Immunity from imposition of penalty, etc.
[Section-440 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 440(1) of Income Tax Act 2025
440(1) An assessee may make an application to the Assessing Officer for granting immunity from penalty under section 439 and initiation of proceedings under section 478 or section 479, if––
- 440(1)(a) the tax and interest payable as per the order of assessment or reassessment under section 270(10) or section 279, has been paid within the period specified in the notice of demand; and
- 440(1)(b) no appeal against the order referred to in clause (a) has been filed.
Section 440(2) of Income Tax Act 2025
440(2) An application referred to in sub-section (1) shall be made within one month from the end of the month in which the order referred to in clause (a) of the said sub-section has been received in such form and such manner as prescribed.
Section 440(3) of Income Tax Act 2025
440(3) The Assessing Officer, on fulfilment of the conditions as specified in sub-section (1), and after the expiry of the period of filing appeal as specified in section 358(3)(a), shall grant immunity from penalty under section 439 and initiation of proceedings under section 478 or 479.
Section 440(4) of Income Tax Act 2025
440(4) No immunity under sub-section (3) shall be granted if penalty has been initiated under circumstances referred to in sub-section 439(11).
Section 440(5) of Income Tax Act 2025
440(5) The Assessing Officer, shall pass an order accepting or rejecting the application as referred to in sub-section (1) within three months from the end of the month of its receipt.
Section 440(6) of Income Tax Act 2025
440(6) No order of rejection under sub-section (5) shall be made without giving the assessee an opportunity of being heard.
Section 440(7) of Income Tax Act 2025
440(7) The order made under sub-section (5) shall be final.
Section 440(8) of Income Tax Act 2025
440(8) No appeal under section 356 or 357 or an application for revision under section 378 shall be admissible against the order referred to in sub-section (1)(a), if an order under sub-section (5) has been made accepting the application.
FAQs on Section 440 of Income Tax Act 2025
What is the purpose of Section 440 of the Income Tax Act, 2025?
Section 440 provides an assessee with an opportunity to seek immunity from penalty under section 439 and from the initiation of proceedings under section 478 or 479, subject to certain conditions being met.
Who can apply for immunity under Section 440?
Any assessee who has received an order of assessment or reassessment under section 270(10) or section 279, and fulfills the conditions prescribed in section 440(1), can apply for immunity.
What are the conditions required for applying for immunity under Section 440(1)?
The assessee must:
(a) pay the tax and interest payable as per the assessment/reassessment order within the period specified in the notice of demand, and
(b) not file an appeal against such order.
Is there a time limit for making the application for immunity?
Yes, under section 440(2), the application must be made within one month from the end of the month in which the assessment/reassessment order is received.
In what manner should the application for immunity be filed?
The application must be filed in the form and manner as prescribed under the rules made for this purpose.
When will the Assessing Officer grant immunity?
Under section 440(3), the Assessing Officer shall grant immunity after confirming that the conditions under section 440(1) are met and the period for filing an appeal under section 358(3)(a) has expired.
Can immunity be denied even if conditions are met?
Yes, under section 440(4), immunity cannot be granted if the penalty has been initiated under the circumstances mentioned in section 439(11).
Within what time frame must the Assessing Officer pass an order on the application?
As per section 440(5), the Assessing Officer must pass an order accepting or rejecting the application within three months from the end of the month in which the application is received.
Is the assessee given a chance to be heard before rejection?
Yes, section 440(6) mandates that no rejection order shall be made without giving the assessee an opportunity of being heard.
Is the order passed by the Assessing Officer final?
Yes, section 440(7) states that the order made under sub-section (5) is final.
Can an assessee appeal or apply for revision against the assessment order after acceptance of immunity?
No, as per section 440(8), no appeal under sections 356 or 357 or revision application under section 378 is admissible against the assessment order if the application under section 440 has been accepted.
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