Misreporting of income attracts section 270A penalty when property sale proceeds are omitted and incorrect loss claims are made.

Penalty for misreporting of income under section 270A of the Income-tax Act, 1961 was sustained where one property sale was omitted from capital gains computation and housing loan interest was wrongly claimed as business loss. The record showed that the sale transactions were already reflected in Form 26QB and Form 26AS, and only five of six property transactions were disclosed, indicating a deliberate omission rather than a clerical error. The assessee offered no effective rebuttal, so the penalty order was found to suffer from no infirmity and the challenge failed.

---

---

Issues: Whether the penalty under section 270A of the Income-tax Act, 1961 was justified for misreporting of income arising from non-disclosure of sale consideration of property and wrongful claim of housing loan interest as business loss.

Analysis: The assessee did not disclose one property sale while computing capital gains and also claimed housing loan interest as business loss. The record showed that the sale transactions were reflected in Form 26QB and Form 26AS, and five out of six property transactions were disclosed, but one was deliberately omitted. The claim that the accountant made a clerical mistake was not accepted, as the omissions and incorrect claims were treated as acts of commission rather than inadvertent error. In the absence of any effective rebuttal, the penalty order sustained by the first appellate authority was found to suffer from no infirmity.

Conclusion: The penalty under section 270A was upheld and the assessee's challenge failed.

Ratio Decidendi: Where income is not disclosed despite available transaction records and an incorrect claim is made in the return, the conduct constitutes misreporting warranting penalty under section 270A of the Income-tax Act, 1961.

---