TaxTMI 
TaxTMI 
2026 (9) TMI 1543
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....filed its return of income for the year under consideration. The case of the assessee was reopened on the basis of information that the assessee has made huge transactions of Rs. 19,79,26,102/- during the relevant financial year. The assessee in response to the notice issued u/s 148 of the Act dated 29.02.2024 filed its return of income on 11.05.2024 declaring total income at Rs. 27,17,950/-. The Assessing Officer completed the assessment accepting the returned income. However, the Assessing Officer initiated penalty proceedings u/s 270A(3) of the Act and accordingly a notice u/s 274 r.w.s. 270A(3) of the Act was issued and served on the assessee for under-reporting of income thereof. Rejecting the various explanations given by the assessee, the Assessing Officer levied penalty of Rs. 27,17,950/- u/s 270A(3) of the Act on the ground that the assessee filed return of income in response to the notice u/s 148 of the Act. 3. In appeal, the Ld. CIT(A) / NFAC upheld the penalty levied by the Assessing Officer by observing as under: 7.1.1 I have perused the submissions of the appellant as well as the assessment order. The only contention of the appellant is this that once the ....
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....order of the Ld. CIT(A) / NFAC the assessee is in appeal before the Tribunal by raising the following grounds: 1. In the facts of the case and under the circumstances and in law, the Ld. CIT(A) has erred in upholding levy of penalty under section 270A(3) for under reporting of income without appreciating section 270A(6)(a) which states that no penalty shall be levied for bonafide actions and disclosure of material facts by the assessed. Hence the order passed is bad and therefore, deserves to be quashed. 2. In the facts of the case and under the circumstances and in law, the Ld. CIT(A) has erred in upholding levy of penalty under section 270A(3) for under reporting of income without appreciating the replies filed by the appellant during the course of proceedings, thereby violating the principles of natural justice. The impugned order thus is not a speaking / reasoned order, and hence, needs to be quashed. 3. In the facts of the case and under the circumstances and in law, the Ld. CIT(A) has erred in upholding validity of the Show cause notice (the SCN) u/s 274 r.w.s. 270A, as the notice is vague, with no specific charge and with no specific mention of the....
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....rder. However, the reason for allegation made, amount of income sought to be under-reported, tax on such under-reported income and the percentage and the amount of penalty sought to be demanded are not available in the show cause notice issued by the Assessing Officer. He accordingly submitted that the penalty levied by the Assessing Officer and sustained by the Ld. CIT(A) / NFAC is not justified. 7. The Ld. DR on the other hand heavily relied on the order of the Ld. CIT(A) / NFAC. 8. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. It is an admitted fact that the assessee has not filed its return of income for the impugned assessment year and filed the return of income only in response to the notice issued u/s 148 of the Act. It is also an admitted fact that the returned income has been accepted without making any addition after considering the submissions made by the assessee from time to time. It is also an admitted fact that the assessee has paid advance tax and self assessment tax....
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.... assessee has made huge transactions amounting to Rs. 17,79,26,102/- but failed to get its books of account audited u/s 44AB of the Act within the stipulated time, the Assessing Officer initiated penalty proceedings u/s 271B of the Act. The assessee in its reply filed on 06.01.2025 and 04.04.2025 has stated that the audit report u/s 44AB was filed by the assessee on 11.01.2022 which was furnished during the assessment proceedings, therefore, the penalty proceedings initiated u/s 271B of the Act should be dropped. However, the Assessing Officer rejected the explanation given by the assessee and levied penalty of Rs. 1,50,000/- u/s 271B of the Act. 13. In appeal, the Ld. CIT(A) / NFAC upheld the penalty levied by the Assessing Officer by observing as under: 7.1.2 I have carefully perused the submissions of the appellant as well as the penalty order. In this regard, it is pertinent to mention that for the first time, the appellant filed return of income in response to the notice issued u/s 148 of the Act. For the year under consideration, the assessee had a total turnover/sales of Rs. 6,06,74,412/ -. Therefore, the assessee was under statutory obligation to get it....
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....nal in the said decision has deleted the penalty levied u/s 271B of the Act on the ground that the returned income was accepted by the Assessing Officer which shows that no prejudice was caused to the Assessing Officer on account of delay in submission of the tax audit report. It has been held that the delay in filing of tax audit report is merely a technical breach of law, which does not warrant levy of penalty u/s 271B of the Act. He accordingly submitted that the penalty levied by the Assessing Officer and sustained by the Ld. CIT(A) / NFAC be deleted. 17. The Ld. DR on the other hand heavily relied on the order of the Ld. CIT(A) / NFAC. 18. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. It is an admitted fact that due to delay in filing of the tax audit report the Assessing Officer levied penalty of Rs. 1,50,000/- u/s 271B of the Act which has been upheld by the Ld. CIT(A) / NFAC. It is the submission of the Ld. Counsel for the assessee that due to the disputes between the direct....