Finance Bill, 2025 Penalty and Prosecution VisaVis Finance Bill, 2025

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The Tax Publishers Income Tax--Finance Bill, 2025 Penalty and Prosecution Vis-a-Vis Finance Bill, 2025 CA. (Dr.) Nisha Bhandari The Finance Bill, 2025 has proposed certain amendments in provisions relating to penalty and prosecution. The present write up analyses all these proposed amendments. 1. Processing period of application seeking immunity from penalty and prosecution proceedings extended from one month to three months Section 270AA of the Act provides, inter alia, procedure of granting immunity by the assessing officer from imposition of penalty or prosecution, subject to fulfillment of certain conditions as mentioned therein. Sub-section (2) of the said section provides that an application for granting immunity from imposition of penalty shall be made within one month from the end of the month in which the order referred to in clause (a) of sub-section (1) of the said section has been received by the assessee. Sub-section (4) of the said section provides that assessing officer shall pass an order accepting or rejecting the application, within a period of one month from the end of the month in which the application requesting immunity is received. Inputs have been received from the stakeholders that tax-payers are facing challenges to represent their case within this limited period and therefore the period for processing their applications may be increased. In view of the same, the Finance Bill, 2025 has proposed to amend the sub-section (4) of section 270AA w.e.f. 1-4-2025 so as to extend the processing period to three months from the end of the month in which application for immunity is received by the assessing officer. 2. Penalty under section 271AAB in search cases removed for being not relevant w.e.f. 1-9-2024 The existing provisions of sub-section (1A) of section 271AAB of the Act relates to penalty in respect of searches initiated after 15-12-2016. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Income Tax--Finance Bill, 2025

Penalty and Prosecution Vis-a-Vis Finance Bill, 2025

CA. (Dr.) Nisha Bhandari

The Finance Bill, 2025 has proposed certain amendments in provisions relating to penalty and prosecution. The present write up analyses all these proposed amendments.

1. Processing period of application seeking immunity from penalty and prosecution proceedings extended from one month to three months

Section 270AA of the Act provides, inter alia, procedure of granting immunity by the assessing officer from imposition of penalty or prosecution, subject to fulfillment of certain conditions as mentioned therein. Sub-section (2) of the said section provides that an application for granting immunity from imposition of penalty shall be made within one month from the end of the month in which the order referred to in clause (a) of sub-section (1) of the said section has been received by the assessee. Sub-section (4) of the said section provides that assessing officer shall pass an order accepting or rejecting the application, within a period of one month from the end of the month in which the application requesting immunity is received.

Inputs have been received from the stakeholders that tax-payers are facing challenges to represent their case within this limited period and therefore the period for processing their applications may be increased.

In view of the same, the Finance Bill, 2025 has proposed to amend the sub-section (4) of section 270AA w.e.f. 1-4-2025 so as to extend the processing period to three months from the end of the month in which application for immunity is received by the assessing officer.

2. Penalty under section 271AAB in search cases removed for being not relevant w.e.f. 1-9-2024

The existing provisions of sub-section (1A) of section 271AAB of the Act relates to penalty in respect of searches initiated after 15-12-2016.