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2024 (3) TMI 1076 - ITAT JODHPURPenalty u/s 270A - misreporting of the income - disallowances of 40A(3) on account of interest income in the other sources and has also disallowed the claim of the assessee u/s 32 disputing the period use of the asset of the assessee - HELD THAT:- We find force in the arguments of assessee that the additions/disallowance made by the Assessing Officer are not in the nature of misreporting of the income of the assessee to drive home to this contention, the assessee relied upon the decision of the jurisdictional high court in the case of G. R. Infraprojects Ltd.[2024 (1) TMI 163 - RAJASTHAN HIGH COURT] wherein held that the case of levy penalty without specifying the limb of under reported or misreported the income the levy of penalty is not correct. Here in this case the claim of assessee denied though assessee did not challenge it on merits. The bench noted that the CIT(A) has treated assessment and penalty proceedings at par. While it is settled that penalty proceeding are different from assessment proceeding and that mere addition in assessment could not automatically lead to concealment. Addition made in assessment is not conclusive in the penalty proceeding in which the assessee is free to place further material to substantiate the claim that there was no concealment. Merely non-filing of appeal by the assessee against addition made in assessment cannot be a ground to conclude that assessee accepted the concealment. Therefore in these facts the CIT Appeal has wrongly upheld the penalty imposed by the Assessing Officer. Immunity from imposition of penalty for underreporting of income if assessee has deposited the demand created by the Assessing Officer within 30 days from receipt of demand notice and intimated to him under rule 129 in Form No. 68 - In this case assessee duly deposited the demand created against her within 30 days but she failed to file Form No. 68 within the prescribed time before the Assessing Officer but while responding to the penalty proceeding subsequently the assessee filed Form No. 68 before the Assessing Officer but he did not consider it. CIT(Appeal) has also did not consider the filing of Form No. 68 belatedly. The delay in filing the Form is only a procedural lapse on the part of the assessee not the substantive failure. In substance the assessee deposited the demand within 30 days, which is the part of substantive law and merely filing the Form No. 68 is only a technical or venial breach of procedural law. Therefore benefit of substantive law is required to be given to the assessee. CIT(Appeal) has also not considered this aspect. Penalty @200% on account of misreporting of income on depreciation of fixed assets claimed by the assessee for full year as against half year since the asset was put to use for less than 180 days - Assessee due to inadvertence claimed the depreciation for full year this is certainly not the misreporting of income. The misreporting of income is something in which mensrea on the part of assessee is required to be present. The willful default constitutes misreporting of income which is not the case. The assessee has made inadvertent wrong claim but has disclosed the facts fully and truly therefore old law in this regard hold good and the penalty imposition is not warranted. Please refer to CIT vs. Reliance Petrol Products Private Limited (2010) [2010 (3) TMI 80 - SUPREME COURT] and Dilip Shroff [2007 (5) TMI 198 - SUPREME COURT] - Considering the fact that the nature of addition/disallowance are not in the nature of misreporting or misreporting income of the assessee and the assessee has paid the demand within 30 days and filed the required form no. 68 since that form being procedural nature we condone that aspect of the matter and direct the ld. AO to delete the penalty levied u/s. 270A - Decided in favour of assessee.
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