TaxTMI 
TaxTMI 
2023 (3) TMI 550
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....ns of penalty u/s 270A relating to misreporting of income are not applicable at all. The orders passed by the authorities below being bad in law are liable to be quashed. 3. In any case, penalty as levied and confirmed is bad in law and liable to be deleted pecially in the absence of proper notice and recording of satisfaction by the assessing officer. 4. The learned CIT(A) has erred in confirming the quantum of the penalty levied by the AU albeit holding that the appellant had under reported the income as against the Assessing officer's stand that the appellant had mis reported the income. The action of CIT(A) in confirming the quantum of penalty is contrary to his own findings is liable to be negated and the penalty as levied be deleted. 5. In any case, the authorities below have erred in not appreciating the fact that there being neither under reporting of income nor misreporting of income, the appellant is not liable for any penalty. The penalty having being levied and confirmed on erroneous appreciation of facts and law applicable is t o be cancelled. 6. In any case and without prejudice, the levy of penalty is erroneous and excessive. 7. In view of the abov....
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....enalty proceedings u/s 270A of the Act, the AO noted that the assessment was completed u/s 143(3) of the Act and the findings brought on assessment were consequent upon the suppression of facts within the meaning of the provision of clause (a) of sub sec. (9) of sec. 270A of the Act, therefore, under reporting of income is in consequence of misreporting, therefore, the penalty referred in such sec. 270A shall be equal to 200% of the tax payable for under reporting of income and the same was computed as per sec.270A(10) and imposed a penalty of Rs.3,71,870/- and passed order on 07/01/2022. 4. Feeling aggrieved from the above order, the assessee filed appeal before the CIT(A) and CIT(A) confirmed the penalty order passed by the AO by observing as under:- "5.4 I have considered the appellant's claim. While passing the penalty order, the Assessing Officer has dealt with this objection. It is pertinent to note that arguments put forth by the appellant pertain to the erstwhile penalty for concealment u/s 271(1)(c) of the Act. Penalty u/s 270A has been invoked in the appellant's case as there has been an addition to the returned income. The section 270AA has an in-built immunit....
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....nce Ltd., (2018) 100 taxmann.com 104 (SC) 3) Commissioner of Income-tax v. Manjunatha Cotton & Gining Factory (2013) 35 taxmann.com 250 (Karnataka) 4) Commissioner of Income-tax, Ahmedabad v. Reliance Petro products (P) Ltd., (2010) 189 Taxman 322 (SC) 5) Hameed Joharan (D) And Ors vs Abdul Salam (D) by Lrs. And Ors on 13 August, 2001 ITA No. 9876 of 1995 6) Schneider Electric South East Asia (HQ) Pvt Ltd vs. ACIT W.P.(C) 5111/2022 & C.M. Nos. 15165-15166/2022 7. The ld.DR relied on the order of the lower authorities and he submitted that the lower authorities are justified in levy of penalty u/s 270A of the Act. The assessee should have suo moto disallowed the expenditure incurred towards earning of the income as per sec. 14A r.w. Rule 8D of the Act, whereas in this case during the course of assessment proceedings the AO noticed that the assessee is liable for making disallowance. He further submitted that the assessee did not file appeal and not submitted declaration in the prescribed Form No.68 for granting immunity from the penalty. He further stated that as per the assessment order, the assessee's case falls under the conditions set out in sec. 270A of the Act., ....
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....his Court in Joint Investments (P.) Ltd. v. CIT [2015] 59 taxmann.com 295/233 Taxman 117/372 ITR 694 has held that disallowance under section 14A of the Act cannot exceed exempt income. He submits that when disallowance over and above exempt income itself is not permissible, there can't be any misreporting of income. He further submits that in any case, the issue involved herein is of estimation of disallowance under section 14A of the Act. He submits that as per clause (c) of section 270A(6) of the Act, no penalty is leviable where the amount of underreported income is determined on the basis of an estimate, if the assessee has on his own, estimated a lower amount of disallowance on the same issue and had included such income in the computation of his income. Further, this is a case where all the facts, information, documents and figures submitted by the Petitioner had been accepted by the Respondents and the subject matter of dispute is a pure estimation of disallowance under section 14A of the Act. He further submits that even otherwise this issue of disallowance under section 14A of the Act does not fall in any of the limb of "misreporting" of income stated in section 270A ....