G R Infraprojects Limited v. Assistant Commissioner Of Income-Tax, Circle-2, Aaykarbhawan, Subcity Center, Savina, Udaipur Rajasthan

HIGH COURT OF JUDICATURE FOR RAJASTHAN ATJODHPUR D.B. Civil Writ Petition No. 5594/2023 G R Infraprojects Limited, Through Its General Manager ShriKuldeep Jain (Age 46 Years), Having Head Office At G R House,Hiran Magri, Sector-11, Udaipur (Rajasthan)- 313002. ----Petitioner Versus 1. Assistant Commissioner Of Income-Tax, Circle-2, AaykarBhawan, Subcity Center, Savina, Udaipur Rajasthan -313001.Bhawan, Subcity Center, Savina, Udaipur Rajasthan -313001. 2. Principal Chief Commissioner Of Income-Tax, Income-TaxDepartment, Ncr Building, Statue Circle, Jaipur(Rajasthan)- 302005.Department, Ncr Building, Statue Circle, Jaipur(Rajasthan)- 302005. 3. Central Board Of Direct Taxes, Through Chairperson,Type-7, Bungalow No. 75, New Moti Bagh, New Delhi -110021.Type-7, Bungalow No. 75, New Moti Bagh, New Delhi -110021. ----Respondents For Petitioner(s) : Mr. Vikas Balia, Sr. Advocate assisted by Mr. Prateek Gattani assisted by Mr. Prateek Gattani For Respondent(s): Mr. K. K. Bissa HON'BLE MR. JUSTICE VIJAY BISHNOI HON'BLE MR. JUSTICE MUNNURI LAXMAN Judgment 02/01/2024(Per Hon’ble Vijay Bishnoi, J.) 1. This writ petition is filed by the petitioner seeking followingreliefs:reliefs: "It is, therefore, most humbly prayed that this Hon'bleCourt may kindly be pleased to:- a. Issue writ in the nature of mandamus or any otherappropriate writ, order or direction for quashing and/orset-aside the Impugned Penalty Order dated31.03.2023 (Annexure-11) passed under Section 270Aof the Income-tax Act, 1961 by the Respondent No.1;b. Issue writ in the nature of mandamus or any otherappropriate writ, order or direction for quashing and/or set-aside consequential demand notice dated31.03.2023 (Annexure-11) issued under Section 156 ofthe Income-tax Act, 1961 by the Respondent No.1; c. To issue writ of mandamus and/or any otherappropriate writ to declare that disallowance ofdeduction in respect any surcharge of cess which is notallowable as deduction under Section 40 then in termsof Section 155(18) of the Act for the purpose of levy ofpenalty under Section 270A of the Act the same shallbe considered as under- reported income and thereforeimmunity from Imposition of penalty as envisagedunder Section 270AA of the Act shall not be denied if anassessee qualifies conditions as enumerated under subsection (1) and (2) of Section 270AA of the Act d. Allow the writ petition with costs; e. Grant any other relief as deemed to be fit and properunder the facts and circumstances of the case." 2. The facts, not in dispute, are that the petitioner is a publiclimited company and engaged in execution of turnkey infra-projects. The petitioner-company is regularly filing its income taxreturn as per applicable provisions of Income Tax Act, 1961(hereinafter referred as 'the Act'). 3. The petitioner-company filed return of income for the financialyear 2019-2020 i.e. assessment year 2020-21 on 13.02.2021. Ashow cause notice dated 29.06.2021 under Section 143(2) of theAct was issued to the petitioner-company. Subsequently, noticesunder Section 142 (1) of the Act were issued to the petitioner-company on 26.11.2021 and 26.02.2022 which were replied bythe petitioner-company vide notice dated 16.03.2022. Thepetitioner-company was asked to show cause why not its claim fordeduction of edcuation cess of Rs.12,85,58,982/- be disallowed and be added back to its income for the relevant financial yearand penaltyproceeding be initiated under Section 270-A of theAct. 3. The petitioner-company filed return of income for the financialyear 2019-2020 i.e. assessment year 2020-21 on 13.02.2021. Ashow cause notice dated 29.06.2021 under Section 143(2) of theAct was issued to the petitioner-company. Subsequently, noticesunder Section 142 (1) of the Act were issued to the petitioner-company on 26.11.2021 and 26.02.2022 which were replied bythe petitioner-company vide notice dated 16.03.2022. Thepetitioner-company was asked to show cause why not its claim fordeduction of edcuation cess of Rs.12,85,58,982/- be disallowed and be added back to its income for the relevant financial yearand penaltyproceeding be initiated under Section 270-A of theAct. 