Under/mis-reporting penalty (SCN u/s 274): how to reply

Additions made in assessment; penalty notice issued under s.274 read with 270A

Filed through Faceless penalty.

As stated in the notice. Set by the statute or rules; the date is stated in the notice.

FORM NO. 68: Application for immunity from penalty under section 270AA, filed through Faceless penalty.

Unverified: The field list of this form is to be confirmed against the notified text.

• explicit classification challenge naming the specific s.270A(9) limb alleged
• bona fide / full-disclosure narrative
• 270AA immunity pleaded as an alternative prayer, with the one-month Form 68 window
• reference to the specific addition the penalty is founded on

Contest the classification first: under-reporting alone carries 50%, misreporting under any 270A(9) limb (e.g. misrepresentation, suppression of facts, false entries) carries 200%, pin down exactly which limb, if any, the AO invokes and rebut it specifically rather than arguing the penalty in general. Plead bona fide, complete disclosure. Always plead immunity under s.270AA (Form 68, within one month of the assessment order) as an alternative prayer even while contesting the penalty on merits, the two are not mutually exclusive.

1. Preliminary submissions

   Identify the SCN, the addition it is founded on, and the AY.

2. Under-reporting vs mis-reporting classification

   Contest the classification, 50% (under-reporting) vs 200% (mis-reporting) turns on which limb of 270A(9) applies.

3. Bona fide explanation

   Explain the position taken in the return was bona fide with full disclosure.

4. Immunity u/s 270AA (alternative prayer)

   In the alternative, seek immunity under s.270AA via Form 68 within one month of the assessment order.

5. Prayer

   Request that no penalty be levied, or in the alternative that immunity be granted.

• Section 270A, Income-tax Act, 1961
• Section 439, Income-tax Act, 2025