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2023 (8) TMI 371 - AT - Income TaxPenalty proceedings u/s. 270A - quantum addition in the case of the assessee was made u/s 43CA r.w.s. 56 (2) (x) i.e. deeming sections - Proof of misreporting of income - HELD THAT:- Penalty was initiated and imposed 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. 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 Revenue in the assessment order, for imposition of penalty makes the impugned order manifestly arbitrary. No penalty can be imposed in this case, as there is no misreporting is there by assessee for the purposes of section 270A. Even addition u/s. 43CA was not sustainable in view of Jai balaji Business Corporation (P.) Ltd. v. ACIT [2023 (2) TMI 421 - ITAT PUNE]. But as assessee before us is for penalty issue only and matter of quantum issue is not before us that are of no use to assessee in present appeal. In the result grounds of appeal raised by assessee is allowed.
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