The Delhi High Court has overturned an order that rejected an application made by an individual Assessee seeking immunity from penalty proceedings under Section 270AA. The Court found that the Assessee was not given an opportunity to be heard, as mandated by Section 270AA(4), before their application was dismissed. The Assessee had filed a return of income for the Assessment year 2020-21, declaring an income of Rs. 1,73,72,262/-. The Revenue subsequently passed an assessment order under Section 143(3), disallowing certain expenditure of Rs. 22.08 Lac and raising a demand of Rs. 9,37,329/-. Penalty proceedings were initiated, and the Assessee filed an application under Section 270AA(2) seeking immunity, which was dismissed due to a delay of 48 days in filing the application.
The High Court pointed out that the proviso to Section 270AA(4) clearly requires that the Assessee be given an opportunity to be heard before rejecting their application for immunity from penalty proceedings. It was undisputed that the Assessee was not given this opportunity, and therefore the order rejecting their application did not comply with the procedure prescribed in Section 270AA(4). The Court did not make any observations regarding the Assessee’s contention on the Revenue’s power to condone the delay, but suggested that the concerned officer consider these submissions in the first instance.
The Court set aside the order rejecting the Assessee’s application and remanded the matter back to the Revenue to consider the application afresh. The Assessee was directed to personally or through an authorized representative appear before the Revenue to avail the opportunity of being heard. The judgment was in favor of the Assessee.
In summary, the Delhi High Court overturned an order rejecting an Assessee’s application seeking immunity from penalty proceedings under Section 270AA, as the Assessee was not given an opportunity to be heard as required by Section 270AA(4). The Court remanded the matter back to the Revenue for consideration and directed the Assessee to appear before the Revenue to avail the opportunity of being heard.
[Rohit Kapur v. DCIT [TS-132-HC-2023(DEL)] – Date of Judgement : 14.03.2023 (Del.)]
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