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Facts
The assessee, an individual, failed to furnish the return of income under Section 139(1). Upon receiving information about the sale of an immovable property and commission income, the case was reopened under Section 148. The assessee then filed a return disclosing capital gains and business income. The Assessing Officer completed the assessment under Section 143(3) r.w.s. 147, determining a higher total income, and initiated penalty proceedings under Section 270A.
Held
The Tribunal noted that the assessee had his books of accounts audited and disclosed the income in the audit report, which was accepted by the Assessing Officer. While the assessee faulted in furnishing the return due to family casualty, a penalty for non-furnishing was already imposed under Section 271F. The Tribunal found merit in the assessee's argument that there was no misreporting.
Key Issues
Whether the penalty levied under Section 270A for alleged under-reporting due to misreporting is justified when the income was already disclosed in an audited report and accepted by the AO, and whether the penalty notice and order specified the relevant sub-clause of Section 270A.
Sections Cited
139(1), 148, 143(3), 147, 270A, 270A(9), 271F, 44AB, 194H
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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE
Assessment Year : 2018-19 Faruk Rafik Mujawar, Vs. Assessment Unit, 21/202, Opp. Sanjay Income Tax Department. Foundry, Station Road, Ichalkaranji- 416115. PAN : ABNPM0541N Appellant Respondent Assessee by : Shri Pramod S. Shingte Revenue by : Shri Uodol Raj Singh Date of hearing : 10.11.2025 Date of pronouncement : 15.12.2025 आदेश / ORDER
PER VINAY BHAMORE, JM:
This appeal filed by the assessee is directed against the order dated 03.03.2025 passed by Ld. CIT(A)/NFAC for the assessment year 2018-19.
The appellant has raised the following grounds of appeal :-
1. On the facts and circumstances of the case and in law, the order imposing penalty u/s 270A is invalid inasmuch as the notice initiating the penalty proceedings as well as the assessment order and the penalty order is silent on the limb of S.270A (9) under which the penalty is levied. The appellant prays that it be held accordingly.
2. The CIT(A), NFAC, erred in confirming the levy of penalty by the AO u/s 270A, for under reporting of income inconsequence of misreporting, in respect of income declared by the appellant in his return of income filed in response to notice u/s 148.
The appellant submits that there being no misreporting on his part, levy of penalty in this respect is incorrect. The appellant prays that, the AO be directed delete the penalty. The appellant craves leave to add to, amend, alter, delete or modify all or any of the above ground of appeal or raise a new ground of appeal before or at the time of hearing.”
3. Facts of the case, in brief, are that the assessee is an individual and has not furnished his return of income u/s 139(1) of the IT Act. On the basis of information available on insight portal of ITBA that the assessee has sold an immovable property of Rs.51,30,000/- and is also in receipt of commission on which TDS was deducted u/s 194H of the IT Act and the return of income has not been furnished, the case of the assessee was reopened and notice u/s 148 of the IT Act was issued on 31.03.2022 to the assessee. In response to this notice, the assessee furnished his return of income disclosing capital gain from sale of immovable property and business income of Rs.6,53,339/-. The assessee also furnished audited balance sheet, profit & loss account and audit report in Form 3CB & 3CD duly certified by a Chartered Accountant, this audit report was duly uploaded on income tax portal on 31.10.2018. After considering the submissions of the assessee, the Assessing Officer completed the assessment u/s 143(3) r.w.s. 147 of the IT Act by determining total income at Rs.20,55,809/- as against the income returned by the assessee at Rs.20,54,170/-. The Assessing Officer also initiated 270A sub-section (9) of the IT Act and vide order dated 29.08.2023 imposed a penalty of Rs.6,66,744/- u/s 270A(9) of the IT Act.
Being aggrieved with the above penalty order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. Since the assessee remained absent, Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee and confirmed the penalty order passed by the Assessing Officer.
It is this order against which the assessee is in appeal before this Tribunal.
Ld. AR appearing from side of the assessee submitted before us that the order passed by Ld. CIT(A)/NFAC is unjustified. Ld. AR submitted before us that the assessee is a regular income tax return filer, however for the period under consideration due to some causality in the family the return of income could not be furnished. Ld. AR further submitted that regular books of accounts were maintained and audit report u/s 44AB of the IT Act was obtained from a Chartered Accountant and it was also uploaded on the income tax portal which is evident from the copy of Form 3CB & Form 3CD report downloaded from the income tax portal. Accordingly, Ld. AR submitted that the income disclosed in the Assessing Officer and no addition (except Rs.1640/-) was made in the income disclosed in the audit report which proves that there is no under-reporting of income which is in consequence of misreporting. Apart from above, Ld. AR also submitted that in the assessment order, penalty order and even in the notice issued u/s 274 r.w.s. 270A of the IT Act, the sub- clause under which penalty is imposed was not mentioned, therefore, the assessee do not know under which sub-clause the penalty was proposed to be imposed. Accordingly, Ld. AR requested to delete the penalty imposed u/s 270A(9) of the IT Act on legal as well as factual ground.
Ld. DR appearing from the side of the Revenue relied on the orders passed by the subordinate authorities and requested to confirm the same.
We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book as well as copy of Form 3CB and Form 3CD furnished by the assessee. After hearing Ld. AR we find some force in the arguments of assessee that there is no under-reporting in consequent of misreporting, since the assessee got his books of accounts audited and uploaded Form 3CB and Form 3CD audit report on the income tax portal on 31.10.2018. From the perusal of audit report, we also find that in the audited capital account income from sale of agricultural land, commission income and dividend income was already disclosed by the assessee. From the perusal of audited trading account it is also apparent that the assessee has disclosed total turnover of Rs.1,14,24,001/- and consequently income from business of Rs.6,53,329/- was already disclosed in the audit report furnished on the income tax portal on 31.10.2018. Even the Assessing Officer also accepted the same income disclosed by the assessee in the above said audit report and no other addition (except Rs.1640/-) was made in the assessment order passed u/s 143(3) r.w.s. 147 of the IT Act. However, at the same time we find that the assessee faulted in furnishing the return of income due to casualty in family. In this regard, we find that penalty for non-furnishing return of income has already been imposed u/s 271F of the IT Act and interest for delayed payment has also been levied on the assessee.
Considering the totality of the facts of the case and in view of our above discussion, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and remand the matter back to his file with a direction to decide the appeal afresh as per fact and law and also in the light of our discussion in preceding paragraphs and after