TaxTMI 
TaxTMI 
2023 (7) TMI 649
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.... relevant facts of the case are that assessee is an individual and derives income from salary, filed his return of income declaring total income of Rs. 4,22,340/- after claiming deduction under chapter VI-A of Rs. 2,35,000/-. Subsequently, a survey was conducted u/sec. 133A of the Act on the assessee's ITP, and on the basis of the information from Inv. Wing, the case of the assessee was reopened by issue of notice u/s.148. In response thereto, assessee filed return on 03-03-2020 declaring total income of Rs. 8,27,340/- wherein he claimed deduction of Rs. 1,50,000/- under chapter VI-A. In the assessment proceedings, the Assessing Officer (AO) accepted the income of Rs. 8,27,340/- filed in the return in response to notice u/sec. 148. The AO noted that in the original return filed on 27-06-2017, the gross total income was declared at Rs. 6,57,341/- while in the return dated 03-03-2020, the gross total income was declared at Rs. 9,77,338/- and thus higher by Rs. 3,20,000/-. Similarly, the deduction claimed under chapter VI-A was reduced from Rs. 2,35,000/- to Rs. 1,50,000. The AO accepted the income as per return filed in response to the notice u/sec. 148 and initiated penalty proceedi....
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....000. The Chap VI A deduction is claimed at Rs. 3,55,000 in the original return as against Rs. 1,50,000 claimed in the later return and is inflated by Rs. 1,55,000. 5.4 Sec 270A(1) is the charging section for levy of penalty and sec 270A(2) lays down situations in which an assessee is considered to have under reported his income. The case of the assessee for both AYs would fall in sec 270A(2)(a) as the assessed income is higher than that as determined u/s 143(1)(a). The quantum of such under reported income is to be determined as per sec 270A(3)(i)(a) for both AYs. There are certain exclusions from the definition of under reporting of income which is provided in sec 270A(6). Clauses (b) to (e) of sec 270A(6) obviously do not apply to the assessee and one has to examine cl (a) of sec.270A(6) whether the explanation offered by the assessee is bonafide and has disclosed all material facts to satisfy such explanation. As discussed earlier, the assessee has clearly offered no explanation whatsoever in respect of why & how the gross total income was under stated in the return in spite of Form 16 issued by the employer recording the correct salary. Similarly, there is no explanati....
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....aim under Chap VI A, the assessee has not revealed the basis on which a higher claim was made, in spite of being specifically requested by me. Based on the facts as discussed above, I am of the view that the assessee has clearly mis-reported his income as defined in sec 270A(9) and therefore the AO has correctly levied penalty @200% as prescribed. The scheme of the section as evident from the language is that a mere under reporting attracts penalty of 50% with certain exclusions, while mis-reportinq attracts a higher penalty of 200%. The legislature has intentionally distinguished between misreporting and under reporting by providing specific definition of misreporting and exclusions to under reporting. In my view by suppressing his gross total income in spite of Form 16 recording a higher and correct quantum, the assessee has mis-reported his GTI, and by inflating his Chap VI A deduction, the assessee has misreported income to the extent of inflation. These actions of the assessee would fall under clauses (a) and (c) of sec 270A(9). I therefore uphold the levy of penalty u/s 270A for both the AYs and dismiss the single ground of appeal." 6. We have analyzed the facts and circum....
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....pecifies that in case of under-reporting of income as a consequence of mis-reporting thereof, sec. 270A(8) and (9) would operate and a higher penalty is prescribed. As per the provisions of clause (a) & (c) of sec. 270A(9), the assessee has mis-reported his income. The scheme of the provisions provides that if it is a case of under-reporting, it attracts penalty of 50% with certain exclusions, but if it is a case of mis-reporting, it attracts higher penalty of 200%. The assessee admittedly declared lower salary than that reported by his employer in Form 16 and further has not disclosed the basis for such misreporting. This is a clear case of mis-representation or suppression of facts. Similarly, the assessee had inflated his claim of deduction under chapter VI-A of the Act and again has not revealed the basis for which, such higher claim of deduction was made. In fact, the assessee specifically stated before the NFAC that he does not have any explanation for these discrepancies. In fact, as per records with the Department, the assessee is habitual for claiming fraudulently refund by increasing deduction and reducing his taxable income since A.Y. 2016-17 onwards. Reference may be ma....
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....or temporal" observed Chief Justice Edward Coke of England about three centuries ago. It is the settled proposition of law that a judgment or decree obtained by playing fraud on the court is a nullity and non est in the eyes of law. Such a judgment/decree - by the first court or by the highest court - has to be treated as a nullity by every court, whether superior or inferior. It can be challenged in any court even in collateral proceedings." 21. In the said case it was clearly stated that the courts of law are meant for imparting justice between the parties and one who comes to the court, must come with clean hands. A person whose case is based on falsehood has no right to approach the Court. A litigant who approaches the court, is bound to produce all the documents executed by him which are relevant to the litigation. If a vital document is withheld in order to gain advantage on the other side he would be guilty of playing fraud on court as well as on the opposite party. 22. In Smt. Shrist Dhawan v. M/s. Shaw Brothers AIR 1992 SC 1555 it has been opined that fraud and collusion vitiate even the most solemn proceedings in any civilised system of jurisprudence. It....