4. In response to the notice dated 16.03.2022, the petitioner-company vide reply dated 19.03.2022 has withdrawn its claim fordeduction of education cess and accepted the proposed variation.The Assessing Officer has passed the assessment order dated22.09.2022 whereby single addition in relation to deduction ofeducation cess of Rs.12,85,58,982/- is made and added it back tothe income of the petitioner-company and ordered for initiatingpenalty proceeding under Section 270A of the Act for misreportingby way of underreporting of income. Simultaneously, notice dated22.09.2022 is issued to the petitioner-company under Section 274read with Section 270A of the Act to show cause why penalty benot imposed on it. In response to the notice dated 22.09.2022,the petitioner-company filed its response vide reply dated18.10.2022 and also filed an application under Section 270AA ofthe Act seeking immunity from imposition of penalty under Section270A of the Act under prescribed form. Another show cause noticedated 06.02.2023 under Section 270A of the Act was issued bythe Assessing Officer for imposing penalty which is also replied bythe petitioner-company on 13.02.2023. Thereafter, again a showcause notice dated 30.03.2023 for imposing penalty under Section270A of the Act was issued and the petitioner-company was askedto file reply on or before 31.03.2023 at 5:00 PM. As per thepetitioner-company, reply to the same has been filed by it on31.03.2023 before 5:00 PM however, the respondent-department passed the penalty order dated 31.03.2023 under Section 270A ofthe income Tax Act and imposed a penalty of 200% of tax uponthe petitioner-company. Consequently, notice of demand dated31.03.2023 under Section 156 of Income Tax Act was issued tothe petitioner-company. Being aggrieved with the same, thepetitioner-company has filed this writ petition. 5. Reply to the writ petition has been filed on behalf of therespondents,whereinpreliminaryobjectionregardingmaintainability of the writ petition is raised on the ground ofavailability of alternative remedy of filing an appeal. Therespondent-department has also justified its action in passing theimpugned order dated 31.03.2023 and the impugned notice dated31.03.2023. 6. Learned counsel for the petitioner has submitted that thoughthe impugned order dated 31.03.2023 passed under Section 270Aof the Act is appelable under Section 246A of the Act but as theimpugned order has been passed in violation of principle of naturaljustice and in contravention of the statutory scheme of the Act,the petitioner-company has invoked the extraordinary powers ofthis Court under Article 226 of the Constitution of India. 7. It is argued that issue raised by the petitioner-company in thispetition is purely legal and does not require any investigation intothe facts, the writ petition filed by the petitioner-company underArticle 226 of the Constitution of India is maintainable. Learnedcounsel has placed reliance on a decision of Hon'ble SupremeCourt rendered in M/s Godrej Sara Lee Ltd. vs. The Excise and Taxation Officer-cum-Assessing Authority and Ors.,2023 SCC OnLine SC 95. 7. It is argued that issue raised by the petitioner-company in thispetition is purely legal and does not require any investigation intothe facts, the writ petition filed by the petitioner-company underArticle 226 of the Constitution of India is maintainable. Learnedcounsel has placed reliance on a decision of Hon'ble SupremeCourt rendered in M/s Godrej Sara Lee Ltd. vs. The Excise and Taxation Officer-cum-Assessing Authority and Ors.,2023 SCC OnLine SC 95. 8. On the other hand, learned counsel for the respondent-department has submitted that in view of the availability ofalternative and statutory remedy of appeal to the petitioner-company under Section 246A of the Act, the writ petition filed bythe petitioner-company is liable to be dismissed on the ground ofalternative remedy only. Learned counsel for the respondent-department has placed reliance on a decision of Division Bench ofthis Court rendered in Hindustan Zinc Limited vs. NationalFaceless Assessment Centre & Ors. (D.B.Civil Writ PetitionNo. 11772/2022) and one another connected writ petitiondecided on 22.09.2022. He has also placed reliance on a decisionof Single Bench of this Court dated 13.12.2021 rendered inVeetrag Buildcon Private Limited vs. Union of India andOrs. (S.B.Civil Writ Petition No.12283/2021). 9. On merits, learned counsel for the petitioner-company hassubmitted that while filing return for the financial year 2019-20,the petitioner-company claimed the benefit of deduction ofeducation cess, which was permissible during the relevant time offiling return of income in view of the judgment passed by thisCourt in Chambal Fertilisers and Chemical Ltd. vs. JCIT, Range 2, Kota(D.B. Income Tax Appeal No.52/2018),wherein the Division Bench of this Court has categorically heldthat cess is not tax. It is further submitted that the Bombay High Court in Sesa Goa Limited vs. JCIT (ITA No.17/2013) hasalso held that education cess is allowable expenditure/deduction. 