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2023 (10) TMI 1276 - AT - Income TaxPenalty u/s 270A - under-reporting of income - taxability of interest - Immunity from imposition of penalty u/s 270AA - assessee was unaware that interest income earned by is not exempt till assessment in its case for AY 2013-14 was completed wherein the same was disallowed and assessee opted for DTVSV Scheme for 3 years to wind up the tax liability - HELD THAT:- It is an admitted position that in its original return in its Income & Expenditure Account the assessee disclosed that during the year it earned interest income and miscellaneous/other incomes and complete details thereof were brought on record. On the face of these facts it cannot be alleged that the assessee is guilty of underreporting and/or misreporting of income. It is not the case of the Revenue that anything more than what was declared by the assessee was found by the Revenue. The case of the assessee all along has been that it was under bonafide belief that the impugned interest and miscellaneous income was exempt from tax on ground of “principle of mutuality” and therefore in its original return it claimed the same as exempt. As soon as the assessee became aware that the said income is taxable, it opted for DTVSV Scheme and revised its return offering the said income to tax and paid tax which has not been disputed by the Revenue. It may be emphasised that the fact of earning the impugned interest and miscellaneous income has duly been disclosed in its accounts and in the original return with full details. However, due to ongoing litigation about the taxability of the said income and misconception of law, the assessee claimed it as exempt. Nonetheless, the fact remains that the assessee filed revised return, offered the said income to tax during the course of assessment proceedings itself. As following the decisions in Prem Brothers Infrastructure LLP [2022 (6) TMI 130 - DELHI HIGH COURT] and Alrameez Construction (P) Ltd. [2023 (8) TMI 371 - ITAT MUMBAI] we hold that the impugned penalty is not exigible which we hereby vacate. Decided in favour of assessee.
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