TaxTMI 
TaxTMI 
2025 (9) TMI 585
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.... aside the order dated 31.05.2023 passed under Sec. 270AA(4) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'), whereby, the respondent has rejected the application of petitioner to grant immunity from penalty proceeding carried out under Sec. 270A(9) of the Act. 5. Brief facts of the case are as under: 5.1 The petitioner is an agriculturist and is not normally assessed to income tax as the petitioner is not liable to file the return of income for earnings derived from agriculture income. The petitioner, therefore, did not file the return of income for the Assessment Year 2018-19. 5.2 It is the case of petitioner that a show-cause notice under Sec. 148A(b) of the Act dated 21.03.2022 was issued by the respondent as to why notice under Sec. 148 of the Act should not be issued as the petitioner did not file the return of income though the petitioner had sold immovable property during the Assessment Year 2018-19 for a consideration of Rs. 2,60,00,000/- on which TDS was also deducted. 5.3 In response to the show-cause notice, by a reply dated 29.03.2022, wherein the petitioner admitted that he had sold an agricultural land along with other co-owners on 05.1....
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....of the reassessment proceedings, the income would have escaped the assessment. It was also observed by the respondent in the impugned order that the contention of the petitioner that the order under Sec. 270AA(4) of the Act is not passed within one month as the application of the petitioner was received on 12.04.2023 and as per provision of Sec. 270AA(4) of the Act, it is clear that such order shall be passed within one month from the end of the month in which the application was received and the said period of one month expired on 31.05.2023 and as the petitioner sought time which was granted, the matter would not get time barred. 5.10 On merits it was observed by the respondent that provision of Sec. 270AA(3) of the Act is clear to the effect that the penalty proceedings initiated under Sec. 270A(9) of the Act does not find its place for immunity under Sec. 270AA(1) read with Section 270AA(3) of the Act. 6. Learned Advocate Mr. Dhinal Shah for the petitioner submitted that the case of the petitioner would fall under Sec. 270A(2)(b) of the Act and not under Sec. 270A(9) of the Act. It was submitted that the petitioner has filed the return of income for the first time under S....
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....s the respondent has failed to specify as to whether the penalty is initiated under reporting or misreporting as the ground for initiation of penalty is under reporting as a consequence of misreporting and both under reporting and misreporting cannot co-exist in view of the separate provision being Sec. 270A(2) read with Sec. 270A(9) in the Statute. 6.2 It was therefore submitted that the petitioner is entitled to immunity from levy of the penalty under Sec. 270A(9) though a penalty at the best can be under Sec. 270A(2) of the Act. 7. On the other hand learned Senior Standing Counsel Ms. Maithili Mehta for the respondent submitted that admittedly, the petitioner did not file the return of income for the year under consideration, but for the issuance of notice under Sec. 148 of the Act, the petitioner would not have filed the return of income and would not have paid tax and interest resulting into escapement of the income, and therefore, if he is under reporting as a consequence of misreporting of income, the respondent authority has rightly rejected the application for immunity under Sec. 270AA(4) of the Act. 7.1 In support of such submissions, learned Senior Standing Coun....
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....scaped assessment, is being initiated separately. 11. I state that penalty proceedings which came to be initiated for mis-reporting of the income have resulted in initiating proceedings under section 270A(9) of the act. Based on the said circumstances the authority has passed the order rejecting immunity from passing the penalty proceeding which stood initiated under section 270A(9) of the act 12. I state that penalty proceedings are initiated u/s 270A(9) of the Act in the case of the petitioner and in response to the same. assessee filed application seeking immunity from penalty As per the provisions of section 270AA of the Act, immunity cannot be granted, if penalty was initiated u/s 270A(9) of the Act. Further, during proceedings, opportunity of being heard was also provided to the assessee Thereafter, order of rejection of immunity from penalty was passed on 31.05.2025. Therefore, the said order is passed as per the provisions of section 270AA of the Act. 13. I state that after issuance of notice u/s 148 of the Act, the assessee has filed ITR in response to notice u/s 148 of the Act. declaring total income of Rs. 20,85,579/ The assessee has offered sa....
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....x, 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 return has been furnished for the first time under section 148; (f) the amount of deemed total income reassessed as per the provisions of section 115JB or section 115JC, as the case may be, is greater than the deemed total income assessed or reassessed immediately before such reassessment; (g) the income assessed or reassessed has the effect of reducing the loss or converting such loss into income. XXX XXX XXX (8) Notw....
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....e said section 270A. (4) The Assessing Officer shall, within a period of one month from the end of the month in which the application under sub-section (1) is received, pass an order accepting or rejecting such application: Provided that no order rejecting the application shall be passed unless the assessee has been given an opportunity of being heard. (5) The order made under sub-section (4) shall be final. (6) No appeal under section 246A or an application for revision under section 264 shall be admissible against the order of assessment or reassessment, referred to in clause (a) of sub-section (1), in a case where an order under sub-section (4) has been made accepting the application." 9. On perusal of the above provisions, it is clear that Sec. 270A provides for penalty for under-reporting and misreporting of income. Sub-section (2) of Sec. 270A provides for under-reporting of income whereas sub-section (3) to (7) of Sec. 270A provides for computation of the unreported income and levy of the penalty upon such unreported income. Sub-sec.8 and 9 provides for misreporting of income and levy of penalty on the misreported income. Thus, there ar....
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....d under Section 270A of the Act for misreporting of income is not only erroneous but also arbitrary and bereft of any reason as in the penalty notice the Respondents have failed to specify the limb "underreporting" or "misreporting" of income, under which the penalty proceedings had been initiated. 7. This Court also finds that there is not even a whisper as to which limb of Section 270A of the Act is attracted and how the ingredient of sub-section (9) of Section 270A is satisfied In the absence of such particulars, the mere reference to the word "misreporting" by the Respondents in the assessment order to deny immunity from imposition of penalty and prosecution makes the impugned order manifestly arbitrary. 8. This Court is of the opinion that the entire edifice of the assessment order framed by Respondent No 1 was actually voluntary computation of income filed by the Petitioner to buy peace and avoid litigation, which fact has been duly noted and accepted in the assessment order as well and consequently, there is no question of any misreporting. 9. This Court is further of the view that the impugned action of Respondent No.1 is contrary to the avowed Le....