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TMI Blog2024 (5) TMI 1168X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in law and on facts of the case in confirming the order passed by the Learned Assessing Officer u/s. 270A r.w.s 270A(8) and 270A(9) treating it as misreporting of income and thereby levied a penalty of Rs. 9,92,946/- i.e., @ 200% of the tax amount. Your Appellant submits that it be so held now and prays to delete the penalty Rs. 9,92,946/- made u/s. 270A r.w.s. 270A(8) and 270A(9) of the Act by the Learned Assessing Officer. 3. The order passed by the Learned Assessing Officer u/s. 270A of the Act is bad in law and the Learned Commissioner of Income Tax (Appeals) erred in upholding the same particularly when he has accepted the returned income as disclosed in return of income filed u/s. 148 of the Act, and hence there is neither misreporting of income nor under reporting of income vis-a-vis the return filed by the Appellant. It is submitted that it be so held now and the penalty of Rs. 9,92,946/- confirmed u/s. 270A of the Act be deleted. 4. The order passed by the Learned Assessing Officer and upheld by the Learned Commissioner of Income Tax (Appeals) is bad in law as in any case, the case of the Appellant did not fall under any of the criteria as envisaged u/s. 270A(9) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission, not filed the return of income under the impression that she had no taxable income. TDS was already made by the buyer of the property, the credit of that TDS was available to the appellant, still she did not file the return of income u/s 139 of the Act, this fact is treated as the appellant has reported nil income. Meaning thereby, the appellant has misreported her income by concealing taxable income for which Id. AO had rightly initiated penalty proceedings and passed the penalty order. Thus, in view of the facts of the case, I am of the considered opinion that the appellant has misreported the particulars of income and thereby concealed the taxable income. Therefore, the penalty order u/s 270A passed by the ld. AO levying penalty at the rate of 200% of the tax shout to be evaded, deserves to be sustained and upheld. Accordingly, grounds no. 4 of the appeal is dismissed and not allowed. 7. In result, the appeal of the appellant is dismissed and not allowed." 6. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A). 7. Before us, the Counsel for the assessee took several arguments, the first of which was that since the assessment has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d (9), penalty at two hundred per cent, of tax payable on such income]. Penalty under sub Section (8) is independent of levy of penalty under sub Section (7) even if there is no under reported income. Under sub Section (1), the AO, Commissioner, Principal Commissioner or the Appellate Commissioner may direct that any person who has under-reported his income to pay penalty on such under-reported income. In our view, the mere fact that there is a provision for automatic levy of penalty does not mean that penalty has to be imposed. The Supreme Court in the case of Hindustan Steel Ltd. vs. Assistant Commissioner, held that a penalty should not be imposed merely because it is lawful to do so. Even if a minimum penalty is prescribed, the authority will be justified in not imposing penalty where the breach is merely technical or is based upon the bona fide belief that a particular provision has been complied with. The Supreme Court stressed the importance of not levying penalty where the assessee acts with "honest and genuine belief". 12. Before proceedings further, it would be useful to reproduce the relevant extract of Section 270A of the Act for ready reference:- "(1) The Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner (Appeals) or] the Commissioner (Appeals) or the Commissioner or the Principal Commissioner, as the case may be, but the method employed is such that the income cannot properly be deduced therefrom; (c) the amount of under-reported income determined 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-sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y other conduct that amounts to a false assertion. The assertion so made, an assertion that does not accord with the facts is also termed false representation. 14. Now the issue for consideration before us is that in view of the assessee's particular set of facts, as applied to the relevant statutory provisions are reproduced above, whether firstly the case of the assessee is one of underreporting of income or one of misreporting of income. Secondly, can the assessee claim the benefit of sub-Section (6) of the Act which is to the effect that the assessee has been able to provide the reasonable explanation for such non-disclosure regarding sale of property by not filing of return of income. 15. In our considered view, the case of the assessee does not fall under any of the specific provision content in Section 270A(2) of the Act which deals with various circumstances relating to "under reporting of income". Therefore, since the assessee's case does not fall under sub-Section (2) of Section 270A, then the benefit of sub-Section (6) to Section 270A is also not available to the assessee. Therefore, the next issue for consideration is whether the assessee's case is one of misreporting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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