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Facts
The assessee filed an appeal challenging an ex-parte penalty order under Section 270A of the Income Tax Act for AY 2020-21. The grounds included denial of opportunity and incorrect levy of penalty.
Held
The assessee later decided to settle the dispute under the Direct Tax Vivad Se Vishwas Scheme, 2024, and paid the determined amount. Consequently, the appeal was withdrawn.
Key Issues
Whether the penalty under Section 270A was justified, and whether the assessee was denied a proper opportunity to be heard before the ex-parte order was passed.
Sections Cited
270A, 270AA
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Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE
Before: SHRI PRASHANT MAHARISHI, VICE – & SHRI SOUNDARARAJAN K.
ORDER
PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the ex-parte order of the NFAC, Delhi dated 06/08/2024 in respect of the A.Y. 2020-21 on the following grounds of appeal:
1. The orders of the authorities below in so far as levying penalty u/s 270A of the Act against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.
2. The learned CIT[A] is not justified in disposing off the appeal ex-parte without allowing sufficient and real opportunity to the appellant to represent the case since notices dated 08/07/2024, 16/07/2024 and 24/07/2024 15 days, which notices were not observed by the appellant and hence, the impugned order requires to be cancelled.
3. Without prejudice to the above, the appellant denies himself liable to penalty imposed u/s. 270A of the Act of Rs. 5,70,498/- for the alleged under-reporting of income in consequence of mis-reporting in respect of the disallowance of Rs. 9,14,253/- made in the assessment order under the facts and circumstances of the appellant's case.
4. The learned CIT[A] ought to have appreciated that the application for immunity against the imposition of penalty made by the appellant u/s 270AA of the Act to the JAO had not been disposed off vide an order accepting or rejecting the same within the time prescribed and hence, no penalty can be imposed u/s. 270A of the Act under the facts and circumstances of the appellant's case.
Without prejudice to the above, the authorities below ought to have appreciated that the that levy of penalty is discretionary and not mandatory as the provisions of section 270A of the Act employs the word "may" and not "shall" and thus having regard to the facts and in the circumstances of the appellant's case, the learned Assessment Unit ought to have exercised his discretion and refrained from imposing penalty u/s 270A of the Act under the facts and circumstances of the appellant's case.
The authorities below are not justified in levying penalty u/s.270A of the Act, of Rs. 5,70,498/- at 200% of the tax payable on the alleged under-reported income in consequence of misreporting on the facts and circumstances of the appellant's case.
Without prejudice to the above, the penalty levied at 200% of the taxes is excessive and liable to be reduced substantially.
Without prejudice to the above, the authorities below ought to have appreciated that there was no under- reporting of income by the appellant and no penalty was imposable in terms of clause(a),(b) and (c) of sub-section [6] of Section 270A of the Act under the facts and in the circumstances of the appellant's case.
9. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs.”
The assessee raised several grounds on merits insofar as the levy of penalty u/s. 270A of the Act.
In spite of that the assessee filed a letter on 02/12/2024 and submitted that they are evaluating to settle the disputes under the Direct Tax Vivad Se Vishwas Scheme, 2024. Thereafter, the assessee submitted a letter dated 16/12/2024 and enclosed the form 2 in which the revenue had directed the assessee to pay a sum of Rs. 1,42,625/- in order to settle the dispute. Pursuant to the said notice, the assessee also remitted the amount of Rs. 1,42,625/- on 14/12/2024 and enclosed the copy of the said challan along with this letter. The assessee also enclosed the form 3 dated 18/12/2024. We take the above submissions on record and dismissing the appeal filed by the assessee as withdrawn.
In the result, the appeal filed by the assessee is dismissed as withdrawn.
Order pronounced in the open court on 16th January, 2025.