ROCKLINE ENTERTAINMENTS PRIVATE LIMITED ,BENGALURU vs. DCIT, CENTRAL CIRCLE-2(1), BANGALORE

ITA 1561/BANG/2025Status: DisposedITAT Bangalore28 September 2026AY 2017-1813 pages
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What did the Tribunal hold?

The Tribunal held that the penalty proceedings initiated under section 274 read with section 270A of the Act are vitiated due to a defective notice. The Tribunal noted that section 270A(2) contains different circumstances for under-reporting of income, and the AO was required to specify the particular clause applicable to the assessee's case. The notice issued was general, referring only to 'under-reporting of income' without specifying the relevant sub-clause. This lack of specificity deprived the assessee of a proper opportunity to defend its case, violating the principles of natural justice. The Tribunal relied on the decision of the Madras High Court in PCIT v. Shri R. Elangovan, which held that where a section provides for different contingencies for penalty, the AO must specify the clause under which the assessee is proceeded against. Consequently, the penalty levied under section 270A was deleted. The appeals of the assessee were allowed.

What were the facts?

The assessee, Rockline Entertainments Private Limited, is in appeal against the orders of the CIT(A) confirming the levy of penalty under section 270A of the Income-tax Act, 1961, for Assessment Years 2017-18 to 2019-20. For AY 2017-18, the assessee initially declared an income of Rs. 1,31,68,740/-, processed under section 143(1). A search under section 132 was conducted on 03.10.2019, following which the assessee filed a revised return under section 153A, declaring an additional income of Rs. 16,50,000/-. The Assessing Officer (AO) accepted this additional income, completing the assessment at Rs. 1,48,18,740/-. The AO initiated penalty proceedings under section 270A, levying a penalty of Rs. 2,72,769/- for under-reporting of income, which was confirmed by the CIT(A). The assessee's appeals challenge this penalty.

What were the issues?

1. Whether the penalty proceedings initiated under section 274 read with section 270A of the Act are vitiated in law due to a vague notice? (Question of law). The assessee argued that the notice issued by the AO under section 274 r.w.s. 270A did not specify the particular limb of under-reporting of income under which the penalty was proposed, thus failing to inform the assessee of the precise charge and violating principles of natural justice. The assessee relied on the decision in Mr. Nateshan Sampath vs. DCIT. The revenue contended that the notice clearly specified the charge as 'under-reporting of income'. (Note: The judgment discusses section 271AAB in detail, but the primary issue framed by the assessee and the Tribunal's decision pertains to the validity of the notice under section 270A, as indicated in the initial grounds of appeal and the Tribunal's ultimate finding. The discussion on 271AAB appears to be a comparative analysis or a related point that was considered.)

Which sections of the Income-tax Act were involved?

Section 270A,Section 139,Section 143(1),Section 132,Section 153A,Section 143(3),Section 274,Section 271AAB

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Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI WASEEM AHMED & SHRI SANDEEP SINGH KARHAIL

PER SHRI WASEEM AHMED, ACCOUNTANT MEMBER:

These three appeals filed by the assessee are directed against the orders passed by the Learned Commissioner of Income Tax Appeals (hereafter Ld. CIT(A)) under section 270A of the Income-tax Act, 1961 (hereafter the Act), for A.Ys. 2017-18 to 2019-20. Since the facts and issues invo

The order continues below.

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