Penalty under section 270A(9)(a)/(c) deleted where estimate-based disallowance failed to prove misrepresentation or suppression and violated hearing rights

ITAT held that penalty under section 270A(9)(a)/(c) cannot be sustained and deleted it. The AO's estimate-based disallowance of expenses-despite books, vouchers, bank payments and TDS-did not establish misrepresentation or suppression. CIT(A)/NFAC's invocation of a different limb without issuing a fresh notice deprived the assessee of a proper hearing. Authorities relied on quantum findings without independent examination, and no positive material proved non-incurrence or concealment; appeal allowed and penalty deleted.

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Issues involved: Appeal against order of NFAC for assessment year 2017-18 u/s 250 of the Income Tax Act, 1961.

Grounds of Appeal:
1. Challenge to the order of the Ld. Commissioner of Income Tax, NFAC, Delhi.
2. Dispute over penalty order upheld by Ld. CIT (Appeals), NFAC, Delhi.
3. Contention regarding under-reported income and applicability of Sec 270A(9).
4. Dispute over expenditure subjected to TDS and alleged bogus expenditure.
5. Challenge regarding uploading of bills and vouchers in faceless assessment.
6. Prayer to confirm no penalty under Sec 270A and delete penalty levied by Ld. AO.

Facts of the Case:
- Assessee engaged in real estate development business, converted prime site into flats.
- Claimed various expenditures including depreciation, subject to tax audit u/s 44AB.
- Scrutiny assessment revealed disallowed expenses, resulting in total addition and demand.
- Penalty u/s 270A proposed and subsequently levied, leading to appeal before ld. CIT(A).

Decision of ld. CIT(A):
- Upheld penalty for misreporting of income under sec. 270A(9)(a) of the Act.
- Dismissed appeal of the assessee based on lack of concrete evidence for claimed expenses.

Appellant's Arguments:
- Contention that expenses were supported by vouchers and audited accounts.
- Disagreement with penalty imposition under sec. 270A(9)(a) based on estimation.
- Cited relevant judgments to support claim that penalty cannot be sustained.

Tribunal's Analysis:
- Noted discrepancies in vouchers and disallowed expenses based on estimates.
- Criticized authorities for not independently examining the matter for penalty levy.
- Found no conclusive evidence to support penalty imposition under sec. 270A(9)(a) or (c).
- Deleted the penalty and allowed the appeal of the assessee.

Conclusion:
The Tribunal ruled in favor of the assessee, deleting the penalty imposed under sec. 270A(9) of the Income Tax Act, 1961. The decision highlighted the importance of concrete evidence in substantiating expenses and criticized the authorities for procedural lapses in penalty imposition. The appeal was allowed on 18th Jan, 2024.

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