| Question And Answer | |
|---|---|
| Subject: | whether the assessing officer has got power to not to levy penalty under section 270A in case of under reported income, if the tax payer has paid the tax within one month, |
| Category: | Income-Tax |
| Querist: | p.shankar |
| Answered by: | Law Intern |
| Tags: | S.270AA, Section 270A, Section 273A |
| Date: | April 1, 2026 |
the faceless assessing authority has rejected the claim of the assessee and levied tax stating there is under reported income and also issued a penalty notice under section 270A of Income tax act, 1961 for the assessment year 2024-2025.
Since tax levied is on underreporting of income, immunity under section 270AA of the income tax act is not applicable.
Whether the assessing officer can waive the penalty under section 273 of Income Tax Act.
if any case laws are there please specify
The AO has judicial discretion u/s 270A(1) not to levy penalty if he is satisfied that the circumstances are genuine. Immunity u/s 270AA is also available in genuine under-reporting cases provided procedural conditions are met.
The AO has no power to waive u/s 273A. However, the PCIT/CIT has power to waive or reduce penalty if the specified conditions are satisfied.
As regards case laws, please see the landmark case in Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 where the Supreme Court held that penalty cannot be imposed merely because it is lawful. The authority must consider all circumstances and refrain if the breach is technical, venial, or based on bona fide belief. This principle directly applies to the discretionary word “may” in Section 270A(1).