner's case does not fall within the clause of under-reporting but rather falls under under- reporting of income resulting from misreporting, which, as per subsection (9) of Section 270A, excludes it from the immunity clause. The absence of explicit mention of the sub-category in the notice does not, by itself, constitute arbitrariness or violate principles of natural justice. Although the assessment order and penalty proceedings are separate, the petitioner was aware before the initiation of penalty proceedings that the assessing officer explicitly indicated in the assessment order that the petitioner failed to produce accounting records for income derived from its solar plant unit, thereby bringing it within the scope of “under- reporting in consequence of misreporting.”

The second ground raised by the petitioner that the respondents did not adhere to the one-month timeline stipulated in Section 270(4) of the Act, is also unfounded. Statutory (Uploaded on 31/08/2026 at 11:25:23 AM) (Downloaded on 28/10/2026 at 12:44:37 AM)

Accordingly, we are not persuaded that the show-cause notice and the impugned order are fraught with illegality warranting judicial quashing.

In view of the foregoing discussion, we find no substance in the instant writ petition. The same is, accordingly, dismissed.

All pending applications stand disposed of. (PRAVEER BHATNAGAR),J (DR.PUSHPENDRA SINGH BHATI),J