2026 (3) TMI 1611

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....is as to whether the ld CIT(A) was justified in confirming the levy of penalty u/s 270A of the Act in the facts and circumstances of the instant case. 3. We have heard the rival submissions and perused the material available on record. The assessee furnished the return of income for AY 2017-18 on 16.03.2018 declaring total income of Rs. 4,93,460/-. The same was processed u/s. 143(1) of the Act on 8.4.2018. The case of the assessee was taken up for Compulsory Manual Scrutiny for AY 2017-18 as survey was conducted on assessee on 21.4.2016. The assessee is individual Prop. Of M/s Ridhi Sidhi Impex. The assessee was involved in accommodation entry business and shown commission income during the year under consideration. Later assessment u/s.....

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....isper of the 'misreporting' by the AO. The AO failed to state, both in the notice as well as in the penalty order, as to how the assessee's case /addition falls within instances given in Clauses (a) to (f) of Sub-section (9) of Section 270A of the Act and, therefore, the impugned notice issued u/s. 270A being vague notice and thus liable to be quashed. In the instant case, from the perusal of the penalty notice placed on record dated 27.12.2019, it is evident that the AO had show caused the assessee as to why the assessee should not be imposed with penalty for 'under reporting of income'. AO recorded satisfaction in the quantum assessment order that offence of both 'under reporting' and 'mis-reporting' is committed by the assessee and there....

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....ave failed to specify the limb "under-reporting" 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 ingredients 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." 5. Further, the Hon'ble Delhi High Court in the case of PCIT vs. Jaina Marketing and Associates has dealt the exactly similar and identical issue in favour of the assessee by observin....