2023 (10) TMI 1276

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.... no 25008 dated 25/03/2021 even before the issue of show cause notice by AO thereby qualifying for relief u/s 270AA of IT Act. 2. That on the given facts and circumstances of the case the Ld. CIT(A) further erred in not applying the beneficial provisions of Section 270AA of IT Act for a mere technical and venial breach which is only procedural and inadvertent lapse. 3. That on the given facts and circumstances of the case the Ld. CIT(A) erred in confirming the order of AO imposing the penalty especially when the Assessee was under bona fide belief of having complied substantively with requirements of Section 270AA of IT Act as instructed by his CA and the inadvertent procedural mistake occurring by oversight, the order of AO and CIT(A) deserves to quashed. 4. The Ld. CIT(A) has erred on facts and in law in upholding the decision of learned Assessing Officer of imposing penalty of Rs. 58,88,954/- for under reporting of income in consequence of misreporting under the provisions of sec. 270A of the Act. 5. That the Ld. CIT(A) has erred on facts and in law in rejecting the appellant contention regarding the validity of penalty order as the notice of ....

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....initiated penalty proceedings under section 270A of the Act for under-reporting of income. 4. In response to show cause notice, the assessee vide letter dated 16.02.2022 stated that it is a regular tax payer and was unaware that interest income earned by is not exempt till assessment in its case for AY 2013-14 was completed wherein the same was disallowed. The assessee opted for DTVSV Scheme for 3 years to wind up the tax liability. It has not intentionally under reported, or misreported income and had voluntarily revised the return during the assessment proceedings and paid taxes of Rs. 51,06,900/- 5. The explanation of the assessee was not acceptable to the Ld. AO who calculated tax payable in respect of the under-reported income at Rs. 29,44.477/- and levied penalty of Rs. 58,88,954/- being 200% of tax payable on under reported income. 6. Aggrieved, the assessee appealed before the Ld. CIT(A). It was contended that there was genuine dispute on the taxability of interest. The assessee voluntarily revised the income during the course of assessment proceedings and paid tax thereon. It cannot, therefore, be said that the assessee under-reported or misreported its income. It....

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....ission to file the following additional ground:- "Without prejudice to the other grounds of appeal and in the facts and circumstances of the present case, the order of the Ld. CIT(A) confirming the order of the Ld. AO imposing the penalty u/s 270A of the Income tax Act, 1961 is erroneous both on facts and in law because of failure of Ld. AO to specify the specific clause of section 270A(9) of I.T Act for initiating the penalty proceedings and further initiating the penalty proceedings without even discussing the relevant provision/clause under which penalty is being levied." 10. It is stated in the application that it is purely a question of law which may be admitted in the light of judgment of NTPC vs. CIT 229 ITR 383(SC). 11. We have heard the Ld. Representative of the parties. We have admitted the aforementioned additional ground keeping in view the mandate of the Hon'ble Supreme Court that where the Tribunal is only required to consider the question of law arising from facts which are on record in the assessment proceedings, there is no reason why such a question should not be allowed to be raised when it is necessary to consider that question in order to correct....

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....any specified domestic transaction, to which the provisions of Chapter X apply. None of the above ingredients of misreporting of income is present in the case of the assessee. 15. It is an admitted position that in its original return in its Income & Expenditure Account the assessee disclosed that during the year it earned interest income and miscellaneous/other incomes aggregating to Rs. 92,23,957/- and complete details thereof were brought on record. On the face of these facts it cannot be alleged that the assessee is guilty of underreporting and/or misreporting of income. It is not the case of the Revenue that anything more than what was declared by the assessee was found by the Revenue. The case of the assessee all along has been that it was under bonafide belief that the impugned interest and miscellaneous income was exempt from tax on ground of "principle of mutuality" and therefore in its original return it claimed the same as exempt. As soon as the assessee became aware that the said income is taxable, it opted for DTVSV Scheme and revised its return for AY 2018-19 and 2019-20 offering the said income to tax and paid tax of Rs. 51,06,900/- which has not been disputed ....