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TMI Blog2024 (1) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... mittedly, the petitioner in its application under Section 270AA of the Act had sought personal hearing and the authority was bound to provide such personal hearing, however, admittedly no opportunity of hearing was provided to the petitioner. Authority had passed a wholly non-speaking order by only reiterating the provisions of sub-Section (3) of Section 270AA and indicated that the application was not found tenable, as penalty under Section 270AA of the Act has been initiated under the circumstances, referred to in sub-Section (9) of Section 270A of the Act. Nothing has been indicated as to under which sub-clause of Section 270A (9), the case of the petitioner falls and only mechanical observations have been made to justify the imposition of penalty. The revisional authority, in its order cursorily observed that the case is observed to be within the ambit of Clause (a) and (c) of Section 270A (9) of the Act, therefore, 270AA (c) may apply to petitioner s case. The revisional authority apparently did not consider the fact that the petitioner was not afforded opportunity of hearing in violation of provisions of proviso to Section 270AA (4) and that the order impugned before it was w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings, the petitioner realized that provision for doubtful GST input tax credit amounting to Rs. 16,30,91,496/- had been inadvertently merged with another expense account and mistakenly claimed as expenses under the IT provisions. Accordingly, the said amount was suo moto surrendered by the petitioner by revising its return of income and adding back the amount provision for doubtful GST input tax credit , to the total income. The said aspect was communicated vide letter dated 24.02.2021 alongwith submission of revised computation. 4. The assessment order (Annex. 6) under Section 143 (3) of the Act was passed by the National E-Assessment Centre ( NeAC ) making only addition of suo moto surrendered amount of Rs. 16,30,91,496/-, however, it was observed in the order that the penalty under Section 270A of the Act is imposed for misreporting of the income. 5. The petitioner filed an application under Section 270AA of the Act against the penalty order before the Deputy Commissioner, which came to be rejected by order dated 27.07.2021 (Annex. 9). 6. The petitioner challenged the order of rejection by filing revision petition under Section 264 of the Act, inter-alia, on the ground th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce was placed on Schneider Electric South East Asia (HQ) PTE Ltd. vs. Assistant Commissioner of Income Tax International Taxation Circle-3 (1) (2), New Delhi Ors. : WP (C) 5111/2022 decided on 28.03.2022 by Delhi High Court. 10. Learned counsel for the respondents made submissions that the present was a case of clear misrepresentation and suppression of facts, inasmuch as the petitioner had merged the provision for doubtful GST input tax credit in expense account, whereas the same was part of income and it is only during the scrutiny proceedings that the said income was offered for taxation, the plea raised that the petitioner has suo moto offered the income, is not borne out from the record and, therefore, the plea raised in this regard cannot be accepted. It was submitted that the Deputy Commissioner was justified in rejecting the application seeking immunity from imposition of penalty and the revisional authority has thoroughly considered all the aspects, as raised by the petitioner, and has recorded a categoric finding that case of the petitioner falls within sub-Clause (a) and (c) of Section 270A (9) of the Act and, therefore, the orders impugned did not call for any interfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , grant immunity from imposition of penalty under section 270A and initiation of proceedings under section 276C or section 286CC, where the proceedings for penalty under section 270A has not been initiated under the circumstances referred to in sub-section (9) of the said section 270A. (4) The Assessing Officer shall, within a period of one month from the end of the month in which the application under sub-section (1) is received, pass an order accepting or rejecting such application: Provided that no order rejecting the application shall be passed unless the assessee has been given an opportunity of being heard. (5) The order made under sub-section (4) shall be final. (6) No appeal under section 246A or an application for revision under section 264 shall be admissible against the order of assessment or reassessment, referred to in clause (a) of sub-section (1), in a case where an order under sub-section (4) has been made accepting the application. 15. The provisions of Section 270A of the Act, to the extent relevant, reads as under: 270 (1) (2) xxx (9) The cases of misreporting of income referred to in sub-section (8) shall be the following, namely: (a) misrepresentation or suppre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances referred to in sub-section (9) of the said Section 270A of the Act and is hereby rejected. 18. A perusal of above order would reveal that the authority had passed a wholly non-speaking order by only reiterating the provisions of sub-Section (3) of Section 270AA and indicated that the application was not found tenable, as penalty under Section 270AA of the Act has been initiated under the circumstances, referred to in sub-Section (9) of Section 270A of the Act. 19. Neither in the order dated 19.04.2021 (Annex. 6) nor in the order impugned (Annex. 9) anything has been indicated as to under which sub-clause of Section 270A (9), the case of the petitioner falls and only mechanical observations have been made to justify the imposition of penalty. 20. The revisional authority, in its order dated 13.03.2023 (Annex. 14), cursorily observed that the case is observed to be within the ambit of Clause (a) and (c) of Section 270A (9) of the Act, therefore, 270AA (c) may apply to petitioner s case. The revisional authority apparently did not consider the fact that the petitioner was not afforded opportunity of hearing in violation of provisions of proviso to Section 270AA (4) and that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g applications stand disposed of. 22. The finding recorded by the revisional authority is apparently contrary to the facts and essentially based on assumptions only on account of the fact that the petitioner on its own disclosed the income in question. As noticed hereinbefore, though several notices were issued under Section 142 of the Act, during the course of scrutiny proceedings and as many as ten issues were raised, on which the authority could not make any additions, the aspect of merging GST Input Credit with expenses was not pointed out/detected and the same was only pointed out voluntarily by the petitioner and, therefore, apparently sub-Clauses (a) and (c) of Section 270A (9) of the Act are not attracted. 23. In view of above, it is apparent that the Deputy Commissioner violated the provisions of proviso to Section 270AA (4) of the Act by not providing any opportunity of hearing, the order passed was wholly laconic, the same did not indicate as to under which part of Section 270A (9), the case of the petitioner was covered and the revisional authority without giving any cogent reasons, has in a wholly cursory manner indicated the case of the petitioner, was within the ambi ..... 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