2025 (10) TMI 286

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....ed u/s 270A of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') dated 13.03.2023 by the Assessing Officer, Assessment Unit, Income Tax Department (hereinafter referred to as 'ld. AO'). 2. Though the assessee has raised several grounds of appeal before us, the only effective issue to be decided in this appeal is as to whether the learned CITA was justified in confirming the levy of penalty under section 270A of the Act in respect of claim of deduction on account of education cess in the facts and circumstances of the instant case. 3. We have heard the rival submissions and perused the materials available on record. The assessee company is engaged mainly in the manufacture of polyester chips of all grades, biaxially orien....

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....claim was suo motu withdrawn by it during quantum assessment proceedings considering the amendments proposed in the Finance Bill. Further the assessee also gave detailed legal justification for non-levy of penalty by virtue of provisions of section 270A(6) of the Act. The learned AO however did not heed to these contentions of the assessee and ultimately penalty under section 270A of the Act was levied in the sum of Rs 61,61,942/- for under reporting of income calculated @ 50% of tax on under -reported income of Rs 4,89,66,487/- on account of deduction claimed for education cess on the following grounds:- a) that the assessee relied upon various case laws which stood nullified by the subsequent amendment in law ; b) that t....

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....on for education cess with retrospective effect from 1-4-2005. Simultaneously, section 155(18) of the Act was inserted whereby the assessee was granted time to suo motu withdraw its claim of deduction of education cess, by way of an application in the prescribed form, in order to avoid penalty under section 270A of the Act. f) On 1-10-2022, in line with the aforesaid provision, Rule 132 was inserted in the Income Tax Rules, 1962 providing as follows:- (i) Application for withdrawal of claim of deduction to be made by assessee in Form No. 69 by 31-3-2023 ; (ii) The learned AO to recompute the total income considering withdrawal of such claim and to determine tax payable by the assessee by way of a demand notice ; a....