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TMI Blog2025 (2) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... ponse to which, the Authorised Representative of the Assessee appeared before the Assessing Officer from time to time and filed the requisite details. 2.1. During the course of assessment proceedings, the Assessing Officer noted that assessee has debited advertisement expenses of Rs. 34,500/-, development charges of Rs. 1,17,778/-, land expenses of Rs. 17,10,000/- excavation charges of Rs. 2,05,900/-. In absence of justifying the said expenses with details and documents, the Assessing Officer held the same to be un-proved and pretentious. He, therefore, reduced the closing work-in-progress by Rs. 20,68,178/-, on which, he initiated penalty proceedings u/sec.270A for misreporting of income. Since the assessee did not file any appeal against the said addition, the Assessing Officer held that the assessee has no objection against the addition. He, therefore, held that it is a fit case for levy of penalty u/sec.270A of the Act for mis-reporting of income. He, accordingly, levied penalty of Rs. 12,78,134/- being 200% of tax sought to be evaded u/sec.270A of the Act. 3. In appeal, the Ld. CIT(A) held that the penalty @ 200% i.e., of Rs. 12,78,134/- u/sec.270A of the Act is highly exces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailure of the Assessing Officer for non-mentioning as to under which clause/limb of Sec.270A such penalty proceedings have been initiated. 5.1. Even on merit also, he submitted that assessee is justified in capitalization of such expenditure and all the details were filed before the Ld. CIT(A) at the time of appeal proceedings. Merely because the assessee did not respond to the notice issued by the Assessing Officer, it cannot validate an invalid proceeding. He accordingly submitted that both legally and factually, the Ld. CIT(A) is not justified in confirming the penalty levied by the Assessing Officer u/sec.270A of the Act. 6. The Learned DR on the other hand relied on the order of the Assessing Officer and Ld. CIT(A). 7. We have heard the rival submissions made by both the sides and perused the material available on record. We find the Assessing Officer in the instant case levied penalty @ 200% of the tax sought to be evaded on account of expenses to the tune of Rs. 20,68,178/- which according to him are unproved and pretentious for which he reduced the same from the capital work-in-progress. Since the assessee did not file any appeal, he initiated penalty proceedings u/sec.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause under which the assessee has underreported or mis-reported the income. 11. We find some force in the above arguments of the Ld. Counsel for the assessee. We find the Co-ordinate Bench of the Tribunal in the case of Kishor Digambar Patil vs. ITO (supra) while deciding an identical issue has quashed the penalty levied u/s 270A for failure of the Assessing Officer in quoting any of the six limbs as mentioned in section 270A(9) of the Act. The relevant observations of the Tribunal from para 4 onwards read as under : "4. Both the learned representatives vehemently reiterated their respective stands against and in support of the impugned penalties. The assessee more particularly argued that both the learned lower authorities have erred in law and on facts in imposing sec.270A penalties in issue without even specifying the relevant limb under sub-section (9) thereof pertaining to "misreporting of income". Learned counsel quoted the erstwhile earlier penalty mechanism 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only wherein various hon'ble higher judicial forums had settled the law that the Assessing Officer ought to specify as to whether the concerned taxpayer had concealed or furnished inaccurate particulars of his taxable income during the course of assessment. I am of the view that the very line of judicial precedents would squarely apply even for the amended penalty provision i.e., sec.270A of the Act as well wherein the legislature has not only prescribed twin limbs of "under reporting of income as well as misreporting of income", but also, unlike the earlier provision u/sec.271. this time it has stipulated specific deeming illustrations under both the twin foregoing heads of the "under reported income" and "misreporting of income" in sub-sections (2) and (9) (a to f) respectively. In my considered opinion, once the instant twin appeals involve levy of penalty @ 200% of the taxes sought to be evaded and the learned lower authorities have held the assessee to have "under-reported his taxable income in consequence 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- secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly defeat the legislative mandate but also it renders the amending provisions an otiose. I accordingly hold in these peculiar facts and circumstances that both the impugned penalties deserve to be quashed as not sustainable in the eye of law. Ordered accordingly. 12. Since the Assessing Officer in the instant case has admittedly not mentioned as to under which limb of sub-section (9) of section 270A he has levied the penalty, therefore, respectfully following the decision of the Co-ordinate Bench of the Tribunal in the case of Kishor Digambar Patil vs. ITO (supra), we hold that the penalty so levied by the Assessing Officer u/s 270A is not in accordance with law. We, therefore, set aside the order of the Ld. CIT(A)/NFAC and direct the Assessing Officer to delete the penalty. The grounds raised by the assessee are accordingly allowed. 13. In the result, the appeal filed by the assessee is allowed." 7.2. Similar view has been taken by the Coordinate Benches of the Tribunal in various other decisions relied on by the Learned Counsel for the Assessee. Since admittedly the Assessing Officer in the instant case neither in the assessment order nor in the penalty notice has mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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