ARVIND KRISHAN OBEROI,MUMBAI vs. INCOME TAX OFFICER WARD 17(1)(1), MUMBAI, MUMBAI

On the facts and in the circumstances of the case, the orders u/s 250, 270A and 270AA are bad in law because non-filing of a return u/s 139 followed by filing a valid return u/s 148 cannot constitute "misrepresentation or suppression of facts" within the meaning of Section 270A(9)(a); the return was duly furnished in compliance with statutory notice, disclosing full particulars of income accepted by the Department.

On the facts and in the circumstances of the case, the order u/s 270AA rejecting the immunity application is bad in law because it was passed after expiry of the period of one months prescribed in Section 270AA(4) and is therefore time-barred and without jurisdiction.

On the facts and in the circumstances of the case, the order u/s 270AA is bad in law because it was passed without providing an opportunity of being heard as mandated by the proviso to Section 270AA(4), violating principles of natural justice and rendering the order null and void.

On the facts and in the circumstances of the case, the order u/s 250 and is 270A are bad in law because the explanation furnished by the appellant was bona fide and all material facts were disclosed; hence by virtue of Section 270A(6)(a) no penalty could be imposed.

On the facts and in the circumstances of the case, the order u/s 250 and u/s 270AA are bad in law because once the conditions under Section 270AA(1) were fulfilled-payment of tax and interest within time and non-filing of appeal-the Assessing Officer was duty-bound under Section 270AA(3) to grant immunity; the refusal amounts to gross misapplication of law.

On the facts and in the circumstances of the case, the order u/s 250 is bad in law because the learned CIT(A) failed to appreciate that the reassessment accepted the income as returned; consequently, no variation or concealment existed to warrant penalty.

The brief facts of the case are that the aassessee is a non filer of the income tax return. Further, information was available on the list of Non-filers in the NMS on ITBA for the F.Y. 2016-17 relevant to A.Y. 2017-18, the assessee having entered into huge financial transactions. Therefore, the case of the assessee was reopened as per the provisions of section 148A of the Act and notice u/s 148 of the Act was issued. During the course of assessment proceedings the assessee has filed ROI in response to notice u/s 148 and declared total income of Rs 27,18,800/-. Assessment order u/s 147 r.w.s 144B was completed on 31.05.2023 and accepting income declared in ROI and initiated penalty proceedings u/s 270A for under reporting of income in consequence of misreporting of income as the assessee has suppressed the facts which covers u/s 270A(9)(a) of the Act as ROI filed after issue of notice u/s 148 of the Act. Hence, the penalty u/s 270A of the Act is a sum equal to two hundred per cent of the amount of tax payable on under-reported income. Hence penalty u/s 270A of the Act is clearly levied

The Ld. AR advanced his argument and contended that the Ld. AO erred in application of section 270A(9) in case of the assessee. The assessee first time filed the return in pursuance of notice u/s 148 of the Act. The Ld. AR submitted a written note. The relevant paragraphs are reproduced as below:-

It is further submitted that section 270A(9)(a) deals with cases of misrepresentation or suppression of facts. Such misrepresentation or suppression must exist in the course of the relevant assessment/reassessment proceedings.

Without prejudice, where a return of income is filed for the first time in response to notice under section 148, the matter, at the highest, may fall within the deeming framework relating to under-reported income under section 270A i.e., 270A(2)(b), 270A(3)(b)(B) and 270A(10)(a). In fact, such case is deemed to be under-reporting. Therefore, deeming fiction cannot automatically be extended tomisreporting of income. Misreporting unnder section 270A(9) is a distinct category and can be invoked only if one of the specific circumstances set out therein is established.

There is no provision in the Act to the effect that mere non-filing of an original return under section 139(1), followed by filing of a return for the first time in response to notice under section 148, would by itself amount to suppression or misrepresentation of facts so as to constitute misreporting of income or would be a deemed mis-reporting case.

It is further submitted that when the relevant provisions concerning deemed under-reporting were amended by the Finance (No. 2) Act, 2019, there was no corresponding amendment in section 270A(9). This itself indicates that a case of first-time filing of return in response to section 148 cannot, by implication, be treated as deemed misreporting of income.

