TaxTMI 
TaxTMI 
2026 (7) TMI 560
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....come in consequence of misreporting' without giving any reason or finding and fails to demonstrate as to how the appellant's cause of default / instance for penalty falls under clauses (a) to (f of subsection (9) of section 270A, which lays down specific instances of 'misreporting of income' 3) In not appreciating that cause of default for imposing penalty in appellant's case does not fit in cases of 'misreporting of income' cited in section 270A(9) at all and hence is of no consequence that results in 'underreporting of income 4) In disregarding the fact that penalty order of AO, was passed without application of mind, in a mechanical manner and in violation of natural justice, when due to specific reason beyond the appellant's control, the appellant had been prevented to achieve due compliance to file the return of income under the category of AOP and had no mala fide intention in not filing of return in response to notice issued by AO under section 148 of the Income tax Act 5) In disregarding the fact that appellant had offered explanation which was true and bona fide and all facts relating to not filing of return of income ....
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.... did not allow the said deduction and assessed the aforesaid amount as taxable income. 2.1.2. Consequently, penalty proceedings u/s. 270A of the Act were initiated and penalty was levied for alleged under-reporting of income in consequence of misreporting. The assessee is in appeal against the levy of penalty, contending that the failure to claim deduction was due to a bona fide technical error arising from incorrect PAN classification and not due to any concealment or misreporting of income. Against the penalty order passed by the Ld.AO the assessee preferred appeal before the Ld.CIT(A). 2.3. The Ld.CIT(A), after considering the submissions of the assessee held as under: "5. Observation & Decision: I have carefully perused and considered the penalty order, the statement of facts and written submission of the appellant. Having so considered, the grounds of appeals raised by the appellant are decided as under - 5.1 Grounds of appeal: The grounds of appeal are reproduced below for adjudication. "1. The Learned AO has erred in levying penalty of Rs. 323472/- under section 270A of the Act 1961. 2. The Appellant craves leave to add, ....
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....us of obtaining a correct PAN and ensuring compliance with ITR filing provisions lies solely with the appellant. Having failed to do so, the appellant cannot shift the responsibility to the Department or seek any relief. 5.2.3 In light of the above facts, total income was assessed by the AO for the first time during re-assessment proceedings on the basis of material available on record. As per the provisions of section 270A(2)(b), where no return of income has been furnished by the assessee/appellant and income is assessed for the first time, such assessed income shall be deemed to represent under-reported income for the purposes of levy of penalty u/s 270A. Therefore, the conditions specified in section 270A(9)(a) r.w.s. 270A(8) are squarely attracted. Accordingly, the levy of penalty u/s 270A for under-reporting of income in consequence of mis-reporting is fully in accordance with law, and the AO was justified in initiating and imposing the same. 5.2.4 In view of the above facts, law and discussion, there is no merit in the ground of appeal. Thus, the penalty levied by the AO u/s 270A is factually valid and in accordance with law and there is no scope for any in....
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....of misreporting". It was argued that the AO failed to specify the particular limb of section 270A(9) under which the alleged misreporting fell and failed to establish satisfaction of the conditions prescribed therein. Accordingly, the Ld.AR prayed that the penalty levied u/s 270A of the Act be deleted, as the assessee's explanation was bona fide and the alleged default was merely technical in nature. 3.5. On the contrary, the Ld.DR supported the order passed by the Ld. CIT(A) and submitted that the assessee had neither filed the return of income within the prescribed time u/s 139(1) of the Act nor furnished any return in response to the notice issued u/s 148 of the Act. Accordingly, the income assessed during the reassessment proceedings represented the first determination of income, and the provisions of section 270A of the Act were rightly invoked. 3.6. The Ld. DR submitted that the assessee's claim that it could not file the return or claim deduction u/s 80P due to incorrect PAN status cannot be accepted, as the responsibility to comply with statutory filing requirements and maintain correct PAN details rests upon the assessee. Since no valid return was available on rec....