TaxTMI 
TaxTMI 
2026 (9) TMI 768
X X X X Extracts X X X X
X X X X Extracts X X X X
...."learned CIT(A)"], which in turn arose from the penalty order passed under section 270A of the Act, for the assessment year 2020-21. 2. In this appeal, the assessee has raised the following grounds: - Grounds of Appeal 1: Erroneous levy of penalty u/s 270A for inadvertent claim us 80P. The Learned CIT(A) erred in confirming penalty of 200% under Section 270A on the alleged ground of "misreporting of income," without appreciating that the incorrect claim of deduction u/s 80P(2)(b) was an inadvertent, bona fide error committed by the erstwhile consultant and not a deliberate attempt to conceal or misreport income. The Appellant had, on identification of the error, voluntarily discharged the entire tax liability a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ood faith and rectified errors promptly. Grounds of Appeal 2: Erroneous levy of penalty u/s 270A for inadvertent Omission of Dividend Income from "Income from Other Sources". The erstwhile Tax Consultant inadvertently omitted dividend income of Rs. 4,26,000 received during the year from being declared under the head "Income from Other Sources." Upon realization, the appellant paid the appropriate tax and interest. The dividend income was inadvertently left out due to an oversight, and no mala fide intention is involved. The appellant has already deposited the tax and interest due on this amount vide challan No. 02218 dated 29-01-2024. This payment reflects the Bonafide conduct and compliance by the appellant. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e order dated 26.09.2022, passed under section 143 r.w.s. 144B of the Act held that the interest income earned by the assessee society from Nationalised Banks and Cooperative Banks does not qualify as income which is forming part of the profits and gains of the assessee from activities prescribed under the Act. Accordingly, the AO disallowed the deduction claimed under section 80P(2)(d) of the Act. As regards the deduction claimed under section 80M of the Act, the AO held that the same only pertains to a company and is not available to the assessee being a cooperative society. Accordingly, the deduction claimed in respect of the dividend income under section 80M of the Act was disallowed. The AO also made the disallowance in respect of empl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ell before passing the impugned order. As regards the deduction claimed under section 80M of the Act in respect of dividend income, the assessee made similar submission that the erstwhile tax consultant inadvertently omitted dividend income received during the year under consideration from being declared under the head "income from other sources". The learned AR submitted that the said mistake was totally on account of oversight and no mala fide intention is involved. It was submitted that immediately upon identification of the mistake, the assessee deposited the due tax and interest on 29.01.2024, i.e. before passing of the impugned order by the learned CIT(A). Accordingly, the learned AR submitted that since the assessee has voluntarily p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... under section 80P(2)(d) of the Act in respect of interest earned from Nationalised Banks and deduction claimed under section 80M of the Act in respect of dividend income earned during the year under consideration. It is pertinent to note that till the conclusion of assessment proceedings, the assessee did not drop its claim of the aforementioned deductions under section 80P(2)(d) and section 80M of the Act. It is further pertinent to note that the assessee, even during the penalty proceedings, contested the initiation of penalty proceedings under section 270A of the Act on the aforementioned issues. As is evident from the perusal of the record, only during the pendency of its appeal against the penalty order passed under section 270A of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rting of income which is in consequence of misreporting thereof. In such circumstances, the statute mandates levy of penalty at 200% of the amount of tax payable on under-reported income. Therefore, from the perusal of the provisions of section 270A of the Act, we find that even though the decision to levy penalty is at the discretion of the AO, however, once the same is exercised in affirmative and the AO arrived at the conclusion that the under-reporting of income is in consequence of misreporting of income then the section specifically mandates levy of penalty @200% under section 270A(8) of the Act. Thus, the provisions of section 270A of the Act do not provide any leeway when it comes to levy of penalty for under-reporting of income whi....