10. It is contended that in the year 2022 vide Finance Act, 2022sub-section (18) has been inserted in Section 155 of the Act andthe said amendment came into force on 01.04.2022. As per thesaid amendment, it is provided that any deduction of anysurcharge or cess, which is not allowable as deduction underSection 40 of the Act has been claimed and allowed in the case ofan assessee in any previous year, such claim shall be deemed tobe under-reported income of the assessee for such previous yearunder sub-section (3) of Section 270A of the Act. It is furtherprovided that such claim of surcharge/cess shall not be consideredas under- reported in case the assessee makes an application tothe assessing officer in the prescribed form and within theprescribed time, requesting for recomputation of total income ofthe previous year without allowing the claim for deduction ofsurcharge/cess and pay the amount of tax due thereon withinspecified time. 11. Learned counsel has further argued that the benefit ofallowable deduction of education cess was claimed by thepetitioner-company when it was permitted as per law, however, assoon as the amendment under Section 155 of the Act wasintroduced by way of inserting sub-section (18), the petitioner-company immediately suo moto withdrew its claim for cessamounting to Rs. 12,85,58,982/- to buy mental peace and toavoid litigation and levy of penalty etc. vide letter dated 19.03.2022. In such circumstances, it cannot be said that thepetitioner-company has concealed any fact or misrepresented. Inthe above circumstances, it cannot be said that the petitioner-company has under-reported the income by way of misreporting. 11. Learned counsel has further argued that the benefit ofallowable deduction of education cess was claimed by thepetitioner-company when it was permitted as per law, however, assoon as the amendment under Section 155 of the Act wasintroduced by way of inserting sub-section (18), the petitioner-company immediately suo moto withdrew its claim for cessamounting to Rs. 12,85,58,982/- to buy mental peace and toavoid litigation and levy of penalty etc. vide letter dated 19.03.2022. In such circumstances, it cannot be said that thepetitioner-company has concealed any fact or misrepresented. Inthe above circumstances, it cannot be said that the petitioner-company has under-reported the income by way of misreporting. 12. It is further argued that penalty under Section 270A of the Actcan only be levied if an assesse misrepresent its income inconsequence of misreporting, which is categorized in sub-section(9) of Section 270A of the Act. It is contended that from theassessment order dated 22.09.2022 and further show-causenotices issued by Assessing Officer, it is no where reflected thatwhich part of sub-section (9) of Section 270A is attracted in thecase of petitioner-company, hence the action of respondents ofrejecting the application of petitioner-company seeking immunityfrom imposition of penalty under Section 270AA of the Act,holding that the petitioner-company is not fulfilling the conditionmentioned in the sub-section (3) of the Section 270AA of the Act,is arbitrary and illegal. 13. It is further submitted that as per the provisions of Section.270AA of the Act, an assessing officer is bound to decide theapplication filed by any assessee for granting immunity fromimposing penalty under Section 270A within specified time but inthe case of the petitioner, the said application has never beendecided within the prescribed time limit and straightway theimpugned order has been passed, whereby the said application forgranting immunity from imposing penalty has also been dismissedin illegal manner. 14. While relying on the decisions of Delhi High Court rendered inSchneider Electric South East Asia (HQ) Pte Ltd. vs. Asst.Commissioner of Income Tax International Taxation Circle3(1)(2), New Delhi & Ors. [2022] 443 ITR 186 (Delhi),Ultimate Infratech Private Limited vs. National FacelessAssessment Centre Delhi & Anr., 2022(4) ΤΜΙ 1086 - DELHIHIGH COURT and Rohit Kapur VS. Principal Commissioner ofIncome Tax-7, New Delhi & Anr., 2023(3) TMI 930 DELHIHIGH COURT, learned counsel for the petitioner-company hasprayed that the writ petition may be allowed and the reliefsclaimed in this writ petition may kindly be granted. 