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Facts
The assessee's appeal challenges a penalty of Rs.15,37,754/- levied under Section 270A of the Income Tax Act for under-reporting income of Rs.1,02,96,316/-, which arose from the reversal of an excess gratuity provision. The assessee had claimed significantly higher gratuity expenses than actually paid and failed to explain this discrepancy during assessment proceedings.
Held
The Tribunal remitted the core legal issue, which concerned the validity of the penalty notice under Section 270A for failing to specify the exact clause of under-reporting of income, back to the Learned CIT(A)/NFAC for fresh adjudication. Other grounds of appeal were deemed premature.
Key Issues
Whether a penalty notice issued under Section 270A of the Income Tax Act is valid if it does not specify the particular clause under Section 270A(2) under which the income is alleged to be under-reported.
Sections Cited
270A, 274, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE
Assessment Year : 2017-18 The Saswad Mali Sugar Vs. ACIT, Circle-1, Solapur. Factory, Malingar Tal. Malshiras, Dist. Solapur- 413108. PAN : AAACT9821D Appellant Respondent Assessee by : Shri B. D. Bhide Revenue by : Shri A. D. Kulkarni Date of hearing : 02.04.2025 Date of pronouncement : 30.05.2025 आदेश / ORDER
PER MANISH BORAD, AM:
This appeal filed at the instance of assessee is directed against the order of Ld. CIT(A)/NFAC u/s 250 of the Act dated 06.01.2025 which is arising out of the penalty order u/s 270A of the Act for Assessment Year 2017-18 framed on 15.09.2021 by the ITO, NFAC, Delhi.
Though the assessee has raised various grounds of appeal
but all are directed against the findings of the Ld. CIT(A)/NFAC 270A of the Act at Rs.15,37,754/- levied by the Assessing Officer for under-reporting of income of Rs.1,02,96,316/- for reversal of excess gratuity provision.
3. At the outset, Ld. Counsel for the assessee referring to the legal issue raised in ground of appeal no.1(ix) that Ld. Faceless Assessing Officer (FAO) in the notice u/s 270A r.w.s. 274 of the Act dated 26.08.2021 failed to state the specific reason for which penalty u/s 270A of the Act has been charged. It is also submitted that this legal issue being raised for the first time remained to be adjudicated by Ld. CIT(A)/NFAC.
4. Ld. DR, on the other hand, stated that since this legal issue has been raised for the first time, the same may be remitted back to the file of the Ld. CIT(A)/NFAC for necessary adjudication.
5. We have heard rival contentions and perused the records placed before us. We observe that the assessee claimed gratuity expenses of Rs.1,20,92,766/- and paid a gratuity at Rs.17,96,450/-. The assessee failed to furnish any explanation about the excess claim during the assessment proceedings for A.Y. 2017-18 completed on 24.12.2019. Ld. FAO initiated the penalty 6. Referring to the above show-cause notice, Ld. Counsel for the assessee has raised a legal ground claiming that the impugned penalty proceedings deserves to be quashed as no proper notice has been issued to the assessee because Ld. FAO has not specified as the case of the assessee falls under which clause i.e. clause 2(a) to 2(g) for the alleged under-reporting of income. The said legal ground challenging the assumption of jurisdiction for carrying out the impugned penalty proceedings has been raised for the first time before this Tribunal. Since legal ground can be raised at any stage of legal process if they are based on the facts already on record and does not require any fresh evidence then in light of the judgement of Hon’ble Apex Court in the case of National Thermal Power Co. Ltd. vs. CIT, 229 ITR 383 (SC), such legal issue deserves to be admitted for adjudication. However, since this legal issue has been raised for the first time before this Tribunal, Ld. CIT(A)/NFAC could not dealt with this legal issue. Therefore, being fair to both the parties and in the larger interest of justice, we remit back this legal issue to the file of Ld. CIT(A)/NFAC for necessary adjudication to be carried out in light of settled judicial precedent which shall be referred to by the assessee in set aside proceedings for which