KARAMVIR SINGH,DELHI vs. INCOME TAX OFFICER, DELHI

(A.Y.2018-19) Karamvir Singh, 2234, Gali No. 14, Wazirabad Village, Delhi 110042 ...... अपीलाथ�/Appellant PAN: BICPS-4222-H बनाम Vs. Income Tax Officer, Ward 35(1), Civic Centre, Minto Road, ..... �ितवादी/Respondent Delhi Assessee by : Shri Kailash Khemani, Chartered Accountant Department by : Shri Om Prakash, Sr. DR सुनवाई क� ितिथ/ Date of hearing : 30/06/2025 घोषणा क� ितिथ/ Date of pronouncement : : 30/06/2025 आदेश/ORDER

PER VIKAS AWASTHY, JM:

vide application dated 20.06.2025 challenging validity of penalty notice dated 13.05.2021 issued u/s.274 r.w.s. 270A of the Act. The additional ground raised by the assessee reads as under:-

1. That on the facts and in the circumstances of the case and in law, that the Ld. A.O issued a notice u/s 274 read with section 270A in a routine manner and failed to make a specific ground under which under-reported income which is in consequence of misreporting thereof was invoked.”

3. The additional ground of appeal raised by the assessee is a legal ground and goes to the root of validity of penalty proceedings. Hence, the same is admitted for adjudication.

4. Shri Kailash Khemani, appearing on behalf of the assessee submits that the notice dated 13.05.2021 u/s. 274 r.w.s 270A of the Act has been issued in a mechanical manner. The ld. AR pointed that in the first instance the Assessing Officer (AO) in the notice has mentioned both the charges i.e. “under reporting” and “mis-reporting”. Subsequently, vide order dated 31.12.2021 passed u/s. 270A of the Act, the AO levied penalty u/s. 270A(9) of the Act for “mis-reporting of income”. There are six clauses under sub section (9) to section 270A of the Act. The AO has failed to specify as to under which clause of sub section (9) penalty is being initiated. This makes the notice vague and vitiates penalty proceedings.

5. Per contra, Shri Om Prakash representing the department vehemently defended the impugned order. The ld. DR submitted that the AO vide order dated 31.12.2021 passed u/s. 270A of the Act has levied penalty u/s. 270A(9) of the Act. Therefore, there is no ambiguity about the charge on which penalty is levied at the time of passing of the order. He thus prayed for upholding the impugned order of dismissing appeal of the assessee.

(AY 2018-19) 6. Both sides heard, orders of the authorities below examined. A perusal of the order dated 31.12.2021 vide which penalty has been levied u/s.270A of the Act shows that ostensibly the FAO initiated penalty u/s. 270A(9) of the Act. However, while issuing notice u/s. 274 r.w.s. 270A of the Act dated 13.05.2021, the AO has mentioned both limbs of section 270A of the Act i.e. “under reporting” and “mis-reporting of income”. Both these expressions carry different connotations and signifies different charges for levy of penalty. ‘Under reporting’ of income refers to reporting of less income then the actual income. Whereas, “mis-reporting of income” involves providing of incorrect information about the nature, source or amount of income. These expressions cannot be used interchangeably and are not synonyms for each other. Therefore, the Legislature has classified both these charges under two different sub sections of section 270A of the Act. Sub section (2) to 270A of the Act deals with the situation where there is “under reporting of income” and sub section (9) deals with situation, where there is “mis-reporting of income”. “Mis-reporting of income” occurs on account of following six charges:- “(a) misrepresentation or suppression of facts; (b) failure to record investments in the books of account; (c) claim of expenditure not substantiated by any evidence; (d) recording of any false entry in the books of account; (e) failure to record any receipt in books of account having a bearing on total income; and (f) failure to report any international transaction or any transaction deemed to be an international transaction or any specified domestic transaction, to which the provisions of Chapter X apply.”

(AY 2018-19) 7. In the instant case, the AO while issuing notice u/s. 274A r.w.s 270A of the Act mention the charge for levy of penalty as under:- “Whereas in the course of proceedings before me for the Assessment Year 2018- 19, it appears to me that you have under-reported income which is in consequence of misreporting thereof.”