Bona fide return error defeats misreporting penalty where no section 270A(9) clause is specified.

Penalty for misreporting of income under section 270A of the Income-tax Act was not sustainable where the return showed a bona fide adjustment error in failing to reduce short-term capital loss from business income. The mistake was apparent from the return itself, and there was no material showing misrepresentation, suppression of facts, false entry, or any other conduct falling within section 270A(9). The assessee accepted the error during assessment, the addition was not contested, and no specific misreporting clause was identified. On that basis, the penalty was cancelled.

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Issues: Whether penalty for misreporting of income under section 270A of the Income-tax Act, 1961 was leviable where the assessee's return reflected a bona fide mistake in not reducing short-term capital loss from business income.

Analysis: The adjustment error was evident from the return itself and there was no material indicating misrepresentation, suppression of facts, false entry, or any other category covered by section 270A(9) of the Income-tax Act, 1961. The assessee accepted the mistake during assessment, the addition was not contested, and the record did not show that the case fit any of the statutory instances of misreporting. In the absence of specification of any particular clause under section 270A(9), the penalty could not be sustained.

Conclusion: Penalty under section 270A of the Income-tax Act, 1961 was not exigible and was cancelled, in favour of the assessee.

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