9911796707
TMI Blog2024 (12) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... find merit in the arguments of the Learned Counsel for the Assessee that it is an inadvertent and bonafide error in not disclosing the interest on income tax refund. As in the case of Price Waterhouse Coopers Pvt. Ltd. [ 2012 (9) TMI 775 - SUPREME COURT] observed that a bonafide and an inadvertent error does not attract penalty u/sec.271(1)(c )- we hold that the Ld. CIT(A), in the instant case, is not justified in sustaining the penalty levied by the Assessing Officer u/sec.270A - Appeal of the assessee is allowed. - Shri Rama Kanta Panda, Vice President And Ms. Astha Chandra, Judicial Member For the Assessee : Shri Sharad A. Shah For the Revenue : Shri Ramnath P. Murkunde ORDER PER RAMA KANTA PANDA, V.P. : This appeal filed by the Assessee is directed against the order dated 21.05.2024 of the learned CIT(A)-NFAC, Delhi relating to assessment year 2017-2018. 2. Facts of the case, in brief, are that the assessee is a company and filed it s original return of income on 28.11.2017 declaring total income of Rs. 36,98,30,710/-. Subsequently, the case was reopened within the meaning of sec.147 of the Act as the assessee had received Rs. 32,20,796/- on account of interest on income tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 47 of the Act on basis of the details available on record that appellant did not offer to tax on account of interest received on income tax refund. In response to the notice u/s 148 of the Act, the appellant filed its return of income declaring total income of Rs. 38,31,53,640/-, which was more than the returned income u/s 139(1) of the Act. The reassessment was completed without any addition made to the total Income of the appellant. However, it was noted by the AO that the appellant has offered an additional amount of Rs. 21,22,930/- under the head income from other sources' in the return of income filed against notice issued u/s 148 of the Act. The AO levied penalty of Rs. 3,27,993/- u/s 270A of the Act being 50% of tax determined for underreporting of income. 4.3. On perusal of sec 270A, it is observed that the subsection 2 of sec 270A prescribes the persons falling under the category of under reported his income and one of the clause (c) of sub-section (2) prescribed that the income reassessed is greater than the income assessed or reassessed immediately before such reassessment shall be considered to have under-reported income. It is observed that the appellant had filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was filed much after the adjustment of the interest on IT refund against the outstanding demands for earlier years. Apart from this, it is a practice that the CPC always adjust the refund against outstanding demand under intimation to the appellant and also after determining the refund including interest thereon, a letter of adjustment u/s 245 of the Act is issued to the appellant seeking any objection or acceptance. Hence, the explanation offered by the appellant is not bonafide and the appellant is not entitled for the benefit of section 270A(6) of the Act. 4.5. Considering the above facts and circumstances of the case, I am of the considered view that the appellant is liable to be penalised for under-reporting of its income u/s 270A of the Act. Therefore, the penalty levied by the AO is hereby confirmed. Thus, the sole issue of levy of penalty hereby dismissed. 5. In result, the appeal of the appellant is dismissed. 4. Aggrieved by the order of the Ld. CIT(A)-NFAC, the assessee carried the matter in appeal before the Tribunal by raising the following grounds : 1. The Ld. AO erred in levying (Ld. CIT-A erred in confirming) penalty u/s 270A of Rs. 3,27,993/-. 2. None of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income has been furnished or where return has been furnished for the first time under section 148; f. the amount of deemed total income reassessed as per the provisions of section 115JB or section 115JC, as the case may be, is greater than the deemed total income assessed or reassessed immediately before such reassessment; g. the income assessed or reassessed has the effect of reducing the loss or converting such loss into income. 5.1. Referring to the above clauses, he submitted that assessee does not fall under any of the above clauses. He submitted that once it is to be held that there is no underreporting of income, the question of mis-reporting of income does not arise. He accordingly submitted that the penalty levied by the Assessing Officer and sustained by the Ld. CIT(A) is liable to be deleted. In his second plank of argument he submitted that the penalty u/sec.270A(9) imposed by the Assessing Officer is without specifying the limb as per clauses (a) to (f) of sec.270A(9). Relying on various decisions, he submitted that in absence of specifying the limb, the penalty levied by the Assessing Officer and upheld by the CIT(A) is not in accordance with law and therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by CPC hence became invalid as per the ITBA system-ITR Processing-View RRR Entries. (ii) Further the case was selected for scrutiny u/s. 143(3) of the Act through CASS. Notice u/s. 143(2) was issued to the assessee on 17-08-2018. It is pertinent to mention that with regards to the invalid return, Central Board of Direct Taxes, New Delhi vide Circular No.F.No.225/333/2019/ ITA-II dated 29.11.2019 had issued guidelines for scrutiny of invalid return selected through CASS Cycle-2018 wherein, it has been stated that as the scrutiny of such invalid return(s) will pose a challenge for the AO and is bad in law, Assessing Officer shall drop the proceedings u/s. 143(2) of the I.T. Act in such cases and reopen the same by issue of notice u/s. 148 of the Act. In view of the said Circular dated 29.11.2019, the proceedings so initiated were dropped on 28.12.2019. (iii) Accordingly, after recording due reasons and taking necessary approval from the Competent Authority, the case of the assessee was re-opened u/s. 147 of the Act and notice u/s. 148 of the I.T.Act, 1961 was issued on 25/07/2022 which was duly served on the assessee through E-mail thereby requiring the assessee to file his ITR wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut making any addition vide order dated 11.02.2023 passed u/sec.143(3)/147 of the Act. We find the Assessing Officer levied the penalty of Rs. 3,27,993/- u/sec.270A of the Act being 50% of tax sought to be evaded on such undisclosed income. We find the Ld. CIT(A) sustained the penalty so levied by the Assessing Officer, the reasons of which have already been reproduced in the preceding paragraph. It is the submission of the Learned Counsel for the Assessee that assessee does not fall under any of the clauses of sec.270A(2) which deals with under-reporting of income. It is also his submission that in view of the decision of Hon ble Supreme Court in the case of Price Waterhouse Coopers Pvt. Ltd., vs. CIT (supra), no penalty is levaible for an inadvertent error on the part of the assessee for not disclosing the interest on income tax refund. 8.1. We find some force in the arguments advanced by the assessee. The provisions of sec.270A(2) gives the circumstances under which a person shall be considered to have under-reported his income. From the report of the Assessing Officer, it is crystal clear that neither any intimation was passed u/s. 143(1) nor any order u/s. 143(3). Under these ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
