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Scan for outdated or missing drivers - takes under a minuteDriver Scan →Repair Windows errors before they cause bigger problemsFix Now →Yes—under the amended Section 270AA of the Income-tax Act, 1961, a taxpayer may seek waiver of a penalty for under-reporting in consequence of misreporting. The Bombay High Court has also ruled that, on the facts before it, an earlier rejection under the former law did not prevent a fresh application after the amendment. This is not an automatic amnesty: statutory payment, filing and timing conditions still apply.
What the Bombay High Court decided
In Farah Khurshed Titina v. Income Tax Officer, Ward 22(1)(6), Mumbai & Ors., Writ Petition No. 4002 of 2026, a Division Bench of the Bombay High Court ruled on 5 October 2026 that amended Section 270AA allows an application for waiver of a penalty already imposed for under-reporting in consequence of misreporting. LiveLawBiz identifies the judges as B.P. Colabawalla and Farhan P. Dubash. LiveLawBiz’s report of the decision
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The court also accepted a fresh application in the circumstances reported, despite the taxpayer’s earlier application having been rejected under the former rules. The ruling interprets the amended provision; it does not establish that every misreporting penalty qualifies or that the waiver is automatic.
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According to contemporaneous reporting and practitioner commentary, the taxpayer’s first immunity application was rejected on 1 January 2026 because the penalty proceedings involved misreporting. A penalty of ₹4,72,442 was imposed on 29 June 2026. After the amendment took effect, she paid ₹2,36,221 in additional income-tax on 21 July and applied again the next day. The Assessing Officer rejected the second application on 23 July, reasoning that misreporting remained ineligible and a second application could not be made.
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The High Court quashed that rejection and directed the officer to waive the penalty and grant immunity from prosecution under Sections 276C and 276CC within four weeks of being notified of the order, as reported by LiveLawBiz and Sunil Maloo & Co. The primary judgment text was not available in those materials, and no appeal or stay status was verified.
What the 2026 amendment changed
The Finance Act, 2026 amended Section 270AA with effect from 1 March 2026, extending the immunity or waiver route to qualifying penalties for misreporting. The Finance Bill’s explanatory material describes a condition requiring payment of tax and interest under the relevant assessment or reassessment order, plus additional income-tax equal to 100% of the aggregate tax payable. That explanatory material is not a substitute for the final enacted statutory text; consult the applicable Act and rules before relying on a particular calculation or deadline. TaxGuru’s reproduction of the Finance Bill explanatory material
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Practitioner commentary describes additional statutory requirements, including an application within the prescribed period linked to receipt of the relevant orders, no appeal against those orders, payment within the demand period and no proceeding initiated under Chapter XXII. The precise conditions and how they apply depend on the enacted text, rules and the taxpayer’s orders. Sunil Maloo & Co.’s discussion of Section 270AA
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The reported basis for allowing a second application was that the amendment changed the legal position and supplied a new timing trigger. Practitioner commentary attributes to the judgment the conclusion that a fresh cause of action arose, allowing an application within one month from the end of the month in which the penalty order was received. The court’s reported ruling therefore concerns an application made after the new law took effect and after a penalty order—not a general right to reopen every previously rejected claim.
The case’s specific sequence matters: the earlier application was rejected before the amendment, while the penalty order and renewed application came after the amendment’s 1 March 2026 effective date. The decision does not settle whether the amended route applies to penalty orders or other circumstances predating that date.
Check these issues before considering an application
- Which law and tax year apply? Establish whether the matter is governed by the Income-tax Act, 1961 or another applicable enactment, and identify the relevant assessment year.
- Is the order within Section 270AA’s scope? Confirm that the assessment or reassessment and penalty fall within the statutory route. Practitioner commentary notes that certain unexplained-income cases do not fall within the Section 270A/270AA route under the 1961 Act.
- What orders have been issued and received? Distinguish a penalty that has been imposed from one that is only leviable, and determine the receipt dates that control the applicable deadline.
- Have the required amounts been paid on time? Check tax, interest and any additional income-tax requirement against the order and statutory payment period. The Finance Bill explanatory material describes the additional amount as 100% of aggregate tax payable, but the final enacted wording governs.
- Has an appeal been filed? Commentary identifies the absence of an appeal against relevant orders as a condition to examine.
- Has a Chapter XXII proceeding begun? Determine whether a prosecution-related proceeding has been initiated and how the statutory bar applies to the individual case.
These are not interchangeable checklist items: eligibility depends on the statute’s combined conditions and the taxpayer’s documents. The case report is not a substitute for applying the enacted wording to those facts.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What remains unresolved
The reported decision involved a penalty order issued after the amendment took effect. Practitioner commentary says the court did not decide the amendment’s temporal reach for earlier assessment years, even though the Finance Bill memorandum reportedly discusses assessment year 2026–27 or earlier years. Whether the amended route reaches other pre-amendment situations remains unresolved on the materials available here.
Commentary also raises interpretive questions about the timing language and how the conditions interact with the bar where a Chapter XXII proceeding has begun. These are open questions, not holdings established by this case. As the judgment text was not retrieved, reported quotations and detailed procedural characterizations should be checked against the primary order before being relied on in a filing.
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