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TMI Blog2024 (11) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... specifying any limb of the penalty proposed to be levied. As the AO issued the vague notice without specifying any particular limb or sub clause for levying the proposed penalty. There is no whisper at all in the notice issued u/s 270A r.w.s. 274 of the Act about misreporting of income whereas the penalty has been levied ultimately for both 'under reporting' and 'misreporting of income' @ 200% in terms of section 270A(9) of the Act, for which show cause notice was never issued to the Assessee. Decided in favour of assessee. - Shri Narender Kumar Choudhry, Judicial Member And Shri Gagan Goyal, Accountant Member For the Assessee : Dr. K. Shivaram a/w Mr. Shashi Behkal, A.R. For the Revenue : Shri R.R. Makwana, Sr. DR. ORDER PER : NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER: This appeal has been preferred by the Assessee against the order dated 27.09.2023, impugned herein, passed by the Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) under section 250 of the Income Tax Act, 1961 (in short the Act ) for the A.Y. 2019-2000. 2. In the instant case, the Assessee by filing his return of income on dated 07.08.2019 had declared total income at Rs. 26,35,97 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Dubai account, whereas his Indian employer deducted tax at source on salary and credited to his Dubai account. So he at the time of filing of the return for the A.Y. 2019-2020 inadvertently took salary income to the extent of Rs. 28,19,510/- instead of gross salary of Rs. 91,13,252/-. He has inadvertently took the same amount of salary as taken in the original ITR i.e. Rs. 28,19,510/- while filing ITR in response to notice u/s 139(9) of the Act. However, subsequently, he rectified the said inconsistency and paid taxes on his total income (which included the salary of Rs. 91,13,252/-) at the time of filing of response to the notice dated 31.03.2021 u/s 143(2) of the Act . 2.3 The aforesaid submissions/claim of the Assessee was though considered by the AO, however, not found acceptable mainly on the following reasons: That the Assessee while filing his return of income in response to the notice u/s 139(9) of the Act declared the same income as declared while filing original return of income and has not made any change in respect to the salary income. Now during the course of scrutiny proceedings, the Assessee has admitted his mistake that though he received sum of Rs. 91,13,252/- a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l return of income, instead of disclosing the actual amount of income received and therefore the contention/claim of the Assessee is not acceptable. 3. The Assessee, being aggrieved, challenged the levy of penalty before the Ld. Commissioner, who on the same footing as adopted by the AO for imposing the penalty, vide impugned order affirmed the penalty. 4. The Assessee, being aggrieved, challenged the affirmation of the penalty by raising various original grounds of appeal. Subsequently during the appellate proceedings, the Assessee raised following additional grounds of appeal . 3. On the facts and circumstances of the case and in law the Ld. Commissioner of Income-tax (Appeals) (CIT(A)) has erred in confirming a penalty of Rs. 44,90,048/- under section 270A(8) of the Act levied by Income- tax Officer Ward 1(1)(1), when the jurisdiction of the Assessee lies with Assistant Commissioner or Deputy Commissioner as per CBDT instructions 1 of 2011 dated January 31, 2011. 4. On the facts and circumstances of the case and in law the Ld. CIT(A) has erred in confirming a penalty of Rs. 44,90,048/- under section 270A(8) of the Act when the assessment proceedings and penalty proceedings are b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under: 6. Having perused the impugned order dated 09th March, 2022, this Court is of the view that the Respondents' action of denying the benefit of immunity on the ground that the penalty was initiated under Section 270A of the Act for misreporting of income is not only erroneous but also arbitrary and bereft of any reason as in the penalty notice the Respondents have failed to specify the limb underreporting or misreporting of income, under which the penalty proceedings had been initiated. 7. This Court also finds that there is not even a whisper as to which limb of Section 270A of the Act is attracted and how the ingredient of sub- section (9) of Section 270A is satisfied. In the absence of such particulars, the mere reference to the word misreporting by the Respondents in the assessment order to deny immunity from imposition of penalty and prosecution makes the impugned order manifestly arbitrary. 8. This Court is of the opinion that the entire edifice of the assessment order framed by Respondent No. 1 was actually voluntary computation of income filed by the Petitioner to buy peace and avoid litigation, which fact has been duly noted and accepted in assessment order as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eading of the reasons given by the AO to levy penalty for misreporting (supra) it is discerned that he has failed to spell out as to how the assessee's case/additions falls within the ken of instances given in clause (a) to (f) of sub-section (9) of section 270A of the Act. Since AO failed to bring the addition/disallowance he made in quantum assessment, under the ken of (a) to (f) of the sub-section(9) of section 270A of the Act, the penalty levied for misreporting @ 200% cannot be sustained because it is trite law that penalty provisions have to be strictly interpreted. And therefore, taking into consideration, the facts and circumstances of the case, we find that the levy of penalty by the AO u/s 270A of the Act suffers from the vice of nonapplication of mind as well as violates principles of natural justice. And therefore, the penalty levied on addition of sustained quantum addition of Rs. 67,970/- cannot survive. And therefore, it is directed to be deleted. 7.2 The Hon ble co-ordinate Bench of the Tribunal in Jaina Marketing Associates case (supra) ultimately deleted the identical penalty as imposed u/s 270A(9) of the Act, by holding as under: 15. In the instant case, on p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said Full Bench decision of Hon'ble Bombay High Court, the decision of Hon'ble Jurisdictional High Court in the case of Sahara India Life Insurance reported in 432 ITR 84 (Del) and other decision reffered supra squarely applies to the facts of the instant case before us. Hence we direct the Ld. AO to delete the penalty levied u/s 270A of the Act for the Assessment Year 2017-18. Accordingly, we allow the Appeal of the Assessee on this technical ground and leave the grounds raised on levy of penalty on merits left open as adjudication of the same becomes academic in nature. 8. Coming to the instant case, admittedly in the assessment order, the AO initiated the penalty proceedings u/s 270A of the Act without mentioning any sub clause of the section 270A of the Act or not specifying any limb of the penalty proposed to be levied. Further, in the penalty notice issued u/s 274 r.w.s 270A of the Act dated 11.11.2021 mentioned under reporting of the income. Subsequently during the penalty proceedings again issued the notice dated 20.12.2021 u/s 274 r.w.s 270A of the Act, without specifying any limb or sub clause of section 270A of the Act and ultimately vide order dated 22.02.2022 u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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