M/s. Sunrise Trading Co., a partnership firm engaged in wholesale trading of electronics, filed its return of income for A.Y. 2025-26 declaring a…

In the present case, M/s. Sunrise Trading Co.'s total income was determined as 42 lakhs under section 143 (1) (a), whereas the Assessing Officer, after making certain additions and disallowances, assessed the income at 58 lakhs. Thus, there is under-reported income of 16lakhs. As per section 270A, penalty is leviable for under-reporting of income at the rate of 50% of the tax payable on such under-reported income. Tax payable on under-reported income = (₹ 16,00,000 x 30%) + HEC @4% = 4,99,200 Hence, penalty u/s 270A would be 50% of 4,99,200 = 2,49,600 M/s Sunrise Trading Co. can make an application to the Assessing Officer for grant of immunity from imposition of penalty under section 270A, if it - (i) pays the tax and interest payable as per the order of assessment under section 143 (3) , within the period specified in such notice of demand; and (ii) does not prefer an appeal against such assessment order. Such application can be made within one month from the end of the month in which the order of assessment is received.