TaxTMI 
TaxTMI 
2026 (9) TMI 1392
X X X X Extracts X X X X
X X X X Extracts X X X X
....2. The Ld. Assessing Officer (Assessment unit) ('AO') erred in passing the Penalty Order u/s 270A of the Act dated 17 March 2023 on the name of the Appellant Company which has ceased to exist pursuant to the merger with Capgemini Technology Services India Limited wef. 1st April, 2020, duly approved by National Company Law Tribunal (NCLT') order dated 24 June 2021, thereby making the entire penalty proceedings as void-ab-initio and rendering the Penalty Order u/s 270A to be a nullity in the eyes of the law and liable to be quashed. Levy of Penalty with respect to disallowance of "Health and Educational Cess": 3. The CIT(A) has erred in confirming the penalty levied under section 270A of the Act for claiming deduction of Health and Education Cess by the Appellant which was supported by various Judicial precedents 4. The Ld. AO/CIT(A) has failed to appreciate that the claim of Health and Education Cess was made by Appellant in good faith and hence does not tantamount to under reporting of income as per the provisions of section 270A of the Act. 5. The Learned CIT (A) has failed to appreciate that the Appellant has voluntary filed a lette....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dings, was an amount of INR 14,90,132 on account of withdrawal of the claim of the payment of Health and Education Cess" 5. The Ld. AO alongwith issuance of the assessment order, also initiated penalty proceedings for alleged under-reporting of income out of mis-reporting of income on account of misrepresentation and suppression of facts. However, penalty amounting to INR 2,31,310 was levied on the Company on alleged underreporting of income. 6. The crux of the matter, i.e., the reason for levying penalty for alleged under-reporting of income, were the AO's observations that the 'tax liability on the disallowance of "Health and Education Cess is not discharged The relevant portions of the penalty order is reproduced hereinbelow: "As can be seen from the above letter of 22/06/2022, during the course of assessment proceedings, the assessee agreed for the disallowance of Rs. 14,90,132, being the 'Health & Education Cess claimed and also offered to pay taxes thereon. However, it is seen from the submissions of the assessee in response to the Show Cause Notices issued that the payment for the same has not been made by the assessee within t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Bang/2024 vi. Pertaining to non-applicability of penal consequences u/s 270A, if claim for deduction u/s 40(a)(ii) was suo-moto withdrawn - Global Coal and Mining Pvt. Ltd. v. NFAC [ITA No. 2682/Del/2024) vii. Pertaining to non-applicability of penal consequences in case more than one interpretation was possible-CIT v Calcutta Credit Corporation (1987) 166 ITR 29 (Cal) viii. Pertains to non-levy of penalty where the relevant provision was amended retrospectively, rendering the issue debatable and involving no failure to disclose material facts-CIT v Yahoo India Pvt Ltd [2013] 33 taxmann.com 332 (Bombay) ix. Pertaining to non-applicability of penal consequences in case of debatable tax position-CIT v Harshvardhan Chemicals and Minerals Ltd. (2003) 259 ITR 212 (Raj.) x. Pertaining to non-applicability of penal consequences in case of debatable tax position-CIT v Reliance Petroproducts (P) Lid (2010) 189 Taxman 322 (SC) xi. Pertaining to non-applicability of penal consequences in case of debatable tax position-CIT v. Gurdaspur Co-operative Sugar Mills Ltd. [2013] 35 taxmann.com 395 (Punjab & Haryana) xii. Pertaining to int....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) Additional cases being relied upon by the Appellant i. PCIT v. Maruti Suzuki India Ltd. [2019] 107 taxmann.com 375 (SC) ii. CLSA India (P.) Ltd. v. DCIT [2023] 149 taxmann.com 380 (Bombay) iii. Thermax Ltd. v. NFAC 170 taxmann.com 249 (Bombay) iv. Reliance Industries Ltd. v. P. L. Roongta [2025] 171 taxmann.com 467 (Bombay) v. Pico Capital Ltd. v. DCIT (P.) ν. [2023] 150 taxmann.com 488 (Bombay) vi. Bennett Coleman and Company Ltd. v. UOI [2023] 153 taxmann.com 21 (Bombay) Submission of ld.DR : 3. Ld.Departmental Representative(ld.DR) for the Revenue relied on the order of ld.CIT(A). Findings and Analysis: 4. We have heard both the parties and perused the records. The company Liquidhub India Private Limited was merged into Capgemini Technology Services India Limited vide Order of NCLT dated 24/06/2021 with effect from 1st April 2020. 4.1 In the case of Liquidhub India Private Limited the Assessing Officer has passed a Penalty Order u/s 270A of the Income Tax Act for AY 2020-21 on 17/03/2023 levying penalty of Rs. 2,16,963/-. 4.2 This appeal is against the said Penalty u/s. 270A of the Income Tax A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng the assessment proceedings for this year. We would also like to draw your goodself's kind attention to the provisions of section 155(18) of the Act, wherein it is stated that when an assessee has claimed a deduction of cess in the return of income for any previous year the same shall be deemed to be under-reported income of the assessee as per section 270A(3) of the Act. However, as per the Proviso to the said section, if the following criteria are fulfilled the claim of cess shall not be deemed to be under-reported income as per section 270A(3). The assessee shall suo moto make an application to the Assessing Officer in the prescribed form and within the prescribed time requesting for recomputation of the total income of the previous year without allowing the claim for deduction of surcharge or cess and, the assessee pays the amount of tax due thereon, if applicable, within the specified time. The aforesaid prescribed form to make the application has not been notified till date. Once the form is notified, the assessee shall file the relevant form within the specified time and pay the appropriate amount of tax, if applicable, on the amount of cess ....