TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 407
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.... is erroneous and is not based on facts and circumstances of the case. Hence the same is bad in law and the decision of Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi. 2. The Ld. CIT (Appeals), NFAC, Delhi erred in upholding the Penalty order passed by the Ld. AO. The Ld. CIT(A), NFAC, Delhi failed to adjudicate on the correctness of applicability of Sec 270A(9) in respect of the additions made in the Assessment order. 3. The Ld. CIT(A), NFAC, Delhi failed to appreciate that the additions do not come within the purview of "under-reported income" on account of Sec 270A(6) of the Income Tax Act 1961. 4. The Ld. CIT(A), NFAC, Delhi failed to appreciate that the entire expenditure was subjected to TDS and there is no bogus expen....
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.... the assessee to produce bills for Rs. 6,52,936/- claimed as Farm work expenses paid to individuals. All the payments are through Bank and were subject to TDS. As the assessee has not produced the bills this was added to the returned income. Further, the AO found expenses for the installation charges of Rs. 99,55,404/- was paid to various entities. All the payments are through Bank and were subject to TDS. AO has asked for the bills of the same. However, assessee was unable to provide all the bills in respect of the expenses claimed. Hence, Rs. 9,95,541/- (being 10 per cent of Rs. 99,55,404) was disallowed and added to the total income of the assessee. Thus, the assessment was completed on 30.12.2019 with the total addition of Rs. 16,48,477....
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....t these expenses were wrongly claimed to evade tax. Therefore, its case falls within the purview of sec. 270A(9)(a) of the Act. 2.4 In view of the above, levying penalty of Rs. 10,18,758/- u/s 270A(9) of the Act for misreporting of income was upheld by the ld. CIT(A) and he dismissed the appeal of the assessee . 3. We have heard the rival submissions and perused the materials available on record. The contention of the ld. A.R. is that the ld. AO has passed penalty order levying penalty u/s 270A(9)(a) of the Act stating that there is a mis-representation or suppression of the facts, thereby misreporting of income. However, in assessment order, he mentioned that levy of penalty u/s 270A(9)(c) of the Act. The ld. CIT(A) has confirmed the pen....
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....r this purpose, he relied on the judgement in the case of "Jai Balaji Business Corporation Pvt. Ltd. Vs. ACIT in ITA No.840/Pune/2022 dated 10.2.2023, wherein held that " Sec. 270A of the Act provides for imposition of penalty for under-reporting and misreporting of income. Sub-s. (2) enlists certain circumstances of under-reporting of income. Sub-s. (3) deals with the determination of underreported income, which, in our context, is by reducing the income returned by the assessee from the amount of income finally assessed. Sub-s. (6) is relevant for our purpose which states that under-reported income for the purpose of this section shall not include certain items. Cl. (b) of sub-s. (6) refers to: "the amount of under-reported income determi....
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....ver no details submitted for the genuineness for the same. Hence an amount of Rs. 652936A- is disallowed and added to the income of the assessee. (Addition : Rs. 6,52,936/-) 5: Disallowance on the Torsteel Rolling etc Expenses: It was noticed from the submission filed by the assessee that assessee has claimed a sum of Rs. 48307977/- as expenses on the various heads i.e (Torsteel Rolling etc Expenses) for the construction purpose. Assessee was asked to substantiate the said expenses with ledger and breakup along with the TDS reconciliation if any. Assessee has furnished the details for the same. On verification it is found that Expenses for the installation charges of Rs. 9955404- was paid to various entity, however assessee was unable to....
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....edly, the NFAC has not carried out this exercise. On this count, the penalty cannot be levied. Without prejudice to this, in our opinion, the disallowance of expenditure made by ld. AO on estimate basis though the assessee has filed all the necessary details of expenditure, which is not accepted by the ld. AO for the reason best known to him and as such, this case is not fit for levy of penalty u/s 270A(9)(a) or 270A(9)(c) of the Act. Further, in penalty order, the authorities proceeded merely on the basis of findings in the quantum proceedings and have not independently examined the matter for levy of impugned penalty. Even on this procedural count, penalty levied cannot be sustained. Though the addition was made on adhoc basis that by its....