AI Drafter 
TaxTMI 
TaxTMI 
2026 (1) TMI 291
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....no vouchers for payments were prepared, but receipt of payments made by the assessee were available with the assessee. During further verification, the A.O found attendance register maintained by the assessee which was without any name and other site details. That register were having thumb impression of the labourers and since vouchers of payment were not available, though receipt of payments made by the assessee were produced before the A.O which according to him were false claim of expenses made by the assessee. Accordingly, he disallowed entire expenses of Rs. 25,58,400/- and initiated penalty u/s. 270A(1) r.w.s. 270A(9)(c) of the Act. 4. That further fact reveals as emanated from the penalty order u/s. 270A(1) of the Act, dated 24.01.2024, the Ld. CIT(Appeals)/NFAC had partially allowed the appeal of the assessee substantially and had held that the A.O was not justified in disallowing labour expenses to the tune of Rs. 25,58,400/-. However, on ad-hoc basis and considering the nature of business of the assessee, the Ld. CIT(Appeals)/NFAC restricted the disallowance @ 20% of Rs. 25,58,400/-. That all these while penalty proceedings were kept in abeyance and it was only after ....
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....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. (3) The amount of under-reported income shall be,- (i) in a case where income has been assessed for the first time,- (a) if return has been furnished, the difference between the amount of income assessed and the amount of income determined under clause (a) of sub-section (1) of section 143; (b) in a case where no return has been furnished,- (A) the amount of income assessed, in the case of a company, firm or local authority; and (B) the difference between the amount of income assessed and the maximum amount not chargeable to tax, in a case not covered in item (A); (ii) in any other case, the difference between the amount of income reassessed or recomputed and the amount of income assessed, reassessed or recomputed in a preceding order: Provided that where under-reported income arises out of determination of deemed total inco....
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....ed for the preceding year in the following order- (a) the preceding year immediately before the year in which the receipt, deposit or investment appears, being the first preceding year; and (b) where the amount added or deducted in the first preceding year is not sufficient to cover the receipt, deposit or investment, the year immediately preceding the first preceding year and so on. (6) The under-reported income, for the purposes of this section, shall not include the following, namely:- (a) the amount of income in respect of which the assessee offers an explanation and the Assessing Officer or the Commissioner (Appeals) or the Commissioner or the Principal Commissioner, as the case may be, is satisfied that the explanation is bona fide and the assessee has disclosed all the material facts to substantiate the explanation offered; (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 inco....
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....) of section 143 or assessed, reassessed or recomputed in a preceding order is a loss, the amount of tax calculated on the under-reported income as if it were the total income; (c) in any other case determined in accordance with the formula- (X-Y) where, X = the amount of tax calculated on the under-reported income as increased by the total income determined under clause (a) of sub-section (1) of section 143 or total income assessed, reassessed or recomputed in a preceding order as if it were the total income; and Y = the amount of tax calculated on the total income determined under clause (a) of sub-section (1) of section 143 or total income assessed, reassessed or recomputed in a preceding order. (11) No addition or disallowance of an amount shall form the basis for imposition of penalty, if such addition or disallowance has formed the basis of imposition of penalty in the case of the person for the same or any other assessment year. (12) The penalty referred to in sub-section (1) shall be imposed, by an order in writing, by the Assessing Officer, the Commissioner (Appeals), the Commissioner or the Principal Commissioner, as t....