Tribunal upholds penalty for misreporting income, denies immunity under section 270AA.

The Tribunal dismissed the Assessee's appeal, upholding the penalty imposed under section 270A(9)(a) for misreporting income, resulting in a penalty of 200% of the tax payable on the underreported income. The Tribunal ruled that the First Appellate Authority lacked jurisdiction to consider immunity under section 270AA as no prior application was made. The appeal was deemed unsubstantial, and the decision was made by Sh. Anubhav Sharma and Sh. M. Balaganesh on 10th July 2023.

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Issues involved:
The judgment involves issues related to penalty imposition under section 270A of the Income Tax Act, 1961, specifically concerning the eligibility for immunity under section 270AA and the calculation of penalty amount.

Issue 1: Eligibility for immunity under section 270AA:
The appeal was filed by the Assessee against the penalty imposed by the Assessing Officer under section 270A of the Act. The Assessee claimed eligibility for immunity under section 270AA as the additional demand was deposited within the specified period and no appeal was filed against the assessment order. The First Appellate Authority (FAA) confirmed the penalty, stating that the case fell within section 270A(9) due to underreported income, which is considered misreporting.

Issue 2: Calculation of penalty amount:
The Assessee argued that the penalty should be Rs. 20,056, calculated at 50% of the tax payable on the underreported income as per section 270A(7) of the Act. However, the FAA upheld the penalty of Rs. 80,224 imposed by the Assessing Officer, citing misreporting of income. The Tribunal noted that the penalty was levied under section 270A(9)(a), which indicates underreported income due to misreporting, leading to a penalty of 200% of the tax payable on the underreported income.

Separate Judgment by the Judges:
The judgment was delivered by Sh. Anubhav Sharma, Judicial Member, and Sh. M. Balaganesh, Accountant Member.

In conclusion, the Tribunal dismissed the appeal of the Assessee, stating that the FAA had no jurisdiction to consider the claim of immunity under section 270AA as no application was made before the Assessing Officer. The Tribunal upheld the penalty imposed under section 270A(9)(a) due to misreporting of income, leading to a penalty of 200% of the tax payable on the underreported income. The grounds raised by the Assessee were deemed unsubstantial, and the appeal was consequently dismissed on 10th July 2023.

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