TaxTMI 
TaxTMI 
2026 (5) TMI 1207
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....sing Officer had issued notices under section 142(1) calling for certain details and information from the assessee. According to the Assessing Officer, there was non-compliance on the part of the assessee with regard to the aforesaid notices and consequently penalty proceedings under section 272A(1)(d) were initiated and penalty of Rs. 20,000/- came to be levied for two alleged defaults. The learned CIT(A) too confirmed the levy of penalty primarily on the reasoning that the assessee had failed to establish any reasonable cause for such non-compliance despite opportunities having been granted during the appellate proceedings also. 3. Before us, the learned counsel for the assessee vehemently submitted that both the authorities below have proceeded on an entirely erroneous assumption of facts inasmuch as there was no deliberate or wilful defiance of the statutory notices issued by the Assessing Officer. He submitted that on both the occasions, the assessee had duly responded and had sought adjournment through applications uploaded on the ITBA portal within time and copies of such adjournment applications have been placed in the paper book at pages 91 to 94. It was further submitt....
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....ted by incorrect appreciation of facts. Accordingly, considering the entirety of facts and circumstances of the case and the documentary evidences placed before us evidencing compliance on the ITBA portal as well as subsequent furnishing of details before the Assessing Officer, we are of the considered opinion that the levy of penalty of Rs. 20,000/- under section 272A(1)(d) is unsustainable and liable to be deleted. We order accordingly. ITA No.7984/Mum/2025 5. The aforesaid appeal has been filed by the assessee against the impugned order passed by the learned Commissioner of Income Tax (Appeals)/NFAC for the assessment year 2022-23, arising out of penalty proceedings initiated under section 270A of the Income Tax Act, 1961, whereby penalty of Rs. 32,971/- has been levied on account of alleged under-reporting of income pertaining to income assessable under the head "Income from House Property". 6. Briefly stated, the facts borne out from the records are that the assessee is an individual and had filed his return of income under section 139(1) declaring total income of Rs. 81,42,690/-. During the year under consideration, the assessee had derived income from salary, income....
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....y received only his one-third share of rental income amounting to Rs. 3,99,669/- in his own bank account. According to the assessee, while preparing the computation of income, the accountant inadvertently treated the said amount itself as the total gross rental receipt and thereafter further divided the same into three parts on the assumption that it represented the aggregate rent of all co-owners. Consequently, instead of considering the gross annual value at Rs. 11,99,097/- and thereafter computing one-third share thereof, the accountant restricted the gross annual value itself to one-third of Rs. 3,99,669/- and thus declared income from house property at Rs. 93,247/- after claiming statutory deduction under section 24. The assessee consistently maintained that the entire discrepancy had occurred only due to a bona fide computational and arithmetical mistake committed inadvertently by the accountant and there was neither any concealment of income nor furnishing of inaccurate particulars. 9. It was further brought on record that during the course of assessment proceedings itself, the assessee had candidly admitted and accepted the aforesaid computational error vide submissions ....
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.... between assessed income and returned income, the assessee falls within the ambit of section 270A(2). The Assessing Officer further referred to the decision of the Hon'ble Supreme Court in the case of Union of India vs. Dharmendra Textile Processors for the proposition that mens rea is not an essential ingredient for levy of civil penalty and also observed that section 273B does not provide immunity from penalty under section 270A on account of reasonable cause. The Assessing Officer further held that since the assessee had not challenged the assessment order, it amounted to acceptance of the addition made in assessment proceedings. According to the Assessing Officer, the explanation furnished by the assessee was merely an afterthought and an attempt to justify suppression of income. On this reasoning, penalty at the rate of 50% of tax payable on under-reported income amounting to Rs. 32,971/- came to be levied under section 270A of the Act. 12. Before the learned CIT(A), the assessee reiterated the submissions advanced before the Assessing Officer and assailed the levy of penalty both on factual as well as legal grounds. It was submitted that the entire addition had arisen only....
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....he rental income derived therefrom. It is also not in dispute that the assessee had duly disclosed the Leave and License Agreement, details of the jointly owned property, rental arrangement, bank account particulars and all primary facts before the Assessing Officer during the course of assessment proceedings. Thus, there was neither any suppression of primary facts nor any attempt to withhold the material particulars relating to the rental income from the Department. 15. The entire addition has arisen only because while computing the taxable income under the head "Income from House Property", the accountant of the assessee inadvertently treated the amount of Rs. 3,99,669/-, being the assessee's one-third share of rent already received by him, as the total gross rental receipt and thereafter erroneously divided the same once again into three parts while preparing the computation of income. This arithmetical and computational mistake resulted into declaration of lesser income from house property at Rs. 93,247/- instead of the correct taxable figure. However, immediately when the discrepancy was noticed during assessment proceedings, the assessee, vide submissions filed before the....
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....istakes committed during preparation of computation by professionals or accountants, when duly explained and supported by surrounding circumstances, cannot automatically be elevated to the level of concealment or misreporting warranting penal consequences. The Revenue has not brought any material whatsoever to establish that the assessee had derived any benefit through clandestine suppression of rental receipts or had attempted to camouflage the true nature of income. On the contrary, all the rental arrangements, ownership details and rental receipts were fully available before the Assessing Officer from the very inception of the scrutiny proceedings. Once the foundational facts themselves were transparently disclosed, merely because an erroneous computation was made while working out taxable income from house property, the same by itself cannot be construed as a deliberate act of under-reporting of income. 18. We further find considerable force in the contention of the assessee that the case squarely falls within the protective ambit of section 270A(6)(a). The assessee had furnished an explanation which, looking to the entirety of facts and circumstances, appears to be bona fid....