15. Per contra, learned counsel for the respondents countering thesubmissions of counsel for petitioner on merits has argued thatthe respondent-department has not committed any illegality inpassing the impugned order as the petitioner-company is noteligible for immunity from levying of penalty under Section 270AAof the Act. 16. Heard learned counsel for the rival parties. 17. So far as maintainability of this writ petition is concerned,having gone through the material available on record, we find thatin the present case, there is no requirement of making aninvestigation into facts and the question raised by the petitioner inthis writ petition is only this that whether the petitioner-companyis entitled to claim benefit of immunity from imposition of penaltyunder Section 270A of the Act or not. The Hon'ble Supreme Courtin M/s Godrej Sara Lee Ltd. vs. The Excise and Taxation Officer-cum-Assessing Authority and Ors. (supra) has heldthat where the controversy is purely legal one and does notinvolve disputed question of fact but only question of law, then itshould be decided by the High Court instead of dismissing the writpetition on the ground of alternative remedy. The relevant portion of the decision is reproduced hereunder: Officer-cum-Assessing Authority and Ors. (supra) has heldthat where the controversy is purely legal one and does notinvolve disputed question of fact but only question of law, then itshould be decided by the High Court instead of dismissing the writpetition on the ground of alternative remedy. The relevant portion of the decision is reproduced hereunder: "8. That apart, we may also usefully refer to thedecisions of this Court reported in (1977) 2 SCC 724(State of Uttar Pradesh & ors. vs. Indian Hume Pipe Co.Ltd.) and (2000) 10 SCC 482 (Union of India vs. Stateof Haryana). What appears on a plain reading of theformer decision is that whether a certain item fallswithin an entry in a sales tax statute, raises a purequestion of law and if investigation into facts isunnecessary, the high court could entertain a writpetition in its discretion even though the alternativeremedy was not availed of; and, unless exercise ofdiscretion is shown to be unreasonable or perverse, thisCourt would not interfere. In the latter decision, thisCourt found the issue raised by the appellant to bepristinely legal requiring determination by the highcourt without putting the appellant through the mill ofstatutory appeals in the hierarchy. What follows fromthe said decisions is that where the controversy is apurely legal one and it does not involve disputedquestions of fact but only questions of law, then itshould be decided by the high court instead ofdismissing the writ petition on the ground of analternative remedy being available." 18. In view of the above, the preliminary objection raised by therespondents regarding maintainability of the writ petition isrejected. 19. For proper adjudication of controversy involved, we deem itappropriate to quote the relevant provisions of the Income TaxAct, which read thus: "155. Other amendments (18) Where any deduction in respect of any surchargeor cess, which is not allowable as deduction undersection 40, has been claimed and allowed in the case ofan assessee in any previous year, such claim shall bedeemed to be under-reported income of the assesseefor such previous year for the purposes of sub- section(3) of section 270A, notwithstanding anythingcontained in sub-section (6) of section 270A, and theAssessing Officer shall recompute the total income ofthe assessee for such previous year and makenecessary amendment; and the provisions of section154 shall, so far as may be, apply thereto, the period offour years specified in sub-section (7) of section 154being reckoned from the end of the previous yearcommencing on the 1st day of April, 2021: Providedthat in a case where the assessee makes an applicationto the Assessing Officer in the prescribed form andwithin the prescribed time, requesting forrecomputation of the total income of the previous yearwithout allowing the claim for deduction of surcharge orcess and pays the amount due thereon within thespecified time, such claim shall not be deemed to beunder-reported income for the purposes of sub-section(3) of section 270A. 270A. Penalty for under reporting and misreporting ofincome. (9) The cases of misreporting of income referred to insub- section (8) shall be the following, namely:-(a) misrepresentation or suppression of facts;(b) failure to record investments in the books ofaccount; (c) claim of expenditure not substantiated by anyevidence; (d) recording of any false entry in the books of account; (e) failure to record any receipt in books of accounthaving a bearing on total income; and(f) failure to report any international transaction or anytransaction deemed to be an international transactionor any specified domestic transaction, to which theprovisions of Chapter X apply. 