TaxTMI 
TaxTMI 
2026 (1) TMI 77
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....he levy of penalty u/s. 270A of the Act. 2. It was a common ground that the default for which penalty was levied in both the appeals was identical. Therefore, it stated that in both the appeals common arguments needed to be advanced against the levy of penalty. Both the appeals were therefore taken up for hearing and are being disposed of by vide this common consolidated order. 3. For the sake of convenience, the facts relating to the appeal of the assessee in ITA No.909/JP/2025 pertaining to assessment year 2017-18 are being considered for adjudication and our judgment rendered in the said case will apply mutatis mutandis to the other appeal of the assessee also in ITA No 910/JP/2025 for A.Y 2018-19. 4. ITA No.909/JP/2025 A.Y 2017....
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....ork in progress, he held that the authenticity of expenses incurred to have remained unverifiable. 7. The assessee was show caused as to why the books of account maintained by the assessee should not be rejected by invoking Section 145(3) of the Act and the lump sum disallowance of Rs. 5 lacs of expenses be not made. The assessee merely submitted impossibility of maintaining site-wise accounts considering the nature of business of the assessee. Accordingly, the disallowance of Rs. 5 lacs of expenses was made to the income of the assessee and penalty proceedings initiated u/s. 270A of the Act for 'underreporting of income'. 8. Similarly, the AO noted the assessee to have made interest payment of Rs. 1,27,420/- without deducting tax at ....
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.... Penalty for under-reporting and misreporting of income. 270A. ...................... (2) A person shall be considered to have under-reported his income, if- (a) the income assessed is greater than the income determined in the return processed under clause (a) of sub-section (1) of section 143; (b) the income assessed 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; (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 ....
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.... ........ ........ (b) the amount of under-reported income determined on the basis of an estimate, if the accounts are correct and complete to the satisfaction of the Assessing Officer or the Commissioner (Appeals) or the Commissioner or the Principal Commissioner, as the case may be, but the method employed is such that the income cannot properly be deduced therefrom; 13. It was pointed out that as per the law any 'underreported income' determined on the basis of estimate is to be excluded for the levy of penalty u/s. 270A of the Act only if the accounts are correct and complete to the satisfaction of the AO but the method employed is such that the income cannot be properly deduced therefrom. Learned counsel for ....