TaxTMI 
TaxTMI 
2025 (3) TMI 1790
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....n confirming levy of penalty of Rs. 72,924/-, u/s 270A of the Income-tax Act, 1961 [hereinafter referred as to the "Act"] on the alleged ground of under reporting of income of Rs. 1,18,000/-, being disallowance of deduction claimed u/s 80IB(10) of the Act. The penalty confirmed is totally unjustified on facts as also in law and may kindly be deleted. 3. Your Honour's appellant craves leave to add, to amend, alter, or withdraw any or more grounds of appeal on or before the hearing of appeal." 3. Succinct facts are that the assessee, before us, is a partnership firm and filed his return of income for the year under consideration, on 16/10/2017, declaring therein total income of Rs. NIL. Subsequently, the return was selected for scrutiny and accordingly a notice u/s 143(2) was issued on 21/08/2018 and duly served upon the assessee. Subsequently, notices u/s 142(1) of the Act, dated 14/09/2019, calling for relevant details in connection with the reasons for selection were served on the assessee. The assessee made the necessary submissions on various dates, before the assessing officer. During the course of assessment proceeding, the assessee was asked to furnish the det....
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....set of facts, during the previous years, by the assessing officer, therefore, with this impression, the assessee claimed deduction u/s.80IB(10) of the Act and hence, there was no any intention for under reporting of income, due to misreporting. 6. However, the assessing officer has rejected the contention of the assessee and held that in the assessee's case, the assessed income u/s.143(3) of the Act, is greater than that of the determined in the return processed, under clause(a) of sub-section 1 of Section 143 of the Act, therefore, assessee has underreported its income to the extent of Rs. 1,18,000/-. Accordingly, the assessee is liable to pay penalty on account of under reported income as a consequence of mis-reporting, therefore, the assessing officer imposed the penalty on the assessee to the tune of Rs. 72,924/-, under section 270A(8) of the Act. 7. Aggrieved by the order of the assessing officer, the assessee carried the matter, in appeal, before the Ld. CIT(A), who has confirmed the action of the assessing officer. The ld CIT(A) noticed that the facts of the assessee, make it clear that regular electricity and maintenance charges were sought to be passed off, as part o....
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.... the same deduction was allowed to the assessee in the previous years by the assessing officer. It is neither under reporting nor mis-representation of facts. The assessee, under consideration claimed the deduction u/s.80IB(10) of the Act, because, assessee has been allowed same deduction in the previous year, and the assessing officer allowed the deduction u/s.80IB(10) of the Act, based on the same facts and circumstances which is prevailing in the current assessment year, therefore, it is not under reporting and mis-reporting on the part of the assessee. However, this year the assessing officer has disallowed the deduction u/s.80IB(10) of the Act, that does not mean that the assessee has misrepresented the facts or under reported income. As per assessee's view, the deduction under section 80IB(10) of the Act, should be allowed to him, because, assessee has been allowed same deduction in the previous year, whereas, as per the opinion of the assessing officer, since certain conditions were not fulfilled, by the assessee, therefore, assessing officer disallowed the deduction u/s.80IB(10) of the Act, in the assessment year under consideration. On the basis of the detailed factual and....
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....it would be useful to reproduce the relevant extract of Section 270A of the Act for ready reference:- "(1) The Assessing Officer or the Commissioner (Appeals) or the Principal Commissioner or Commissioner may, during the course of any proceedings under this Act, direct that any person who has under-reported his income shall be liable to pay a penalty in addition to tax, if any, on the underreported income. (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 of section 115JB or section 115JC, as the case may be, is greater than the deemed total income determined in the return processed....
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....section 271AAB. (7) The penalty referred to in sub-section (1) shall be a sum equal to fifty per cent of the amount of tax payable on under-reported income. (8) Notwithstanding anything contained in sub-section (6) or sub-section (7), where underreported income is in consequence of any misreporting thereof by any person, the penalty referred to in sub-section (1) shall be equal to two hundred per cent of the amount of tax payable on under-reported income. (9) The cases of misreporting of income referred to in sub-section (8) shall be the following, namely:- (a) misrepresentation or suppression of facts; (b) failure to record investments in the books of account; (c) claim of expenditure not substantiated by any evidence; (d) recording of any false entry in the books of account; (e) failure to record any receipt in books of account having a bearing on total income; and (f) failure to report any international transaction or any transaction deemed to be an international transaction or any specified domestic transaction, to which the provisions of Chapter X apply. " 13. The term "under-reporting" i....
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....ct which deals with various circumstances relating to "under reporting of income". Therefore, since the assessee's case does not fall under sub-Section (2) of Section 270A, then the benefit of sub-Section (6) to Section 270A is also not available to the assessee. Therefore, the next issue for consideration is whether the assessee's case is one of misreporting of income and whether the case of assessee falls specifically under sub-Section (a) to Section 9 dealing with "misrepresentation or suppression of facts". Further, since sub-Section (a) to Section 270A specifically provides that "notwithstanding anything content in sub-Section (6)", where underreported income is in consequence of misreporting thereof by any person, the penalty shall be equal to 200% of the amount of tax payable on such under reported income. In the instant facts, certain facts are noteworthy. The first fact is that the purchaser, at the time of sale of property, property taxes had been effectively deducted at source at approximately 50% of the amount of taxes payable on such sale consideration. Secondly, the assessee was, in the instant facts, under a bona fide believe that she was not liable to pay ta....