TMI Blog2024 (4) TMI 1115X X X X Extracts X X X X X X X X Extracts X X X X ..... inable in view of Jai balaji Business Corporation (P.) Ltd. [ 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. Therefore AO ought to have restricted the penalty to the extent of 50% which is leviable for under-reporting of the income. Since it is the case of the AO that the assessee had under reported his income and AO nowhere states that clause (8) of section 270A of the Act is applicable. Appeal of the assessee is partly allowed. - Shri Kul Bharat, Judicial Member And Dr.B.R.R.Kumar, Accountant Member For the Appellant : Shri Shivam Garg, Adv. And Shri Rahul Aggarwal, CA For the Respondent : Shri Om Parkash, Sr.DR ORDER PER KUL BHARAT, JM : The present appeal filed by the assessee is directed against the order passed by Ld.CIT(A)-24, New Delhi dated 30.05.2023 for the assessment year 2017-18. 2. The assessee has raised following grounds of appeal:- 1. That on the facts and circumstances of the case and the provisions of the law, the Ld. CIT(A) has failed to appreciate that the impugned pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missions, sustained the penalty and dismissed the appeal of the assessee. 5. Aggrieved against the order of Ld.CIT(A), the assessee preferred appeal before this Tribunal. 6. Ld. Counsel for the assessee reiterated the submissions as made in the written synopsis. He contended that although notice for imposing the penalty was issued for under-reporting the income but the penalty levied is imposed for misreporting the income. It is the case of the assessee that the AO without referring to the clause (9) of section 270A of the Act, proceeded to impose penalty which is contrary to binding precedents. He submitted that there is substantial difference in the rate of penalty for under-reporting and misreporting of income. Hence, the impugned order is illegal and unjustified. Ld. Counsel for the assessee placed reliance on the decision of the Co-ordinate Bench of the Tribunal in the case of Alrameez Construction (P.) Ltd. vs CIT/NFAC, Delhi [2023] 152 taxmann.com 382 (Mumbai-Trib.). The relevant contents of the synopsis filed by the assessee are reproduced as under:- 1. The present appeal of assessee is arising from the order of CIT (A) dated 30.05.2023 and relates to A.Y 2017-18. 2. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specifically prescribes the cases of misreporting from sub-clause (a) to (f), which are exclusive in nature. It is only in these cases, a penalty @200% can be imposed. 9. Furthermore perusal of penalty notice u/s 270A dated 27.12.2019 would show that the penalty was initiated under the head underreporting of income and not under the head Mis-reporting . This fact is further fortified by the observation of Ld. AO in PARA 3 of Penalty Order, wherein he himself accepted that the penalty proceeding was initiated for under-reporting of income only and not for under-reporting by way of misreporting . 10. In addition to above it is submitted that even in the penalty order, there is not a single whisper of the Mis-Reporting by the Ld AO but allegedly he proceeded to impose the penalty @200% prescribed for misreporting. It is submitted that this act of Ld. AO is against the law and hence liable to be declared void. 11. Without prejudice, it is submitted the Ld. AO has failed to state, both in the notice as well as in the penalty order, as to how the Assessee's case/addition falls within instances given in Clauses (a) to (f) of Sub-Section (9) of Section 270A of the Act and, therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.5.2023 c) The Pune Bench of the Tribunal in ITA No. 54 55/Pune/2023 Kishore Digambar Patil v. ITO dated 23.6.2023 d) Sahara India Life Insurance Ltd reported in 432 ITR 84 (Del) e) Mohd. Farhan A Shaikh vs DCIT reported in 434 ITR 1 (Bom) (FB). 7. On the other hand, Ld. Sr. DR for the Revenue opposed these submissions and supported the orders of the authorities below. 8. We have heard Ld. Authorized Representatives of the parties and perused the material available on record and gone through the orders of the authorities below. The contention of the assessee is that the AO has throughout in the notice for imposing the penalty stated about under-reporting of income and also in the impugned order. But while imposing penalty, he invoked the provision related to the misreporting of income. For the sake of clarity, section 270A of the Act is reproduced as under:- Penalty for under-reporting and misreporting of income. 270A. (1) The Assessing Officer or28[the Joint Commissioner (Appeals) or] the Commissioner (Appeals) or the Principal Commissioner or Commissioner may, during the course of any proceedings under this Act, direct that any person who has under-reported his income shall be l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome in accordance with the provisions of section 115JB or section 115JC, the amount of total under-reported income shall be determined in accordance with the following formula (A B) + (C D) where, A = the total income assessed as per the provisions other than the provisions contained in section 115JB or section 115JC (herein called general provisions); B = the total income that would have been chargeable had the total income assessed as per the general provisions been reduced by the amount of under-reported income; C = the total income assessed as per the provisions contained in section 115JB or section 115JC; D = the total income that would have been chargeable had the total income assessed as per the provisions contained in section 115JB or section 115JC been reduced by the amount of under-reported income: Provided further that where the amount of under-reported income on any issue is considered both under the provisions contained in section 115JB or section 115JC and under general provisions, such amount shall not be reduced from total income assessed while determining the amount under item D. Explanation. For the purposes of this section, (a) preceding order means an order imme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the basis of an estimate, if the assessee has, on his own, estimated a lower amount of addition or disallowance on the same issue, has included such amount in the computation of his income and has disclosed all the facts material to the addition or disallowance; (d) the amount of under-reported income represented by any addition made in conformity with the arm's length price determined by the Transfer Pricing Officer, where the assessee had maintained information and documents as prescribed under section 92D, declared the international transaction under Chapter X, and, disclosed all the material facts relating to the transaction; and (e) the amount of undisclosed income referred to in section 271AAB. (7) The penalty referred to in sub-section (1) shall be a sum equal to fifty per cent of the amount of tax payable on under-reported income. (8) Notwithstanding anything contained in sub-section (6) or sub-section (7), where under-reported income is in consequence of any misreporting thereof by any person, the penalty referred to in sub- section (1) shall be equal to two hundred per cent of the amount of tax payable on under-reported income. (9) The cases of misreporting of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er:- Whereas in the course of proceedings before me for the Assessment Year 2017-18, it appears to me Under-reporting of income. You are hereby requested to appear before me either personally or through a duly authorised representative at 10:30 AM on 23/01/2020 and show cause why an order Imposing a penalty on you should not be made under section 270A of the Income Tax Act, 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through authorised representative, you may show cause in writing on or before the said date which will be considered before any such order is made under section 270A of the Income Tax Act. 10. From the above, it is clear that the assessee was called upon to explain about under-reporting of income. But while imposing the penalty u/s 270A of the Act, the AO imposed penalty @ 200% which falls under clause (8) of section 270A of the Act. The Co-ordinate Bench of the Tribunal in the case of Alrameez Construction (P.) Ltd. vs CIT/NFAC, Delhi (supra) has held as under:- 7. In view of above discussion and case laws in favour of assessee, we are of the considered view that no penalty can be imposed in this case, as there is no misr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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