TaxTMI 
TaxTMI 
2023 (6) TMI 430
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....ide order on 23.11.2022, which action of the Ld. CIT(A) was again challenged before this Tribunal. And the Tribunal vide order dated 31.03.2023 has given part relief to the assessee and confirmed certain additions since assessee did not press the addition on following (i) Interest on income tax refund to the tune of Rs. 64,581/- (ii) to interest of late payment of TDS of Rs. 973/-, (iii) disallowance of expenses on estimate basis @ 0.6% i.e, Rs. 2,416/-. Thus addition of total Rs. 67,970/- was not pressed before Tribunal, which was confirmed. Thus, the assessee's quantum assessment was partly allowed by the Tribunal directing AO, to delete Rs. 3,27,026/- and thus assessee's appeal(quantum) was partly allowed. 3. Meanwhile, the AO levied penalty u/s 270A of the Act, wherein AO imposed 200% of tax which was held by him to be mis-reported at Rs. 2,44,110/- by order dated 06-08-2021 which has been challenged by the assessee before the Ld. CIT(A) who was pleased to confirm the same by passing the impugned order; and therefore the assessee being aggrieved, is before this Tribunal. 4. We have heard both the parties and perused the records. It is noted that the assessee's quantum ass....
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....essed immediately before such reassessment; (d) the amount of deemed total income assessed or reassessed as per the provisions of section 115JB or section 115JC, as the case may be, is greater than the deemed total income determined in the return processed under clause (a) of sub-section (1) of section 143; (e) the amount of deemed total income assessed as per the provisions of section 115JB or section 115JC is greater than the maximum amount not chargeable to tax, where [no return of income has been furnished or where return has been furnished for the first time under section 148) (f) the amount of deemed total income reassessed as per the provisions of section 115JB or section 115JC, as the case may be, is greater than the deemed total income assessed or reassessed immediately before such reassessment; (g) the income assessed or reassessed has the effect of reducing the loss or converting such loss into income. (3) The amount of under-reported income shall be,- 3.The Amount of under-report income shall be (i) in a case where income has been assessed for the first time. (a) if return has been furnished, the difference ....
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....ween the loss claimed and the income or loss, as the case may be, assessed or reassessed. (4) Subject to the provisions of sub-section (6), where the source of any receipt, deposit or investment in any assessment year is claimed to be an amount added to income or deducted while computing loss, as the case may be, in the assessment of such person in any year prior to the assessment year in which such receipt, deposit or investment appears (hereinafter referred to as "preceding year") and no penalty was levied for such preceding year, then, the under- reported income shall include such amount as is sufficient to cover such receipt. deposit or investment. (5) The amount referred to in sub-section (4) shall be deemed to be amount of income under-reported for the preceding year in the following order- (a) the preceding year immediately before the year in which the receipt. deposit or investment appears, being the first preceding year, and (b) where the amount added or deducted in the first preceding year is not sufficient to cover the receipt, deposit or investment, the year immediately preceding the first preceding year and so on. (6) The un....
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....g of any false entry in the books of account; (e) failure to record any receipt in books of account having a bearing on total income; and (f) failure to report any international transaction or any transaction deemed to be an international transaction or any specified domestic transaction, to which the provisions of Chapter X apply. (10) The tax payable in respect of the under-reported income shall be- (a) where no return of income has been furnished for where return has been furnished for the first time under section 148] and the income has been assessed for the first time, the amount of tax calculated on the under-reported income as increased by the maximum amount not chargeable to tax as if it were the total income; (b) where the total income determined under clause (a) of sub-section of section 143 or assessed, reassessed or recomputed in a preceding order is a loss, the amount of tax calculated on the under-report income as if it were the total income; (c) in any other case, determined in accordance with the formula:- (X-Y) where, X = the amount of tax calculated on the under-reported income a incr....
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....e -Subsection (11) No double penalty on same addition -Subsection (11) - Penalty to be imposed by order in writing 6. The Ld AR pointed out that there are two (2) different type of penalty prescribed on the basis of default of the assessee. First one is that Penalty can be levied at 50% of tax payable for under-reporting of income as per sub section (2) r.w s. (7) of section 270A of the Act; and second penalty can be levied at a higher amount being 200% of the tax payable, if such under-reported income is in consequence of misreporting of income as per subsection (8) r.w.s. (9) of section 270A of the Act. 7. According to him, as stated earlier, imposition of penalty is at the discretion of AO, since sub-section (1) of section 270A of the Act, refers to the word 'may' and not shall. And further, he pointed out that there are certain specific instances/exceptions given in sub section (6) of section 270A of the Act, [which does not constitute under reported income for the purpose of s. 270A]. Therefore, according to him it is clear that all additions made in the quantum/assessment order cannot culminate into charging of penalty u/s 270A of the Act; and ....
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....3 4 Disallowance of expenses on estimate basis at 0.6% 2,416 3,94,996 10. Out of the aforesaid quantum additions made by AO, the assessee had filed an appeal which was before this Tribunal wherein the Tribunal was pleased to delete the addition of Rs. 3,27,026/- (Interest paid on late payment of service tax by order dated 31.03.2023 in ITA. No.10/Mum/2023 for AY. 2017-18). Therefore, the quantum addition sustained is now only Rs. 67,970/- (i.e. Rs. 64,581 + Rs. 973 + Rs. 2,416/-). 11. It has to be examined as to whether the action of the AO to have levied penalty under sub-section (9) of section 270A of the Act is legally valid or not. The AO in order to levy the penalty has given the reason for doing so as under:- "The contention of the assessee to drop the penalty proceedings is rejected because the assessee has clearly misreported its income by an amount of Rs. 3,94,996/- as per the provisions of the Section 270(A)(9) of the Act. And a misreported income leads to evasion of Tax. Hence, it is clearly established that the assessee has committed an intentionally fault under the provisions of the Section 27....