DAGGUBATI VENKATESH,CHENNAI vs. DCIT., CENTRAL CIRCLE-1(2), HYDERABAD

Penalty in this matter is levied under section 270A(9) of the Act on the ground of under reported income in consequence of any misreporting thereof by the assessee. Learned AR argued that the learned Assessing Officer did not specify the distinct instance of under reporting or misreporting as enumerated under section 270A(9) of the Act and, therefore, the penalty order is bad under law and is liable to be quashed. He placed reliance on the view taken by the Co-ordinate Bench of the Mumbai Tribunal in the case of Saltwater Studio LLP, in vide order dated 22/05/2023. He also placed reliance on the view taken by a coordinate Bench in the case of Suresh productions vs. DCIT in /Hyd/ 2023 for the assessment year 2017-18 by order dated 29/2/2024 decided on similar facts.

Learned DR vehemently relied upon the orders of the Revenue authorities and submitted that certain times the instances will be over lapping and suffice it to refer the head under which the penalty is levied, which in this matter happens to be under reporting as a consequence of misreporting, covered by section 270A(9) of the Act.

We have gone through the record in the light of the submissions made on either side. Relevant portion of the penalty order in this case reads that,- “8. By considering facts of the case, I am satisfied that this is a fit case for levy of penalty u/s 270A for under reporting of income in consequence of misreporting as the assessee has under reported the income in the return of income to the tune of Rs.30,000/-. The under reported income of Rs.30,000/- would not have been brought to tax, had the search operation not conducted in the case and had the case not selected for assessment.

The penalty referred in subsection (9) of section 270A, where under- reported income is in consequence of any mis-reporting thereof by any person, the penalty shall be equal to two hundred per cent of the amount of tax payable on under-reported income.

The amount considered for levy of penalty u/s 270A(9) is Rs. Rs.30,000/- and tax payable on the same works out to be Rs.10,382/-. Hence, Penalty leviable u/s 270A at the rate of two hundred per cent on tax payable is Rs.20,764/- ( Rupees Twenty Thousand Seven Hundred and Sixty Four only).”

It is very clear from the above that the learned Assessing Officer did not spell out the specific instance covered by 270A(9) of the Act in the case of the assessee. On the aspect of impact of non mentioning of the assessee’s lapse falling in ken of instances given in clause (a) to (f) of sub-

This view is followed by the coordinate Bench in the case of Suresh productions (supra) to delete the addition made without specifying any of the instances enumerated under clause (a) to (f) of subsection 9 of section 270 of the Act. Respectfully following the view taken by the Co-ordinate Bench of the Tribunal, we hold that for non-specifying the instances given in clause (a) to (f) of sub-section 9 of section 270 of the Act, we hold that the penalty order suffers the violation of principles of natural justice and accordingly quash the same.