TaxTMI 
TaxTMI 
2026 (9) TMI 589
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....ection 270A of the Income-tax Act, 1961 for the Assessment Year 2018-19. 2. The facts, in brief, are that a survey action under section 133A was carried out at the business premises of the assessee on 08.03.2019, during which certain loose papers and documents were found and impounded. The assessee, who was engaged in the business of granite slabs and tiles, had originally filed his return of income on 30.08.2018 declaring total income of Rs. 11,08,650/-. Subsequent to the survey, the assessee filed a revised return on 30.03.2019 declaring higher income, which included additional income offered with reference to unaccounted sales found during the course of survey. The assessment was thereafter completed under section 143(3) vide order da....
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....al placed on record. The core issue which arises for our consideration is whether penalty for misreporting of income under section 270A(8), carrying penalty at the rate of 200%, can be imposed when the penalty proceedings were specifically initiated and the statutory notice was issued only for under-reporting of income. 5. In order to appreciate the distinction, it would be relevant to refer to the statutory scheme of section 270A. Sub-section (1) provides, inter alia, that where a person has under-reported his income, he shall be liable to penalty in addition to tax, if any, on the under-reported income. More importantly, sub-sections (7), (8) and (9), which have direct bearing on the issue before us, provide as under: "(7) The....
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....hanced to 200%. Further, misreporting is not left as an amorphous or undefined expression; sub-section (9) exhaustively enumerates the circumstances which constitute misreporting. Therefore, before an assessee can be visited with the more stringent consequence contemplated under sub-section (8), the Assessing Officer has to form a charge that the under-reporting is attributable to one or more of the circumstances specified in sub-section (9), and the assessee must be put to notice of such charge. 7. Now, when we examine the facts of the present case in the backdrop of the aforesaid statutory framework, the infirmity in the penalty proceedings becomes apparent. In the assessment order, the Assessing Officer, after discussing the unaccount....
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....ng him with the specific charge contemplated under sub-sections (8) and (9). 9. The distinction assumes further significance because the nature of defence available to an assessee against under-reporting simpliciter may be materially different from the defence required against an allegation of misreporting under section 270A(9). In the latter situation, the assessee would necessarily be required to meet the specific allegation as to whether there was misrepresentation or suppression of facts, failure to record a receipt or investment, recording of a false entry, or any of the other circumstances expressly enumerated in sub-section (9). Unless the particular charge is communicated, an assessee cannot reasonably be expected to rebut an all....