TaxTMI 
TaxTMI 
2024 (6) TMI 407
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.... appeal: 1. The Order of the Ld. Commissioner of Income Tax, (Appeals), NFAC, Delhi, 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)....
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....t was filed along with the return of income. The case was selected for scrutiny. During the course of scrutiny assessment, the ld.AO asked 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 disallowe....
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....enditure not substantiated by any evidence. The assessee was not able to substantiate its expenses with concrete evidences and it is clear that 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 misre....
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....cy found by the ld. AO as confirmed by the ld. CIT(A) do not come within the purview of under reporting of income and penalty cannot be levied. For 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 inc....
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.... any. Assessee has furnished the details for the same. On verification it is found that Expenses for the form work of Rs. 6529S6/- was paid to individual, however 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 de....
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....ty, he should give a fresh notice to the assessee, so as to give an opportunity of hearing to explain the case of the assessee under the limb which the CIT(A) has invoked. Admittedly, 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 independ....