MOHAMMED ARMANULLA,BANGALORE vs. ASSESSING OFFICER, CIRCLE 3(3)(1), BANGALORE, HMT BUILDING

Briefly stated the facts of the case are the assessee, an individual, filed his return of income for the AY 2023-24 on 03.07.2023 declaring total income of Rs. 47,17,380/- after claiming deductions under various heads. However, the assessee revised his ITR on 11.09.2023 declaring a total income of Rs. 46,65,910/- claiming deductions u/s 80C,80D,80E,80GGC of the IT Act amounting to Rs.16,05,000/- which was restricted to Rs.15,25,000/-. The case was selected for scrutiny under CASS. Notice u/s 143(2) dt 19.06.2024 was issued and served on the assessee. Thereafter notices u/s 142(1) of the Act was issued on various dates. The learned Assessing Officer (Ld AO) in the absence of documentary evidences completed the assessment proceedings for A.Y. 2023-24 u/s 143(3) r.w.s. 144B of the Act on 25/11/2024. The assessed income was determined at Rs. 77,32,367/- by addition of Rs. 30,66,457/- on account of LTA of Rs. 31,574/-, Deduction u/s 80E of Rs. 3,00,000/- /- Deduction u/s 80GGC of Rs. 10,00,000/-, HRA exemption Rs.16,59,883/-, Deduction u/s 80D Rs.75,000/-. Thereafter the Ld AO initiated penalty proceedings u/s 270A of the Act for under reporting of the income in consequence of misreporting of income. The Ld AO observed that since the Penalty proceedings was initiated u/s 270A as “under reported his income in consequence of misreporting of income” immunity is not applicable in this case. He therefore levied a penalty of Rs.19,13,471/- u/s 270A(9) of the Act.

On being aggrieved by the order of the Ld AO the assessee filed an appeal before the Ld CIT(A) with a delay of 2 days. The Ld CIT(A) considering the failure by the assessee to establish any reasonable cause for the inordinate delay, dismissed the appeal.

On being aggrieved by the order of the Ld CIT(A) the assessee filed an appeal before the Tribunal by raising 9 grounds. The core issue emanating from the grounds is with respect levying of the penalty which was sustained by Ld CIT(A).

The learned Authorised Representative (Ld AR) submitted that the assessee has paid the demand in installments and has also not filed an appeal before the Ld CIT(A) against the quantum appeal and therefore entitled for immunity. He also submitted that that the assessee has filed Form 68 on 10.04.2025 u/s 270AA(2) of the Act, seeking immunity from the penalty. He therefore prayed that penalty be deleted.

Per Contra the learned Departmental Representative (ld DR) submitted that penalty was levied under section 270A(9) of the Act and hence immunity proceedings are not applicable. He also submitted that the assessee has claimed the deductions wrongly under Chapter VIA of the Act. He therefore prayed that the penalty be sustained.

We have heard the rival contentions and perused material available on record. It is an undisputed and admitted fact that the assessee falsely claimed deduction under Chapter VIA of the Act, The assessee could not produce any documentary evidences with respect to the deduction claimed in the return of income either before Revenue or before us. The Ld AO therefore disallowed the claim made by the assessee considering the non availability of evidences. Moreover we notice that the penalty proceedings has been initiated under section 270A(9) of the Act which is not covered under immunity proceedings prescribed u/s 270AA of the Act. We extract below the provisions of section 270AA which reads as follows:

On a plain reading of the above section we are of the view the immunity proceedings are permissible only when the penalty is levied under circumstances listed u/s 270A(2) of the Act and not when the penalty was levied under section 270A(9) of the Act.

In the instant case the Ld AO levied penalty under the circumstances mentioned in 270A(9) of the Act. We have therefore no hesitation to uphold the penalty order of the Ld AO. Accordingly, the issue raised by the assessee is dismissed.

In the result, appeal filed by the assessee is dismissed.