270A. Penalty for under reporting and misreporting ofincome. (9) The cases of misreporting of income referred to insub- section (8) shall be the following, namely:-(a) misrepresentation or suppression of facts;(b) failure to record investments in the books ofaccount; (c) claim of expenditure not substantiated by anyevidence; (d) recording of any false entry in the books of account; (e) failure to record any receipt in books of accounthaving a bearing on total income; and(f) failure to report any international transaction or anytransaction deemed to be an international transactionor any specified domestic transaction, to which theprovisions of Chapter X apply. 270AA. Immunity from imposition of penalty, etc.(1) An assessee may make an application to theAssessing Officer to grant immunity from imposition ofpenalty under section 270A and initiation ofproceedings under section 276C or section 276CC, if hefulfils the following conditions, namely:- (a) the tax and interest payable as per the order ofassessment or reassessment under sub-section (3) ofsection 143 or section 147, as the case may be, hasbeen paid within the period specified in such notice ofdemand; and (b) no appeal against the order referred to in clause (a)has been filed. (2) An application referred to in sub-section (1) shall bemade within one month from the end of the month inwhich the order referred to in clause (a) of sub-section(1) has been received and shall be made in such formand verified in such manner as may be prescribed. (3) The Assessing Officer shall, subject to fulfilment ofthe conditions specified in sub-section (1) and after theexpiry of the period of filing the appeal as specified inclause (b) of sub-section (2) of section 249, grantimmunity from imposition of penalty under section270A and initiation of proceedings under section 276Cor section 276CC, where the proceedings for penaltyunder section 270A has not been initiated under thecircumstances referred to in sub-section (9) of the saidsection 270A. (4) The Assessing Officer shall, within a period of onemonth from the end of the month in which theapplication under sub-section (1) is received, pass anorder accepting or rejecting such application: Provided that no order rejecting the application shallbe passed unless the assessee has been given anopportunity of being heard. (5) The order made under sub-section (4) shall be final. (6) No appeal under section [section 246 or] section246A or an application for revision under section 264shall be admissible against the order of assessment orreassessment, referred to in clause (a) of sub-section(1), in a case where an order under sub- section (4)has been made accepting the application." 20. Sub-section (18) of Section 155 of the Income Tax Act is inserted vide Finance Act, 2022 w.e.f. 01.04.2022. The abovereferred provisions provide that deduction of any surcharge, cess,which is not allowable as deduction under Section 40 of theIncome Tax Act, then such claim shall be deemed to be under- reported income of the assessee for the purpose of levy of penaltyunder Section 270A of the Act. It further provides that if anassessee makes an application to the assessing officer inprescribed form in prescribed time requesting for recomputation ofincome of previous year deducting the surcharge or cess and paysthe difference amount within specified time, his claim shall not bedeemed to be unreported income. 21. Section 270A of the Act specifies penalty for under-reportingand misreporting, wherein sub-section (9) of Section 270AA of theAct categorizes the cases of misreporting of income. reported income of the assessee for the purpose of levy of penaltyunder Section 270A of the Act. It further provides that if anassessee makes an application to the assessing officer inprescribed form in prescribed time requesting for recomputation ofincome of previous year deducting the surcharge or cess and paysthe difference amount within specified time, his claim shall not bedeemed to be unreported income. 