Shantijanak Estates Private Limited v. Assistant Commissioner of Income Tax, Circle 22(2), Delhi & Anr.

What happened

The property-letting company’s AY 2024–25 income was assessed under house property rather than business, and penalty proceedings were initiated. It paid the ₹37,99,340 demand before the due date and applied in Form 68 for immunity. The assessing officer demanded documentary proof that no appeal had been filed, then rejected the application on 30 July 2026 saying no reply had been received. The taxpayer produced its 29 July acknowledgment and evidence that the reply had been viewed.

Questions before the court

• Whether the officer could demand negative documentary proof of non-filing of an appeal and disregard the acknowledged immunity reply.

What each side argued

The taxpayer said payment, timely application and non-appeal conditions were satisfied. Revenue counsel could not contradict the recorded factual position. The court focused on the unlawful evidentiary demand and failure to consider the response.

Why the court ruled this way

An assessee cannot sensibly produce documentary evidence of an event that has not occurred. The officer could take a declaration, and Form 68 already contained the relevant declaration. The acknowledged response also contradicted the reason given for rejection. The court required objective reconsideration under the statute instead of itself issuing a final immunity order.

Controlling point

An immunity application cannot be rejected through an impossible demand for negative evidence of non-appeal or by ignoring a demonstrably filed reply.

Order and next steps

The rejection was set aside. A fresh order under section 270AA must be passed by 15 October 2026. Until that application is decided, the Faceless Assessing Officer must not proceed with the proposed section 270A penalty.

Practical implications

Keep demand-payment receipts, Form 68, declarations and electronic submission acknowledgments together. A challenge should demonstrate compliance with the actual statutory conditions, not merely invoke fairness. Distinguish the stay of penalty processing from the eventual grant of immunity.

Limits of this ruling

• The court ordered reconsideration; it did not itself grant final immunity.
• The judgment does not dispense with the statutory payment, filing or eligibility conditions.