The Ld. DR strongly supported the orders passed by the revenue authorities. However, with regard to the filing of Form No. 68 by the assessee under section 270AA(1) of the Act, the Ld. DR did not advance any specific argument nor point out any adverse finding or defect in the said submission made by the assessee. The observation of the Ld. CIT(A) is reproduced as below:- “6.3 Further, the appellant has stated that the AO erred in not granting immunity from imposition of penalty u/s 270A of the Act as per the provisions of Section 270AA of the Act. As per the provisions of section 270AA(3) of the Act, immunity from imposition of penalty u/s 270A of the Act is not available if the penalty proceedings u/s 270A of the Act are initiated under the circumstances referred to in sub-section (9) of the said section 270A of the Act. In the present case, the penalty proceedings u/s 270A of the Act are initiated under the circumstances referred u/s 270A(9)(a) i.e., for suppression of facts. Accordingly, the AO decision in not granting immunity u/s 270AA of the Act is found to be in line with the provisions of Section 270AA of the Act. Further, the appellant has stated that the AO has erred in neglecting provisions of Section 270A(6)(a) of the Act while levying penalty as he had truly and fully disclosed all materials facts to substantiate the explanation thereof. As per the provisions of section 270A(6)(a) of the Act, the appellant has to offer explanation to the satisfaction of the AO or the Commissioner (Appeals) for not levying the penalty u/s 270A of the Act. In the present case, during the appellant proceedings the appellant has stated that the return of income for AY 2017-18 was

The same constitution of the ITAT Mumbai, Bench “F”, has adjudicated an identical issue concerning the grant of immunity under section 270AA of the Act in the case of Mehul Pravinchandra Sheth vs. DCIT (ITA No. 4702/Mum/2025), date of pronouncement 05/03/2026. In the said decision, the Mumbai Tribunal has decided the issue by placing reliance on the order of the Coordinate Bench of the ITAT, Patna, in the case of Sangam Almirah Pvt. Ltd. vs. NFAC, Delhi (ITA No. 338/PAT/2025), order dated 27/10/2025. The relevant observations contained in paragraphs 7 and 8 of the aforesaid decision are reproduced hereunder: “7. Since the assessee had filed the application u/s 270AA seeking immunity from imposition of penalty within time, it was incumbent upon the Ld. AO to pass an order within one month from the end of the month in which the application seeking immunity was filed, which has not been done in this case. Further, neither in the assessment/penalty order nor even in the appeal order of the Ld. CIT(A) has it been specified as to under which clause of sub-section (9) the assessee's case was falling so as to treat it as misreporting of income referred to in sub-section (8) of section 270AA. Since the assessee had substantively complied with the provision of section 270AA by not contesting the order and had paid the tax and interest payable and no appeal against the order referred to in clause (a) of sub-section (1) of section 270AA was filed,

We have carefully considered the rival submissions and perused the material available on record. It is an admitted position that the assessee, in response to notice issued under section 148 of the Act, filed the return of income which has been accepted by the Ld. AO without any variation. It is further not in dispute that the assessee had discharged the entire tax and interest liability and had also filed Form No. 68 within the prescribed time seeking immunity under section 270AA of the Act. On a holistic consideration of the facts, we find that the Ld. AO has proceeded to levy penalty under section 270A of the Act without adjudicating the assessee’s application filed under section 270AA(1) in the manner contemplated under section 270AA(3) and (4) of the Act. Further, no cogent finding has been recorded by the revenue authorities to demonstrate that the case of the assessee falls within the ambit of “misreporting of income” as envisaged under section 270A(9) of the Act. Mere non-filing of return under section 139, followed by filing of return in response to notice under section 148, in absence of any adverse material during reassessment proceedings, cannot ipso facto be equated with misrepresentation or suppression of facts. We also note

In the net result, the appeal of the assessee bearing ITA No.8712/Mum/2025 is allowed. Order pronounced in the open court on 28th day of April 2026. Sd/- Sd/- (GIRISH AGRAWAL) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 28/03/2026 SAUMYASr.PS Copy of the Order forwarded to: 1. अपीलाथ�/The Appellant , 2. �ितवादी/ The Respondent.