TMI Blog2023 (7) TMI 346X X X X Extracts X X X X X X X X Extracts X X X X ..... position under law that levy of penalty is not automatic on mere making addition, if the assessee has explained his bonafide belief about deduction of exemption of any component of income , no penalty is leviable on such component of income. Hence, no penalty u/s 270A is leviable on the addition of leave encashment. In the result, the grounds of appeal raised by the assessee are allowed. Decided in favour of assessee. - ITA No. 247/Srt/2023 - - - Dated:- 6-7-2023 - Shri Pawan Singh, Judicial Member For the Assessee : Ms. Chaitali Shah, CA For the Department : Shri Vinod Kumar, Sr. DR ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of National Faceless Appeal Centre, Delhi (NFAC)/Commissioner of Income Tax (Appeals) (in short, the ld. CIT(A)) dated 23/03/2023 for the Assessment Year (AY) 2018-19. Though the assessee has raised multiple grounds of appeal, however, in my considered view the sole and effective ground of appeal relates to confirming the action of Assessing Officer in levying penalty of Rs. 1,04,600/- under Section 270A of the Income Tax Act, 1961 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer recorded that no reply was furnished by assessee despite giving one more opportunity. The Assessing Officer thereby levied the penalty of Rs. 1,04,600/- being 200% of tax liability on the total addition of Rs. 6,91,380/- (648,830 + 42,550). The order of penalty was passed with prior approval of Joint Commissioner of Income Tax. 3. Aggrieved by the order of penalty, the assessee filed appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee filed detailed statement of fact. In the statement of fact, the assessee contended that during the assessment, the assessee filed response to the notices under Section 142(1) of the Act and explained the facts in detail. On the addition of interest income of Rs. 42,550/-, the assessee stated that he was under impression that he is a senior citizen and interest income was not included in the total taxable income as it would be eligible for deduction under Section 80TTB of the Act. For other addition of Rs. 6,48,025/- on account of leave encashment, the assessee submitted that he was employee of Dakshin Gujarat Vij Company Limited which was set up by splitting erstwhile Gujarat Electricity Board, which was a State Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failure to record investments in the books of account, claim of expenditure not substantiated by any evidence, recording of any false entry in the books of account, failure to record any receipt in books of account having a bearing on total income and failure to report any international transaction of any transaction deemed to be an international transaction or any specified domestic transaction, to which the provisions of Chapter-X apply. The ld. AR of the assessee submits that sub-section (9) of Section 270A defines misreporting of income in the form of six position/cases which is exhaustive and ordinary meaning suggest culpability or existence of guilty mind. The burden lies on the department to prove that the assessee has malice intention to invade tax and the case falls in six categories of sub-section (9) of Section 270A of the Act. It is for the revenue to prove that there is misrepresentation, suppression, failure and falsify in terms of six cases of misreporting. Neither during the course of assessment order nor in penalty proceedings, the revenue has discharged its onus to specify and prove the para meters of the said provisions. The ld. AR of the assessee submits that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to mention specific charge, the penalty is not justified. To support such submission, the ld. AR of the assessee relied upon the decision of Hon'ble Gujarat High Court in the case of Nayan C Shah Vs ITO (2016) 386 ITR 304 (Guj). 8. On the other hand, the ld. Sr. DR for the revenue supported the orders of lower authorities. The ld. Sr. DR for the revenue submits that the assessee was not a State Government or Central Government employee. The employer of assessee in Form AS-26 has clearly mentioned that only Rs. 3.00 lacs is exempt, out of total leave encashment of Rs. 9.48 lacs. The case of assessee clearly falls in clause (a) of sub-section (9) of Section 270A of the Act. The assessee was given opportunity to file reply in response to show cause notice for levy of penalty but no reply was filed by the assessee nor any specific submission was made before the ld. CIT(A). The ld. Sr. DR for the revenue submits that the assessee is not entitled for any relief. 9. I have considered the submissions of both the parties and have gone through the orders of the lower authorities carefully. I have also deliberated on various case laws relied by the ld. AR of the assessee. The Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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