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2023 (10) TMI 35 - ITAT CHENNAIPenalty proceedings u/s. 270A for underreporting of income - misreported or suppressed facts with regard to income from house property which resulted in computation of excessive loss under the head ‘income from house property’ - HELD THAT:- The concept of underreporting of income should be understood in the context of claiming any deduction or expenses, which is otherwise not allowable for computing loss, which is not otherwise as per law, which resulted in reduction in taxable income for relevant assessment year. Even if you want to apply sub-clause (a) of sub-section (9) of section 270A of the Act, same needs to be understood with the context of reduction in income or reduction in loss computed by the assessee for relevant assessment year. In the present case, parameters prescribed for levy of penalty u/s. 270A is not satisfied, because the assessee neither claimed excessive loss, which resulted in reduction in taxable income or reduction in loss to be adjusted against income either in the impugned assessment year or subsequent assessment years. Therefore, explanation offered by the assessee that he has computed excessive loss under the head ‘income from house property’ in respect of self-occupied house property needs to be understood in the above context of underreporting of income. Since, the assessee has neither claimed any benefit of loss against any other income for the impugned assessment year, nor has taken set off of said loss against income from house property in subsequent assessment years, in our considered view, the Assessing Officer has completely erred in considering loss computed by the assessee as underreporting of income on account of mis reporting of income. Thus, we are of the considered view that the AO has completely erred in levying penalty u/s. 270A(8) in respect of loss computed under the head ‘income from house property’. The ld. CIT(A) without appreciating relevant facts has simply sustained penalty levied by the AO and thus, we set aside order passed by the Ld.CIT(A) and direct the Assessing Officer to delete penalty levied u/s. 270A - Appeal filed by the assessee is allowed.
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