TaxTMI 
TaxTMI 
2024 (4) TMI 1115
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.... thus penalty order requires to be quashed. 3. That on the facts and circumstances of the case and the provision of Law the Ld. CIT(A) has erred in not appreciating the fact that the impugned penalty order passed is without considering the reply submitted by the assessee and thus, the penalty order passed is bad in the eyes of law and liable to be quashed. 4. That on the facts and circumstances of the case and the provision of law the Ld. CIT(A) has erred in sustaining the penalty of Rs. 425614/- u/s 270A of the Act. 5. That without prejudice to the ground no. 4 above on the facts and circumstances of the case and the provision of Law the Ld. CIT(A) has erred in not appreciating the fact that the Ld. AO erroneously imposed the penalty for under reporting of income @200% instead of 50%. 6. That the appellant craves leave to reserve to itself the right to add, alter, amend, vary, modify and/or withdraw any ground(s) of appeal at or before the time of hearing. All of the above grounds of appeal are without prejudice and mutually exclusive to each other." 3. Facts in brief are that in this case, the assessee e-filed his return of income, ....
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.... against the assessee vide penalty notice dated 27.12.20219 for under reporting of income. Finally, a penalty @ 200% was imposed u/s 270A(8) upon the assessee vide order dated 26.03.2022. 3. Against the penalty order dated 26.03.2022, the assessee preferred, an appeal before the CIT(A), who affirmed the order of the Ld. AO. Therefore, now the assessee is before this Hon'ble ITAT. Certain dates which are crucial to issues involved in present matter are as under: DATE PARTICUALRS REMARKS 16.03.2018 Assessee filed his ITR at Rs. 4,93,460/- 27.12.2019 Assessment order u/s 143(3) was passed determining the total income at Rs. 13,53,184/-. Assessee did not prefer appeal before CIT(A) against such order. 27.12.2019 Penalty notice u/s 270A was issued to the assessee It was issued for "Underreporting of income" (Penalty notice annexed with this synopsis) (Para 3 at P.NO. 2 of Penalty Order) 26.03.2022 Penalty order u/s 270A was passed imposing penalty @ 200% Para 9 at P.NO. 4 of Penalty order 30.05.2023 CIT(A) order affirming the penalty order dated 26.03.2022 4. During the penalty proceedings, Ld. AO ....
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....us illegal and consequently the penalty order is liable to be quashed. 12. Further, in the instant case, from perusal of the penalty notice placed on record dated 27.12.2019, it is evident that the Ld. AO had show caused the assessee as to why the assessee should not be imposed with penalty for 'under reporting of income'. Therefore, the assessee could be expected to give reply only in respect of show cause notice that is put to him and cannot be assumed to infer/ assume/presume that merely because the Ld. AO recorded satisfaction in the quantum assessment order that offence of both 'under reporting' and 'mis-reporting' is committed by the assessee and therefore, accordingly the penalty would also be levied on the assessee for both in terms of section 270A(9) of the Act. 13. It is further submitted that the various High Courts and Benches of the Tribunal repeatedly held that the defective penalty notice issued by the Department without mentioning the proper limbs and details will be fatal to the entire penalty proceedings. 14. It is submitted that the Hon'ble jurisdictional HC in similar circumstances had quashed the penalty pr....
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....that any person who has under-reported his income shall be liable to pay a penalty in addition to tax, if any, on the under-reported income. (2) A person shall be considered to have under-reported his income, if- (a) the income assessed is greater than the income determined in the return processed under clause (a) of sub-section (1) of section 143; (b) the income assessed 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; (c) the income reassessed is greater than the income assessed or reassessed 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 r....
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....e provisions contained in section 115JB or section 115JC and under general provisions, such amount shall not be reduced from total income assessed while determining the amount under item D. Explanation.-For the purposes of this section,- (a) "preceding order" means an order immediately preceding the order during the course of which the penalty under sub-section (1) has been initiated; (b) in a case where an assessment or reassessment has the effect of reducing the loss declared in the return or converting that loss into income, the amount of under-reported income shall be the difference between 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 inc....
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....ifty per cent of the amount of tax payable on under-reported income. (8) Notwithstanding anything contained in sub-section (6) or sub-section (7), where under-reported income is in consequence of any misreporting thereof by any person, the penalty referred to in sub- section (1) shall be equal to two hundred per cent of the amount of tax payable on under-reported income. (9) The cases of misreporting of income referred to in sub-section (8) shall be the following, namely:- (a) misrepresentation or suppression of facts; (b) failure to record investments in the books of account; (c) claim of expenditure not substantiated by any evidence; (d) recording 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 ....