21. Section 270A of the Act specifies penalty for under-reportingand misreporting, wherein sub-section (9) of Section 270AA of theAct categorizes the cases of misreporting of income. 22. Sub-section (3) of Section 270AA of the Income Tax Actempowers the assessing officer to grant immunity from impositionof penalty under Section 270A and initiation of proceedings underSection 276C or under Section 276CC of the Income Tax Act onfulfillment of the conditions of sub-section (1) of Section 270AAafter the expiry of the period of filing the appeal if the proceedinghas not been initiated against the assessee under thecircumstances referred to in sub-section (9) of Section 270A. 23. Sub-section (4) of Section 270AA provides that the assessingofficer shall pass an order accepting or rejecting any applicationfiled by the assessee seeking immunity from imposition of penaltyunder Section 270A within a period of one month from the end ofmonth in which the application under sub-section (1) is received. 24. In the case of Schneider Electric South East Asia (HQ) PteLtd. (supra), Delhi High Court has held as under: "6. Having perused the impugned order dated 09thMarch, 2022, this Court is of the view that theRespondents' action of denying the benefit of immunityon the ground that the penalty was initiated underSection 270A of the Act for misreporting of income isnot only erroneous but also arbitrary and bereft of anyreason as in the penalty notice the Respondents havefailed to specify the limb - "underreporting" or"misreporting" of income, under which the penaltyproceedings had been initiated. 7. This Court also finds that there is not even a whisperas to which limb of Section 270A of the Act is attracted-and how the ingredient of subsection (9) of Section270A is satisfied. In the absence of such particulars, the mere reference to the word "misreporting" by theRespondents in the assessment order to deny immunityfrom imposition of penalty and prosecution makes theimpugned order manifestly arbitrary. 8. This Court is of the opinion that the entire edifice ofthe assessment order framed by Respondent No.1 wasactually voluntary computation of income filed by thePetitioner to buy peace and avoid litigation, which facthas been duly noted and accepted in the assessmentorder as well and consequently, there is no question ofany misreporting. 9. This Court is further of the view that the impugnedaction of Respondent No.1 is contrary to the avowedLegislative intent of Section 270AA of the Act toencourage/incentivize a taxpayer to (i) fast-tracksettlement of issue, (ii) recover tax demand; and(iii) reduce protracted litigation. [Emphasis supplied] 25. In Ultimate Infratech Private Limited vs. NationalFaceless Assessment Centre Delhi & Anr.(supra), Delhi HighCourt has held as under: "5. Having heard learned counsel for the petitioner, thisCourt is of the view that it is only in cases whereproceedings for levy of penalty have been initiated onaccount of alleged misreporting of income that anassessee is prohibited from applying and availing thebenefit of immunity from penalty and prosecution underSection 270AA. 6. In fact, the statutory scheme for grant of immunityis based on satisfaction of three fundamentalconditions, namely, (i) payment of tax demand; (ii) [Emphasis supplied] 25. In Ultimate Infratech Private Limited vs. NationalFaceless Assessment Centre Delhi & Anr.(supra), Delhi HighCourt has held as under: "5. Having heard learned counsel for the petitioner, thisCourt is of the view that it is only in cases whereproceedings for levy of penalty have been initiated onaccount of alleged misreporting of income that anassessee is prohibited from applying and availing thebenefit of immunity from penalty and prosecution underSection 270AA. 6. In fact, the statutory scheme for grant of immunityis based on satisfaction of three fundamentalconditions, namely, (i) payment of tax demand; (ii) non-institution of appeal; and (iii) initiation of penaltyon account of under reporting of income and not onaccountofmisreportingofincome.7. This Court is also of the view that the petitionercannot be prejudiced by the inaction of the AssessingOfficer in passing an order under Section 270AA of theAct within the statutory time limit as it is settled lawthat no prejudice can be caused to any assessee onaccount of delay/default on the part of the Revenue.8. In the present case, the petitioner has satisfied theaforesaid conditions, inasmuch as, (i) the tax has beenpaid on the additions; (ii) appeal has undisputedly notbeen filed; and (iii) penalty (as would be evident fromthe penalty notice) has been initiated on account of"underreporting" of income." 