Power of Principal Commissioner or Commissioner to grant immunity from penalty [Section 273AA] :

Section 273AA empowers the Principal Commissioner or Commissioner to grant immunity from penalty.

(i) The application for the immunity has to be made by the assessee (person whose case has been abated under section 245HA) to the Principal Commissioner or Commissioner of Income-tax.

(ii) Where penalty was levied before or during the pendency of settlement proceedings, then the assessee can approach the Principal Commissioner or Commissioner for immunity at any time.

(iii) However, if no penalty was levied till the time of abatement of proceedings before Settlement Commission, then the assessee must make an application for immunity before the imposition of penalty by the Income-tax authority.

(iv) The Principal Commissioner or Commissioner can grant immunity, subject to such conditions as he may think fit to impose, on being satisfied that the assessee has –

(i) co-operated in the proceedings after abatement; and

(ii) made a full and true disclosure of his income and the manner in which such income has been derived.

(v) The immunity granted shall stand withdrawn, if such assessee fails to comply with any condition subject to which the immunity was granted.

(vi) The immunity granted to a person may, at any time, be withdrawn by the Principal Commissioner or Commissioner, if he is satisfied that such person had, in the course of any proceedings, after abatement,

(i) concealed any particulars material to the assessment from the income-tax authority; or

(ii) given false evidence.

Consequently, such person would become liable to the imposition of any penalty under this Act to which such person would have been liable, had not such immunity been granted.