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TMI Blog2024 (7) TMI 1618X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, which resulted in under-reporting of income and attempted tax evasion. 03. Despite the absence of an explanation from the assessee regarding whether the misreporting was a mistake, oversight, or intentional misrepresentation, the Ld. CIT (A) erroneously deleted the penalty without proper justification. 04. The Ld. CIT (A) disregarded the applicability of Section 270A(9) of the Act, which outlines scenarios of underreporting due to misreporting and allows for the imposition of a higher penalty. 05. The Ld. CIT (A) has erred in not appreciating the language used in section 270A(9)(a), where the AO was merely required to figure out the limb and the AO has categorically brought the same in the penalty order. 06. Ld. CIT (A) has erred in not appreciating the language used in section 270A, where it is for the assessee to make a case of bona fide belief and not for the AO to make any case of deliberate or intentional violation. 07. Ld. CIT (A) has erred in not appreciating that by failing to elucidate the circumstances that led to the misrepresentation of facts in the ITR whereby at one hand the receipts were not included as Income and on the other hand the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 270A(8) r.w.s. 270A(10)(c) of the Act and worked out the penalty without applying the provisions of section 270A as the tax payable on under-reported income is Nil as per the provisions of section 270A(1)(c) of the Act. Therefore, the penalty will also be Nil as per the provisions of section 270A(8) of the Act. The Ld. CIT (A) deleted the impugned penalty by observing and recording the following findings : "4.3 I have gone through the assessment order and record available. The assessee filed its return of income for A.Y. 2017-18 on 03-01-2018, declaring total income of Rs. Nil. The case was selected for complete scrutiny through CASS. Notice u/s 143(2) dated 11-08-2018 was issued and served on the assessee. Assessment was completed u/s. 143(3) on 28.12.2019. Excess claim of capital expenditure of Rs. 1,42,54,2681- on assets was disallowed and added back to the income. Satisfaction was recorded -that the assessee misrepresented the income. Penalty proceedings u/s. 270A r.w.s 274 initiated through notice on 27.12.2019. During assessment proceedings, it was noticed that the assessee initially claimed capital expenditure of Rs. 2,40,02,0401-. The assessee later revis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned six scenarios the appellant's case falls under, which would warrant the imposition of a higher penalty of 200%. In such circumstances of the penalty imposition order, the penalty imposed by AO of Rs. 10130508/- is deleted." 6. The Revenue is dissatisfied and is before the Tribunal and all the grounds relate thereto. 7. The crux of the Revenue's grievance as argued by the Ld. DR is that there was intentional misrepresentation of expenditure in profit and loss account resulting in under-reporting of income and attempted tax evasion. Section 270A(9) outlines the scenario of under-reporting due to misreporting which has not been considered by the Ld. CIT(A). Failure on the part of the assessee to elucidate the circumstances that led to the misrepresentation of facts in the ITR has not been appreciated by the Ld. CIT(A). 8. The Ld. AR submitted that during the assessment proceedings the Ld. AO made query as to the requirement of application of money upto 85% on objects of the trust. The assessee explained that the assessee has spent more than 85% on objects of the trust. The revision was made only in respect of amount applied under capital account (excluding applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment order that the assessee has obtained fresh loans of Rs. 1,42,54,268/- from bank during AY 2018-19. Accordingly, since the assessee has pleaded that fresh loan has been obtained for capital expenditure on assets which has been claimed as capital expenditure in the ITR and now assessee submits request to reduce its claim of capital expenditure for the assets on which loan has been taken in next years. According to the Ld. AO, the plea of the assessee is found acceptable. Not only this the Ld. AO went on to observe further that in this way, the assessee had saved itself from the double deduction on same capital assets on which loan is availed in coming years whose repayment may have been claimed by the assessee in subsequent AYs. It was in the above backdrop of the factual matrix that the Ld. AO disallowed the excess claim of capital expenditure of Rs. 1,42,54,268/-. In our considered view there is no intentional misrepresentation of expenditure as alleged. By no stretch of imagination it can be said to be a case of attempted tax evasion as even after revision of computation, the taxable income remained Nil which is same as returned income of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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