2024 (10) TMI 1487 - HC - Income Tax

Court Overturns Previous Denial of Immunity; Orders Reconsideration with Hearing Opportunity for Petitioner.

The HC remanded the case to the AO for reconsideration, setting aside the previous order that denied the petitioner immunity from penalty under Section ... Penalty u/s 270AA - assessee’s case was one of “under-reporting of income in consequence of mis-reporting” - HELD THAT:- The controversy relates to the income and expenditure booked on account of interest accrued and payable. The petitioner had availed certain interest-bearing loans, and at the same time, had also advanced unsecured loans. AO found that the interest payable in respect of certain loans advanced by the assessee was higher than the interest at which the funds were arranged. For the aforesaid reason, the assessee had made an addition being on account of the negative spread of interest. Prima facie, this case would not be one of mis-reporting as the facts on the basis of which additions have been made appear to be disclosed by the assessee. AO had issued the Show Cause Notice dated 17.09.2024 to the assessee calling upon him to show cause as to why his application for immunity from imposition of the penalty not be rejected on the ground that the petitioner’s case was of under reporting of income on account of mis-reporting. The petitioner claims that he had attempted to seek an adjournment online, however, he faced with certain technical difficulties and was not able to do so. As noted that consequently, the impugned order has been passed without considering the contentions of the petitioner, as sought to be advanced before this Court. Revenue fairly states that in the given circumstances, the matter may be remanded to the AO to consider the request of the petitioner for immunity from imposition of the penalty u/s 270AA afresh. This course commends to this Court. We, accordingly, set aside the impugned order passed by the AO u/s 270AA of the Act and remand the matter to the AO to consider afresh. The petitioner challenged an order rejecting immunity from penalty under Section 270AA of the Income Tax Act. The High Court remanded the matter to the Assessing Officer for fresh consideration, as the impugned order was passed without considering the petitioner's contentions. The court set aside the order and directed the AO to pass a fresh order after giving the petitioner an opportunity to be heard.