RENU GOEL,DELHI vs. INCOME TAX OFFICER, DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, A: NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SMT. RENU JAUHRI, ACCOUNTANT MEMBER ITA No.- 3337/Del/2026 [Assessment Year: 2017-18] Renu Goel, Income Tax Officer, 8B, Dhruv Apartment, Plot No. 43, Ward 36(3), Sector-13, Rohini, Vs Income Tax Department, Civic Delhi-110085 Centre, Delhi-110002. PAN- AGDPG6194L Assessee Revenue Assessee by None Revenue by Shri Manoj Kumar, Sr. DR Date of Hearing 23.07.2026 Date of Pronouncement 23.07.2026 ORDER Per Renu Jauhri, Accountant Member:

This appeal by the assessee is directed against the order dated 11.01.2026 of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘Ld. CIT(A)] arising out of the Order dated 27.07.2021 passed under section 270A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) Additional /Joint/ Deputy /Assistant Commissioner of Income Tax, ITO, NFAC, Delhi (hereinafter referred to as the ‘AO’) pertaining to Assessment Year (A.Y.) 2017-18.

ITA No.- 3337/Del/2026 Renu Goel 2. The assessee has raised the following grounds of appeal:

“ 1. That the order passed by the Ld. CIT(A) confirming penalty u/s 270A is illegal, bad in law and against the facts and circumstances of the case. 2. That the Ld. CIT(A) has erred in upholding penalty @ 200% treating the case as one of “misreporting of income” without satisfying the mandatory conditions prescribed under section 270A(9). 3. That the Ld. CIT(A) has failed to appreciate that additions were made on estimate basis by applying higher net profit rate (0.75% instead of 0.5%) and therefore penalty for misreporting is not leviable. 4. That the Assessing Officer initiated penalty proceedings for “under reporting” but levied penalty for “misreporting”, which is a jurisdictional defect rendering the penalty order void. 5. That there was no finding of any false entry, bogus claim, suppression of receipts, or deliberate concealment as contemplated under section 270A(9). 6. That the penalty proceedings being quasi-criminal in nature require strict construction of law, and in absence of specific finding of misreporting, penalty @200% is unsustainable. 7. That the appellant craves leave to add, amend, alter or withdraw any ground at the time of hearing. That all grounds of appeal are without prejudice to each other.” 3. During the course of hearing, none appeared on behalf of the assessee, nor was any application for adjournment placed on record. Therefore, this case was taken up for hearing on the basis of material available on record and Ld. Sr. DR was heard. 4. Brief facts are that the assessee filed return declaring income of Rs. 5,04,878/- for A.Y. 2017-18. The case was selected for scrutiny and assessment was completed u/s 143(3) after making total addition of Rs. 26,93,141/-. The addition was made on estimate basis after calculating the commission earned on sales @ 0.75% as against 0.50% declared by the assessee. Penalty proceedings u/s 270A were also initiated. Subsequently, vide order dated 27.07.2021, penalty for under reporting in

ITA No.- 3337/Del/2026 Renu Goel consequence of misreporting was levied at Rs. 13,03,860/- (being 200% of tax on under reported income of Rs. 26,93,141/-).

4.1 Aggrieved, the assessee preferred an appeal before the CIT(A). After considering the assessee’s submissions, the Ld. CIT(A) observed that the assessee had herself revised the income from Rs. 5,38,600/- to Rs. 20,16,639/- during the course of assessment proceedings. Further, an addition of Rs. 12,19,231/- was also made on account of estimated commission income computed @ 0.75% as against @0.5% and which was admitted by the assessee to be lower than the average profit margins in the textile sector. No appeal against the quantum addition had been preferred by the assessee. Accordingly, the CIT(A) held that the case of the assessee falls under section 270A(2)(a) on account of misrepresentation or suppression of facts. He, therefore, held that the penalty for under reporting of income on account of misreporting of income was justified and dismissed the appeal of the assessee.

4.2 Further aggrieved, the assessee has filed an appeal before the Tribunal.

5.1 In the grounds of appeal the assessee has submitted that the AO had initiated penalty for under reporting but levied the penalty for misreporting which is not permissible. Further, Ld. CIT(A) while confirming the penalty has held that the 3

ITA No.- 3337/Del/2026 Renu Goel assessee had misrepresented the facts and therefore her case was covered u/s 270A(2)(a) of the Act. We also note that the addition was made purely on estimate basis without pointing out any misrepresentation or suppression of facts. We find that in the penalty order, the AO has also not specified which clause of under - reporting or misreporting u/s 270A has been invoked in this case for imposing the penalty. Further, the addition on account of commission income was made on purely estimate basis without pointing out any misrepresentation or suppression of facts by the assessee.

In view of all these facts and circumstances, we hold that the penalty order was bad in law and, therefore, the penalty of Rs. 13,03,860/- is hereby deleted.

Order pronounced in the open court on 23.07.2026

Sd/- Sd/- [SATBEER SINGH GODARA] [RENU JAUHRI] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated- 31.07.2026. Pooja. Copy forwarded to: 1. Assessee 2. Respondent 3. CIT 4. CIT(A) 5. DR