2026 (8) TMI 1415

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.... Act by the JCIT, Assessment Unit, New Delhi for A.Y. 2017-18. 2. The grounds raised by the assessee are as under : 1. "That the learned CIT(A) has erred both in law and on facts in confirming the penalty of Rs. 13,41,118/- levied under section 270A of the Income-tax Act, 1961, which is illegal, unjustified and liable to be deleted. 2. That the learned CIT(A) failed to appreciate that the addition forming the basis of penalty arose from a debatable and interpretational issue relating to applicability of TDS provisions, and therefore the same could not be treated as "under-reporting of income" within the meaning of section 270A. 3. That the authorities below erred in law in imposing and confirming the penalty wi....

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....he order of the CIT(A), the assessee is now in appeal before us. 5. Before us, the ld. Counsel for the assessee submitted that the addition was made on account of applicability of TDS provisions. Accordingly, the AO had levied penalty under section 270A of the Act. Further ld. Counsel for the assessee submitted that the addition was made on the basis of interpretation of TDS provisions. 6. Per contra, ld. DR relied on the orders of the AO and CIT(A). 7. We have heard the rival submissions and perused the material available on record. The facts are that the assessee company made lease rental payment amounting to Rs. 2,98,02,618/-, during the year, to GNIDA and claimed the same as expenses. The question was whether the assessee made ....

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....s been levied on the sole ground that the quantum addition has been confirmed by the appellate authority. We find that neither the AO nor the CIT(A) has given a finding u/s 270(6)(a) that the assessee's explanation is not bona fide and the assessee has not disclosed all the material facts to substantiate the explanation offered. We therefore are inclined to agree with the assessee that the deduction from payment made to GNOIDA u/s 194I was a debatable and interpretational issue relating to applicability of TDS provisions, and therefore the same could not be treated as "under-reporting of income" within the meaning of section 270A. We are also fortified by the decision of the hon'ble Supreme Court in the case of CIT v. Reliance Petroproducts....