Query on 270AA of IT Act--Immunity from Imposition of Penalty

This query is : Resolved

Ankit Tantia (Querist)
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13 August 2024 Dear All,

The Assessment Unit of the Income Tax Department made an assessment for the Assessment Year 2018-19 under section 147 read with section 144B on 14.02.2024 and a Demand of Rs 1,62,256 is raised. The demand is raised without giving credit of the self assessment tax paid on 07.04.2023 at the time of Filing Return of Income U/s 148 i.e. Rs. 60,917.

Rectification petition for credit of Rs. 60,917 has been filed with the Jurisdictional Assessing Officer and is pending for processing.

Balance Demand Rs. 1,01,339 (1,62,256 – 60,917) paid within 30 days of demand raised. Now, I am unable to file the application U/s 270AA (Form 68- Immunity from Imposition of Penalty).

In Point 8 of Form 68--- “Details of amounts paid”, since the date of amount paid as self assessment tax at the time of Filing Return of Income U/s 148 is before the date of service of order so an error message is displayed as “Error: Please enter valid date of deposit and it cannot be before date of service of order”

What course of action should one take in such a case so that the Form 68 is successfully filed for grant of Immunity from Imposition of Penalty?

One of the options I feel is to wait for the processing of rectification filed with the Jurisdictional Assessing Officer so that the demand gets reduced and the credit of Self Assessment Tax is given.

What are the other options available?

Please suggest.

Asha Kanta Sharma online

Asha Kanta Sharma online

(Expert)
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13 August 2025 Background & Issue:
You paid Self-Assessment Tax (SAT) ₹60,917 on 07.04.2023 (before assessment order dated 14.02.2024).
The assessment order raised demand ₹1,62,256 without adjusting SAT paid.
You filed a rectification request for credit of SAT—pending.
You paid the balance demand ₹1,01,339 within 30 days of order.
When filing Form 68 (Immunity from Penalty under Sec 270AA), the portal rejects the SAT payment date because it is before the date of service of the assessment order.
Why is this happening?
The Form 68 online system expects all payments shown in the form to be made on or after the date of assessment order (date of service of demand).
Self-Assessment Tax paid before the assessment order is not accepted as part of "amounts paid" for penalty immunity in this form because that payment is related to the original return and not the demand.
What can you do?
Option 1: Wait for Rectification Order
Once the rectification is processed, your demand will reduce to ₹1,01,339.
Then you can file Form 68 showing only the payment of ₹1,01,339 (which was paid after demand).
This is the cleanest option but depends on how fast the rectification is processed.
Option 2: File Form 68 Showing Only Payment After Demand
You can file Form 68 only for the ₹1,01,339 paid after demand on the date it was paid.
Do not include the self-assessment tax payment date which is before the assessment order.
You may upload proof for this amount paid.
Option 3: Contact CPC or Jurisdictional AO for Manual Intervention
Since this is a system limitation, you can request the AO or CPC to manually grant immunity considering SAT paid before assessment.
Submit a letter explaining the issue with proof of payment of SAT and balance amount.
This is a slower process but sometimes necessary.
Additional Notes:
Section 270AA states penalty immunity applies on payment of tax and interest due within 30 days of demand.
The SAT paid before demand is not considered payment against the demand, hence not accepted by system.
The key for Form 68 is to match the demand raised and payments made after that demand.
Summary Recommendation:
Best practice: Wait for rectification so that demand reduces and then file Form 68.
Meanwhile, file Form 68 for balance payment only (₹1,01,339), without mentioning the SAT payment date before demand.
If portal rejects or creates confusion, write to AO or CPC explaining the issue.

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