TaxTMI 
TaxTMI 
2026 (9) TMI 614
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....fter referred to as 'the Act' in short) for Assessment Year 2019-20. 2. The Assessee has raised following grounds of Appeal: - "1. The learned CIT(A)/NFAC erred in law and on facts in upholding the penalty order passed under Section 270A of the Act, which is vitiated by a fundamental procedural defect in as much as the show cause notices dated 11/11/2024 and 02/04/2025 failed to specify which specific sub-clause of Section 270A(9) [clauses (a) to (f)) was being invoked against the Appellant. 2. That the learned CIT(A) has failed to consider binding judicial precedents holding that penalty is not leviable where additions are not made in the assessment order. 3. The learned CIT(A)/NFAC failed to appreciate that t....
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.... 'shall', indicating that levy of penalty is discretionary and not mandatory. 9. That the penalty proceedings are vitiated in law since the assessment order does not record any satisfaction or finding that the claim of deduction under section 80GGC was false, non-genuine or bogus in the hands of the Appellant. 10. That the impugned penalty is excessive, arbitrary and unjustified and is liable to be deleted in full. 11. That the Appellant craves leave to add, alter, amend, or withdraw any ground of appeal at the time of hearing." 3. Brief facts of the case are that the case of the Assessee was reopened u/s 147 of the Act based on the information with regard to search and seizure operation on 23 Registere....
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....gainst 23 RUPPs, wherein the modus operandi of these political parties was uncovered. Accordingly, the AO accepted the ITR of the Assessee filed u/s 148 without making any further addition; however, the AO was of the opinion that the Assessee has misreported his income in his original ITR and hence he initiated penalty proceedings u/s 270A(9) of the Act for under-reporting income in consequence of misreporting of income on the issue. 3.2 The AO, in the penalty proceeding vide order dated 23.05.2025 u/s 270A of the Act, imposed a penalty of Rs. 1,87,000/- being 200% of the tax on misreported income amounting to Rs. 93,600/-. 3.3 Aggrieved by the penalty order, the Assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) vide the ....
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....ed 15.05.2026. (ii) Niket Maheshbhai Shah v. ITO, ITA No. 2341/Ahd/2025 dated 15.05.2026. (iii) Siddharth Vaderkar v. ITO, ITA No. 1072/Ahd/2026 dated 07.07.2026 (iv) Nisha Darji v. ITO, ITA No. 759/Ahd/2026 dated 30.07.2026. (v) Sunny Varyani v. ITO, ITA No. 76/Ahd/2026 dated 30.07.2026." 6. Per contra, Ld. Senior DR has supported the order of the Ld. AO and Ld. CIT(A). He has submitted that but for the search on the RUPPs and pursuant to notice u/s 148 of the Act, the Assessee was not going to reveal that he had made a wrong claim u/s 80GGC of the Act. He further submitted that keeping in view the minuscule number of returns are selected for scrutiny, the Assessee took a chance of claiming wrong dedu....
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.... on the ground that the assessee had under-reported income in consequence of misreporting. 4. The contention of the Assessing Officer that the assessee had accepted the addition by not filing an appeal against the disallowance cannot, by itself, be a valid basis for concluding that there was misreporting of income. The mere fact that the assessee chose not to challenge the quantum addition due to the relatively small amount involved and in order to avoid prolonged litigation does not amount to an admission of concealment or furnishing of false particulars. It is well settled that penalty proceedings are distinct and independent from assessment proceedings, and the findings in the assessment order are not conclusive for the purpose ....