SUKRIT KALIA,KANSAL SINGLA AND ASSOCIATES vs. INCOME TAX OFFICER, ROHTAK

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ITA 1206/DEL/2026Status: DisposedITAT Delhi22 May 2026AY 2022-234 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty notice under section 270A was vague as it did not specify the limb of the section under which the penalty was initiated. Therefore, the notice and the consequent penalty order were quashed.

What were the facts?

The assessee claimed HRA exemption of Rs. 25,46,871/- against actual rent paid of Rs. 10,20,000/-. This led to an addition to total income and initiation of penalty proceedings under section 270A for underreporting of income.

What were the issues?

Whether a penalty notice under section 270A is sustainable if it does not specify the limb of the section under which the penalty is being initiated. Whether the assessee is eligible for immunity from penalty under section 270AA.

Which sections of the Income-tax Act were involved?

Section 270A,Section 10(13A),Section 143(3),Section 144B,Section 270AA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI

For Appellant: Shri T. N. Singla, C.A
For Respondent: Shri Choudhary N. C. Roy, Sr. D.R
Hearing: 13.05.2026Pronounced: 22.05.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI BEFORE SH. SATBEER SINGH GODARA, JUDICIAL MEMBER AND SH. NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 1206/Del/2026 (Assessment Year : 2022-23) Sukrit Kalia Vs. ITO Kansal Singla and Associates Ward – 2 SCO 80-81, 3rd Floor Rohtak-124 001 Sector – 17C, Haryana Chandigarh, - 160 017 PAN No. BPQPK 1376 B (APPELLANT) (RESPONDENT) Assessee by Shri T. N. Singla, C.A. Revenue by Shri Choudhary N. C. Roy, Sr. D.R. Date of hearing: 13.05.2026 Date of Pronouncement: 22.05.2026

ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER :

The captioned appeal preferred by the assessee is against the order of the learned Commissioner of Income-tax (Appeals), NFAC, Delhi dated 09.12.2025 arising out of penalty order passed under section 270A of the Income-tax Act, 1961 (in short “the Act”) dated 26.09.2024 by the Assessment Unit, Income-tax Department concerning Assessment Year 2022-23.

ITA No. 1206/DEL/2026 [A.Y 2022-23] Sukrit Kalia vs. ITO

2.

Brief facts of the case are that the assessee is an individual and filed his return of income for the A.Y. 2022-23 on 29.07.2022 by declaring a total income of Rs.79,62,950/-. The case of the assessee was selected for scrutiny under CASS and the reason for selection of the case was ‘Deduction from total Income under Chapter VI-A.” The case of the Revenue is that the assessee had paid actual rent amounting to Rs.10,20,000/- but he had claimed HRA exemption u/s.10(13A) of the Act amounting to Rs.25,46,871/-. As the assessee failed to furnish details regarding HRA exemption, the same was disallowed and added back to the total income of the assessee in the assessment completed u/s 143(3) r.w.s. 144B of the Income-tax Act on 13-03-2024 by determining total income of Rs.1,05,09,821/-. The AO further initiated penalty proceedings u/s 270A of the Act against the assessee for under reporting of income of Rs.25,46,871/- which was in consequence of misreporting thereof. The AO held that there is under reported income and levied the penalty of Rs.20,56,176/- (200% of tax payable) and passed the penalty order u/s. 270A of the Act dated 26.09.2024. 3. Aggrieved against the order dated penalty, the assessee preferred the appeal before the CIT(A) who dismissed the appeal of the assessee by observing that the assessee committed default within Page 2 of 5

ITA No. 1206/DEL/2026 [A.Y 2022-23] Sukrit Kalia vs. ITO meaning of section 270A of the Act and the AO has rightly levied the penalty u/s 270A of the Act to the tune of Rs.20,56,176/-. 4. Aggrieved, assessee is in appeal before the Tribunal with the following grounds : 1. “That the order of Ld. CIT(A) is bad and against the law. 2. That the notice issued by the Ld. CIT(A) is defective in law, as it fails to mention the specific limbs of Section 270A. 3. That the Ld. CIT(A) has wrongly passed order u/s 270A without clearly mentioning the specific limbs of the Section 270A. 4. That the Ld.. CIT(A) wrongly upheld penalty levied u/ s 270A of Rs.20,56,176/-, as none of the conditions of misreporting under section 270A are applicable and protection allowed under section 270A is not provided. 5. That the learned CIT(A) erred in law and on facts in upholding the penalty by treating the addition of Rs.25,46,871/- as a case of misreporting under section 270A, despite the fact that the assessee had disclosed all the income details and his counsel claimed wrong rebate. 6. That the Ld. CIT(A) has wrongly upheld penalty at the rate of 200% by treating the bonafide mistake as underreported income is in consequence of misreporting. 7. That the Ld. CIT(A) failed to appreciate the fact that the assessee had paid tax of Rs.15,17,369/- on 18.03.2024 within time, and is eligible for immunity from penalty under section 270AA. Therefore, the Ld. CIT(A) wrongly upheld the penalty levied u/s 270A. 8. That the previous counsel of the appellant wrongly showed receipt from profession amounting to Rs.48,69,664/- as salary income. 9. That the exemption of HRA u/s 10(13A) was wrongly claimed by the appellant's previous counsel. 10. That the penalty was imposed without proper opportunity of hearing, making it against the principles of natural justice. 11. That the assessee craves leave to add, amend, alter OR withdraw any ground of appeal before the final date of hearing.” 5. At the outset, learned Counsel for the assessee submitted that the specific limbs of section 270A of the Act was not mentioned clearly in the penalty notice and therefore, the penalty proceedings u/s 270A is vitiated. 6. Per contra, learned DR relied upon the order of penalty. Page 3 of 5

ITA No. 1206/DEL/2026 [A.Y 2022-23] Sukrit Kalia vs. ITO 7. We have heard the rival submissions and perused the material available on record. We find that the notice dated 13.03.2024 u/s 270A of the Act, enclosed in the paper book at page 1, does not mention under which specific limb of section 270A of the Act, the penalty is being initiated. We therefore, following the decision of the hon’ble Delhi High Court in the case of Prem Brothers Infrastructure LLP V NFAC (W.P.(C) 3841/2022 dated 10.05.2022, consider the notice u/s 270A, without specifying the sub-clause of section 270A for levying penalty, as vague and unsustainable in the eyes of law. Accordingly, the same is considered as void-ab-intio. The penalty notice u/s 270A and the consequent penalty order is accordingly quashed. Ground 2 is allowed. 8. In the result, appeal of the assessee in ITA No.1206/Del/2026 is allowed. Order pronounced in the open court on 22.05.2026

Sd/- Sd/- (SATBEER SINGH GODARA) NAVEEN CHANDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 22.05.2026 Priti Yadav, Sr. Ps* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Page 4 of 5

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