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TMI Blog2024 (11) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... And Ms. Astha Chandra, Judicial Member For the Assessee : Shri Prasad Bhandari For the Department : Shri Arvind Desai, CIT-DR ORDER PER R. K. PANDA, VP : This appeal filed by the assessee is directed against the order dated 31.07.2024 of the CIT(A) / NFAC, Delhi relating to assessment year 2018-19. 2. Although a number of grounds have been raised by the assessee, however, these all relate to the order of the CIT(A) / NFAC in confirming the levy of penalty of Rs. 6,37,912/- levied by the Assessing Officer u/s 270A of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 3. Facts of the case, in brief, are that the assessee is an individual. On the basis of information that the assessee had sold an immovable property of Rs. 63,32,700/- and earned salary income of Rs. 6,00,000/-, but has not filed the return of income for the impugned assessment year, the case of the assessee was reopened as per the provisions of section 147 of the Act after recording the reasons and notice u/s 148 of the Act was issued and served on the assessee. In response to the same, the assessee filed return on 11.05.2023 declaring total income of Rs. 18,74,800/-. The Assessing Officer thereafter issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22 mostly more than one year from the issue of notice u/s 148 of the Act. If the case of the assessee does not re-open u/s 147 of the Act on the basis of the information available on record, the assessee will escape to pay the tax on Long Term Capital Gain. In view of the above, the Assessing Officer rightly invoked the provision of section 270A of the Act for under-reporting of income in consequence to mis- reporting of income. 5 Considering the facts and circumstances of the case, I hold that assessee has 'under-reporting of income in consequence of misreporting and are liable to pay a sum equal to 200 per cent of the amount of tax payable on under-reported income as per section 270A of the Act. The penalty amounts are calculated as under - The amount of under reporting of income 18,74,800 Tax on assessed income 3,18,956 Tax liability of returned income (no original return of income filed) - Tax on 'under-reporting of income in consequence of misreporting. 3,18,956 Penalty on 'under-reporting of income in consequence of misreporting (200% of the tax) 6,37,912 5. In appeal, the CIT(A) / NFAC confirmed the penalty so levied by the Assessing Officer by observing as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice does not specify the relevant limb under sub-section (9) of section 270A. Referring to the decision of the Pune Bench of the Tribunal in the case of Kishor Digambar Patil vs. ITO vide ITA Nos.54 55/PUN/2023 for assessment years 2017-18 and 2018-19, order dated 30.03.2023 and various other decisions, he submitted that since the Assessing Officer has not pointed out under which clause of section 270A(9) of the Act the penalty has been levied, therefore, such penalty is not sustainable in law and is liable to be deleted. 8. Even on merit also, he submitted that since the assessee was not knowing the provisions of law and was misguided by one Counsel that capital gain is not attracted on sale of agricultural land which is situated at rural area and she has bonafide belief that no capital gain is attracted on such sale of agricultural land. Further, the husband of the assessee suddenly expired due to heart attack on 06.05.2016 for which she got stuck in financial crisis, for which the land was sold. Since the return of income has already been accepted by the department and no addition has been made, therefore, no penalty u/s 270A of the Act is leviable. 9. The Ld. DR on the other ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anism provided u/sec.271(1)(c) of the Act wherein the law stood duly settled in light of Mohd. Farhan A Shaikh vs. ACIT [2021] 434 ITR 1 (Bom.) (FB); CIT vs. M/s. SSA s Emerald Meadows [2016] 386 ITR (St.) 13 (SC) and CIT vs. Manjunatha Cotton Ginning Factory (2013) 359 ITR 565 (Kar) (HC) that an assessing authority has to specify the corresponding limb in the show cause notice to be issued u/sec.274 of the Act. Learned counsel s case is that the legal position would hardly be any different wherein the legislature has now prescribed clauses (a) to (f) in sec.270A (9) of the Act only to rationalise and bring objectivity, certainty and clarity in the penalty provisions as per the CBDT s circular no.3/2017 [F.No.370142/20/2016-TPL]. Mr. Sonawane strongly argued in tune thereof that the very line of reasoning is required to be adopted herein as well whilst dealing with penalty proceedings under this new scheme of u/s. 270A introduced by the legislature by the Finance Act, 2016 w.e.f. 01.04.2017. 5. Mr. Murkunde on the other hand strongly supported the learned lower authorities action imposing the impugned penalties. He took us to the Assessing Officer s corresponding assessments, penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce to misreporting , the latter limb of misreporting containing six sub-limbs in clauses (a to f) under sub-section- (9) deserve to be read as an extension of sub-section (8) to section 270A only. This indeed seems to be the only possible view as the legislature has incorporated the non-obstante clause Notwithstanding anything contained in sub-sec.(6) or sub-sec.(7) thereby not including the sub-section (9) envisaging the six instances defining misreporting of income in section 270A of the Act. 6.1. Mr. Murkunde could further not dispute the fact that right from the Assessing Officer s twin assessments to his impugned penalty orders as well the NFAC s detailed discussion, the learned lower authorities have nowhere specified the corresponding sub-limbs (a to f) in sub-sec.(9) of sec.270A of the Act. That being the case, I wish to quote para 62.10 in the CBDT s circular no.3/2017 (supra) making it explicitly clear that these six clauses (a to f) would indeed form part of sub-section (8) to sec.270A as under : 62.10 The rate of penalty shall be fifty per cent of the tax payable on under-reported income. However in a case where under reporting of income results from misreporting of in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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