TaxTMI 
TaxTMI 
2023 (10) TMI 1276
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....70A of the Income Tax Act, 1961 (the "Act") pertaining to Assessment year ("AY") 2018-19. 2. The assessee has raised the following grounds of appeal:- "1. That on the given facts and circumstances of the case the Ld. CIT(A) erred in not appreciating the fact that Assessee suo motu during the course of Asstt. proceedings paid both the additional tax and interest of Rs. 51,64,570/- vide challan 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 ....
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.... was not solicited or its need was not appreciated." 3. Briefly stated, the assessee is a Society registered under the Society Registration Act, 1860 incorporated on 26.02.1987. It filed its return online on 30.10.2018 for AY 2018-19 declaring income at Rs. Nil. Its case was selected for scrutiny under CASS. Statutory notice(s) were issued / served upon the assessee in response to which requisite details were submitted. During assessment proceedings the Ld. AO observed that the assessee earned interest of Rs. 90,02,345/- during the year which it claimed as exempt. On query, the assessee vide submission dated 26.02.2021 stated that it had initially filed ITR with Nil income. Now the assessee is offering interest income for tax and filed rev....
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.... 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 was also submitted that "penalty'' and "assessment" are two independent proceedings. There could be g....
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....ce there is under-reporting / misrepresenting, the Ld. AO does not have any discretion but to compute the penalty. The Ld. CIT(A) rejected all the decisions relied upon by the assessee saying that they were rendered in the context of section 271(1)(c). Since the assessee had not filed application under section 270AA to seek immunity from imposition of penalty, the Ld. CIT(A) did not consider the contention of the assessee regarding filing of revised return including therein interest income voluntarily during the course of assessment proceedings and payment of taxes thereon. He, therefore, confirmed the impugned penalty. 8. Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds relate thereto. 9. Vide application d....
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....ection 270A of the Act and submitted that the notice does not mention which limb of section 270A(9) is attracted. Placing reliance on the decision of Hon'ble Delhi High Court in Prem Brothers Infrastructure LLP V. NFAC rendered on 31.05.2022 and the decision of Mumbai Tribunal in Alrameez Construction (P) Ltd. vs. CIT/NFAC, Delhi (2023) 152 taxmann. Com 382 (Mum.-Trib.) the Ld. AR submitted that if the penalty notice does not mention which limb of section 270A of the Act is attracted and how the ingredient of sub section (9) of section 270A is satisfied, mere reference to the word "misreporting" in the assessment order for imposition of penalty is manifestly arbitrary and deserves to be quashed. 13. The Ld. DR supported the order of the Ld....
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....ee. 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 ret....