26. In Rohit Kapur VS. Principal Commissioner of Income Tax-7, New Delhi & Anr. (supra), Delhi High Court has held asunder: "12. Before proceeding further, it is relevant to refer toSub-section 4 of Section 270AA of the Act, which readsas under: 270AA xxxx xxxx xxxxThe Assessing Officer shall, within a period ofone month from the end of the month inwhich the application under sub-section (1) isreceived, pass an order accepting or rejectingsuch application: Provided that no order rejecting theapplication shall be passed unless theassessee has been given an opportunity ofbeing heard. xxxx xxxx xxxx 13. The proviso to Sub-section (4) of Section 270AAof the Act makes it amply clear that before anapplication of rejected, the applicant must be givenan opportunity of being heard. In the present case,there is no dispute that the petitioner was notafforded the said opportunity. 14. In view of the above, this Court considers itapposite to set aside the impugned order as thesame has been passed without following theprocedure as set out in Section 270AA(4) of theAct.” 27. In the present case, neither in the assessment order dated22.09.2022 nor in the subsequent show-cause notices, theAssessing Officer has specified that the case of the petitioner-company is covered under which part of sub-section (9) of Section270A of the Act. Even in the impugned order dated 31.03.2023also, it is not specified that which part of sub-section (9) ofSection 270A of the Act is attracted in the case of petitioner. 14. In view of the above, this Court considers itapposite to set aside the impugned order as thesame has been passed without following theprocedure as set out in Section 270AA(4) of theAct.” 27. In the present case, neither in the assessment order dated22.09.2022 nor in the subsequent show-cause notices, theAssessing Officer has specified that the case of the petitioner-company is covered under which part of sub-section (9) of Section270A of the Act. Even in the impugned order dated 31.03.2023also, it is not specified that which part of sub-section (9) ofSection 270A of the Act is attracted in the case of petitioner. 28. Otherwise also, the petitioner-company in its reply to showcause notice dated 16.03.2022 and subsequent replies to thedifferent show cause notices has justified its claim for deduction ofeducation cess, however, the Assessing Officer without consideringthe said justification or rejecting the same has passed theimpugned order mechanically. We are of the view that once thepetitioner-company has withdrawn its claim vide letter dated19.03.2022 for deduction of education cess in view of insertion ofsub-Section (18) of Section 155 before it came into force w.e.f.01.04.2022, the petitioner-company is entitled for immunity fromimposition of penalty under Section 270A of the Act though theproceedings against it were initiated for imposition of penalty.Moreover, while initiating the said proceedings vide order dated22.09.2022, the Assessing Officer has failed to specify that whichpart of sub-Section (9) of Section 270A is attracted in the case ofpetitioner-company, the said initiation is nonest. The respondent vide impugned order dated 31.03.2022 has clarified that thepetitioner-company is fulfilling the conditions mentioned in sub-Section (1) and (2) of Section 270AA, however, its conclusion thatthe petitioner-company do not fulfill the condition mentioned insub-section (3) of Section 270AA of the Act is illegal and cannotbe sustained. 29. Apart from that the application filed by the petitioner-companyunder Section 270AA of the Act seeking immunity from impositionof penalty has not been decided by the Assessing Officer withinprescribed time as per sub-section (4) of Section 270AA of theAct, the impugned action of the Assessing Officer of imposingpenalty against the petitioner-company is liable to be set aside. 30. Resultantly, this writ petition is allowed. The penalty orderdated 31.03.2023 passed under Section 270A of the Income TaxAct is set aside. The demand notice issued by the respondent No.1under Section 156 of the Income Tax Act is also set aside. Therespondent No.1 is directed to grant immunity under Section270AA of the Income Tax Act to the petitioner-company. 31. No order as to cost. (MUNNURI LAXMAN),J masif/-D.R. (VIJAY BISHNOI),J