SHRI ROHITKUMAR SHRIRAMLAL SRIVASTAVA ,MUMBAI vs. DY. COMMISSIONER OF INCOME TAX CIRCLE -1 , KALYAN

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ITA 1858/MUM/2026Status: DisposedITAT Mumbai29 June 2026AY 2022-236 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee prima facie satisfied the conditions for immunity under Section 270AA. The failure to dispose of the application by the AO and the technical breach of filing on plain paper were considered. The matter was set aside to the AO for a fresh decision.

What were the facts?

The Assessing Officer disallowed salary expenses and levied penalty under Section 270A. The CIT(A) reduced the penalty amount. The assessee had applied for immunity from penalty under Section 270AA, but the AO had not disposed of the application.

What were the issues?

Whether the assessee is eligible for immunity from penalty under Section 270AA when the Assessing Officer failed to dispose of the application. Whether a technical breach in filing the application can deny immunity.

Which sections of the Income-tax Act were involved?

Section 270A,Section 270AA,Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH: MUMBAI

Hearing: 24.06.2026Pronounced: 29.06.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH: MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER ITA No. 1858/Mum/2026 (Assessment Year: 2022-23)

Shri Rohitkumar Shriramlal Dy. Commissioner of Income Srivastava Tax Circle -1 2801, Asha Icon Kalyan vs. Mohan Plaza, Wayale Nagar, Shilphata Road, Davadi Sonar Khadakpada, Kalyan, District PadaDombivli East, Mumbai, Thane, Maharashtra, 421301 Maharashtra, 421203.

PAN: CFKPS5054R (Appellant) (Respondent) For Assessee : Shri Shriram Bajaj For Revenue : Shri Vinod Kumar V., Sr.DR Date of Hearing : 24.06.2026 Date of Pronouncement : 29.06.2026 O R D E R PER VIKRAM SINGH YADAV, A.M :

This is an appeal filed by the Assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [‘Ld.CIT(A)’], dated 06.02.2026, pertaining to Assessment Year (AY) 2022-23, sustaining the levy of penalty u/s.270A of the Income Tax Act, 1961 (‘the Act’), wherein the Assessee has taken the following grounds of appeal:

“(i) On the facts and in the circumstances of the case, and also in law, the Ld. C.I.T. (A) erred in confirming the penalty of Rs.3,41,699/- out of the total penalty levied by the Assessing Officer u/s 270A of the Act, in as much as, the Assessing Officer has failed to dispose of the application made u/s 270AA of the Act before levying penalty u/s 270A. Under the

ITA No. 1858/Mum/2026; A.Y. 2022-23 Shri Rohitkumar Shriramlal Srivastava circumstances, the levy of the penalty is invalid, illegal and unsustainable. In view of the same, your appellant prays that penalty of Rs.3,41,699/- be deleted in full. (ii) On the facts and in the circumstances of the case, and also in law, the Ld. C.I.T. (A) erred in confirming penalty of Rs.3,41,699/ out of the total penalty levied by the Assessing Officer u/s 270A of the Act. Your appellant submits that variation to the returned income owing to estimated addition out of the claim of salary expenses ought not to be considered as under- reporting of income within the meaning of section 270A(6). Hence, levy of penalty is invalid, illegal and unsustainable. In view of the same, your appellant prays that penalty of Rs.3,41,699/- be deleted in full. (iii) On the facts and in the circumstances of the case, and also in law, the Ld. C.I.T. (A) erred in confirming penalty of Rs.3,41,699/ out of the total penalty levied by the Assessing Officer u/s 270A of the Act. Your appellant submits that despite submissions made before the Assessing Officer the levy of penalty should not have been levied. Hence, levy of penalty is invalid, illegal and unsustainable. In view of the same, your appellant prays that penalty of Rs.3,41,699/- be deleted in full. “

2.

Briefly, the facts of the case are that the assessment in this case was completed u/s. 143(3) read with section 144B vide order dated 22.03.2024, wherein the Assessing Officer disallowed an amount of Rs.56,93,250/- in respect of Salary expenses claimed by the assessee. Separately, the proceedings u/s. 270A were initiated and notice u/s. 274 read with section 270A was issued on 22.03.2024. Thereafter, after the issuance of fresh show cause dated 12.08.2024 and taking into consideration the reply submitted by the assessee but not finding the same acceptable, the Assessing Officer held that the assessee has under-reported in consequence of misreporting his income to the tune of Rs.19,91,250/- and he is of the opinion that it is a fit case for imposition of penalty u/s. 270A of the Act and penalty at the rate of 200% in terms of provisions of Section 270A(9) read with 270A(8) was levied amounting to Rs.16,66,794/-vide order dated 26.09.2024 passed u/s. 270A of the Act.

3.

The assessee thereafter carried the matter in appeal before the ld. CIT(A), who has since reduced the quantum of the penalty and the

ITA No. 1858/Mum/2026; A.Y. 2022-23 Shri Rohitkumar Shriramlal Srivastava penalty of Rs. 16,66,794/- levied u/s. 270A was reduced to 50% of the tax payable on the under-reported income to Rs 3,41,699/-. Against the said order and findings of the ld. CIT(A), the assessee is in appeal before us.

