Assessee-company filed its return of income claiming deduction in respect of education cess. Subsequently, assessee withdrew its claim for deduction of education cess. Assessing Officer however made addition on account of disallowance of deduction of education cess and initiated penalty proceedings under section 270A for misreporting of income. Assessee filed an application under section 270AA seeking immunity from imposition of penalty under section 270A. Assessing Officer passed a penalty order under section 270A. Since assessee had withdrawn its claim for deduction of education cess in view of insertion of sub-section (18) of section 155 before it came into force with effect from 1-4-2022, assessee would be entitled for immunity from imposition of penalty under section 270A though proceedings against it were initiated for imposition of penalty. On writ the Court held that since application filed by assessee under section 270AA seeking immunity from imposition of penalty had not been decided by Assessing Officer within prescribed time, impugned penalty order as well as demand notice issued under section 156 were to be set aside. (AY. 2020-21)