TaxTMI 
TaxTMI 
2025 (2) TMI 41
X X X X Extracts X X X X
X X X X Extracts X X X X
....peal. 3. The brief facts of the case are that assessee has filed its return of income declaring total income of Rs. 87,57,240/-. During the course of assessment proceedings, the AO has made the following additions. i. Addition of Rs. 2,35,839/- on account of late payment of Employees Contribution to PF & ESI. ii. Disallowance u/s. 40(a)(ia) of the Act of s.68,277/- Accordingly, the AO has recorded satisfaction for initiation of penalty proceedings u/s. 270A of the Act, for "under-reporting of income which is in consequences of mis-reporting of income". In the penalty proceedings, after taking the submission of the assessee on record, the AO confirmed the penalty for "under-reporting of income which is in consequences of mis-reporting thereon" for a sum equal to 200% of the amount of tax payable as per the provisions of section 270A(8) of the Act. While passing the order the AO made the following observations: 5. As the assessee has under reported its income which is in consequences to misreporting thereon for the year under consideration, the penalty for under reporting of income which is in consequences to misreporting thereon shall be a sum equal to 200% of the amount of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Act for the relevant assessment year dated 16.03.2022 by levying penalty amounting to Rs,2,01,000/- for "underreporting of income which is in consequence of misreporting thereon" mentioning that the Ld. AO has recorded satisfaction for the initiation of penalty u/s 270A of the Act. Further, the AO has imposed penalty @200% on the amount of tax payable as per the provisions of Section 270A of the Act. The provisions of section 270A(2) of the Act deals with levy of penalty for under-reporting of income and this section typically involves discrepancies such as omission or inaccuracies not involving deliberate misrepresentation. In this case a lower penalty @50% of tax is levied. However, penalty u/s. 270A(8)/(9) involves cases of wilful suppression or misstatement or misrepresentation of facts, thereby attracting more severe penalty @200% of the amount of tax payable. Various courts have consistently held that the penalties under section 270A of the Act, requires precise classification and income adjustment cannot attract penalty both u/s. 270A(2) of the Act as well 270A(9) of the Act. It would be useful to reproduced some of the judicial precedents which have thrown useful light on ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng of income" whereas the penalty has been levied ultimately for both 'under reporting' and 'misreporting of income @ 200% in terms of section 270A(9) of the Act, for which show cause notice was never issued to the Assessee. And therefore in view of the judgment passed by the co-ordinate Bench of the Tribunal in the case of Jaina Marketing & Associates (supra), wherein the Co-ordinate Bench of the Tribunal not only analyzed the provisions of law but also considered the judgments of the Higher Courts and the Tribunal and deleted the identical penalty as involved in this case, hence respectfully following the decision of the Tribunal, we are inclined to delete the penalty under consideration. Thus, the penalty is deleted and appeal filed by the Assessee is allowed. 9. As we have deleted the penalty, hence not dwelling into other aspects of the case, as extensively argued by the parties, as adjudication of the same would be futile exercise. iii. Hon'ble Delhi High Court in the case of GE Capital Us Holding Inc Vs. DCIT(International Taxation) Circle 1(3)(1), New Delhi vide W.P(C) 1646/2022 dated 31.05.2024 has made the following observations: 31. We are further const....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 270A(2) r.w.s. 270A(9) of the income come Tax Act, 1961 on the under reported income of Rs. 3,04,116/-on the basis of the merit in the case of the assessee 11. Accordingly, from the contents of the notice for initiating penalty proceedings as well as appellate order u/s. 270A of the Act, the AO has no clarity under which specific limb of section 270A the AO is proceeding to levy penalty. Therefore, in view of the well settled Judicial precedents on the subject as cited above and in the absence of any clarity on specific limb u/s. 270A of the Act, where the penalty have been levied on the assessee, in our considered view penalty u/s. 270A of the Act is not liable to be sustained. 12. Another notable issue for consideration before us is that while levying the penalty u/s. 270A of the Act @200% which is levied for offences of penalty committed u/s. 270A(9) of the Act, it is observed that the AO has not specified which specific offence under section 270A(9) of the Act has been committed by the assessee. It would be useful to reproduce the relevant extract of section 270A(9) of the Act for ready reference. (9) The cases of misreporting of income referred to in sub-section (8) shall....