4.

During the course of hearing, the ld. AR submitted that it is an admitted fact that the assessee has not filed any appeal before the ld. CIT(A) and the tax demand so raised by the Assessing Officer pursuant to completion of the assessment proceedings has also been deposited and thereafter, the assessee has moved an application u/s. 270AA of the Act, for seeking immunity from levy of penalty u/s. 270A of the Act. It was submitted that the Assessing Officer has failed to dispose off the application so filed by the assessee u/s. 270AA of the Act. It was submitted that the assessee satisfies the necessary conditions, for seeking immunity from levy of penalty u/s. 270A of the Act. In this regard, our reference was drawn to the provisions of Section 270AA of the Act, wherein under sub-section (1) to Section 270AA, the assessee is required to pay the tax and interest payable as per the order of assessment within the prescribed period of notice of demand. In this regard, it was submitted that the notice of demand was issued on 22.03.2024 and assessee has deposited the tax on 16.04.2024 within the period so prescribed in the notice of demand. It was further submitted that another condition for seeking immunity is that no appeal has been filed against the assessment order which is admittedly fulfilled by the assessee. Further, reference was drawn to sub-section (2) to Section 270AA of the Act and it was submitted that for seeking immunity from levy of penalty, the assessee is required to move an application within one month from end of the month in which the order has been received and such an application shall be made in such form and verified in such manner as previously prescribed. It was submitted that the assessee has moved the application seeking immunity from

ITA No. 1858/Mum/2026; A.Y. 2022-23 Shri Rohitkumar Shriramlal Srivastava levy of penalty on 20.04.2004 and it was fairly submitted that the said application was moved on a plain paper as against the prescribed form and however, the Assessing Officer has not disposed off the application either accepting or rejecting such application. In this regard, our reference was also drawn to the provisions of sub-section (3) to Section 270AA of the Act, wherein, one of the conditions for seeking immunity is that the proceedings for penalty u/s. 270A has not been initiated under the circumstances as referred to in sub-section (9) of Section 270A of the Act. In this regard, our reference was drawn to the assessment order and it was submitted that the penalty has been initiated for under-reporting of income and not for under-reporting of income on account of misreporting of the income and therefore, even though, the penalty has subsequently been levied u/s. 270A(9) read with section 270A(8) of the Act. However, as far as the initiation for levy of penalty is concerned, which is a condition precedent for seeking immunity u/s. 270AA of the Act, the assessee fulfils the necessary condition. It was accordingly submitted that given that the assessee fulfilled the requisite conditions u/s. 270AA of the Act, the Assessing Officer may be directed to dispose off the assessee’s application seeking immunity from levy of penalty.

5.

The ld. DR has been heard, who has relied on the order passed by the Assessing Officer as well as by the ld. CIT(A). At the same time, it was fairly submitted that the assessee’s application seeking immunity has not been disposed off by the Assessing Officer and where the Bench so decide, the matter may be remitted to the file of the Assessing Officer for examining the eligibility of the assessee for seeking immunity in terms of Section 270AA of the Act and thereafter, deciding the application so filed by the assessee.

6.

After hearing both the parties and considering the material available on record, we find that prima facie, the assessee satisfies the

ITA No. 1858/Mum/2026; A.Y. 2022-23 Shri Rohitkumar Shriramlal Srivastava necessary conditions for seeking immunity from levy of penalty in terms of Section 270AA of the Act, whereby the tax and interest payable has been duly deposited within the prescribed time period, no appeal as such has been filed before the ld. CIT(A) against the assessment order so passed by the Assessing Officer and the penalty has not been initiated under the circumstances as referred to in sub-section (9) of Section 270A of the Act. Admittedly, the assessee has already moved an application seeking immunity and filing the application on plain paper instead of requisite form is a mere technical breach and cannot deprive the assessee where the assessee otherwise satisfies the substantial conditions and in any case, the said application has not been rejected by the Assessing officer. We therefore find merit in the contention advanced by the ld AR that the assessee deserve the necessary opportunity in terms of seeking immunity from levy of penalty and given that the assessee has already moved an application which has not been disposed off by the Assessing Officer, we deem it appropriate to set aside the matter to the file of the Assessing Officer to allow the assessee to move the application in requisite form and thereafter, decide the matter afresh in accordance with law, after providing reasonable opportunity to the assessee.

7.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 29.06.2026

Sd/- Sd/- SIDDHARTHA NAUTIYAL VIKRAM SINGH YADAV (JUDICIAL MEMBER) (ACCOUNTANT MEMBER)

Mumbai, Dated: 29.06.2026 Karishma J. Pawar, SR. PS

ITA No. 1858/Mum/2026; A.Y. 2022-23 Shri Rohitkumar Shriramlal Srivastava

Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file

By Order

Dy./Asst. Registrar I.T.A.T, Mumbai

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