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Facts
The assessee filed an income tax return for AY 2018-19. The Assessing Officer made an addition of Rs. 1,67,44,623/- for undisclosed property sales and wrong interest claims, subsequently levying a penalty of Rs. 79,66,508/- under Section 270A for misreporting income. The assessee appealed to the CIT(A), pleading immunity due to payment of tax and not appealing the assessment, but the CIT(A) dismissed the appeal.
Held
The Tribunal observed that the assessee deliberately excluded sale proceeds from one property and wrongly claimed housing loan interest as business loss, characterizing these as acts of commission, not inadvertence. The Tribunal found no infirmity in the CIT(A)'s order upholding the penalty for misreporting income.
Key Issues
Whether the penalty levied under Section 270A for misreporting income, due to non-disclosure of property sale and incorrect interest claims, was justified despite the assessee's claim of clerical error and subsequent tax payment.
Sections Cited
270A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, VISAKHAPATNAM “DIVISION” BENCH, VISAKHAPATNAM
Before: SHRI K. NARASIMHA CHARY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
आदेश /O R D E R
PER SHRI S BALAKRISHNAN, ACCOUNTANT MEMBER:
This appeal is filed by the assessee against the order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal centre, Delhi [hereinafter in short “Ld.CIT(A)”] vide DIN & Order No.
I.T.A.No.504/VIZ/2024 Ramesh Sanghvi ITBA/NFAC/S/250/2023-24/1054723124(1) dated 31.07.2023 for the A.Y.2018-19 arising out of the penalty order passed under section 270A of the Act dated 29.03.2022.
Brief facts of the case are that, assessee is an individual filed its return of income admitting a total income of Rs. 4,66,13,660/- for the A.Y. 2018-19 on 12.02.2019. Assessee is engaged in the business of Futures and Options Trading and also derives income from salary, House property and income from other sources. The case was selected for scrutiny under CASS and after verification of the issues, Ld. Assessing Officer [hereinafter in short “Ld. AO"] made an addition of Rs. 1,67,44,623/- arising out of sale of property and wrong claim of interest. Ld. AO thereafter initiated penalty proceedings under section 270A stating that assessee has misreported income to the extent of Rs.1,67,44,623/- and hence 200% of the tax payable is levied as penalty which is amounting to Rs.79,66,508/-.
3. Aggrieved by the order of the Ld. AO, assessee filed an appeal before the Ld. CIT(A). Before Ld. CIT(A), assessee contested that the assessee has paid the demand along with interest as specified in the demand notice and has also not filed any appeal against the above order. Therefore, he pleaded immunity made before Ld. AO was once again reiterated before Ld. CIT(A) by the assessee. However, Ld. CIT(A) did not consider the request of the assessee and dismissed the appeal of the assessee.
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I.T.A.No.504/VIZ/2024 Ramesh Sanghvi 4. Aggrieved by the order of the Ld. CIT(A), assessee is in appeal before us by raising the following grounds of appeal: -
1. On the facts and in the circumstances of the case, the order of the ld. CIT(A) is erroneous both on facts and in law.
2. The Ld. CIT(A) erred in sustaining the penalty levied by the AO of Rs.79,66,508 u/s 270A of the Act, on the alleged ground that the Appellant has failed to adduce satisfactory explanation with respect to the misrepresentation of facts, clearly ignoring the facts that the failure is due to the clerical mistake of the accountant, which is human in nature.
The Ld. CIT(A) erred in ignoring the facts that the entire transactions were routed through banking channels and the TDS deducted on the sale consideration was duly reported in Form 26QB and is also being reflected in Form 26AS and also when the Appellant was informed by the AO with the additions, the Appellant has duly agreed to the additions and remitted the tax to the Government.
Any other ground that may be urged at the time of hearing.”
Ground Nos. 1 & 4 are general in nature and needs no adjudication.
Ground Nos. 2 & 3 are relating to the penalty levied by the Ld. AO and sustained by the Ld. CIT(A).
None appeared on behalf of the assessee.
Ld. Departmental Representative [hereinafter in short “Ld. DR”] relied on the orders of the Revenue Authorities.
We have heard Ld. DR and perused the material available on record. We proceed to adjudicate the issues based on the material available on record. It is an admitted fact that assessee has not disclosed sale of property amounting to Page No. 3
I.T.A.No.504/VIZ/2024 Ramesh Sanghvi Rs.84,92,000/- while computing the capital gains during the impugned assessment year. Further, it is also noticed that assessee has claimed the interest of Rs. 82,52,623/- which was paid towards the Home Loan from ICICI Bank as loans from business while filing return of income. The claim of the assessee is his Accountant who file the return of income has wrongly declared these amounts and has also failed to include the sale of property even though it was available in the Form 26QB and reflected in Form 26AS. The contention of the assessee could not be accepted because of the reason that the assessee has sold six (6) properties as follows: -
Value as per Sr.No. TSN Form 26QB (Rs.) 1. 1518001413922 84,92,000/- 2. 1518001413925 1,28,62,850/- 3. 1518001413923 65,27,750/- 4. 1518001413924 1,00,00,000 5. 1518001413920 64,51,000 6. 1518001413921 1,62,94,000 Gross Value 6,08,27,600
Out of which assessee has declared income from five (5) properties and has deliberately excluded the sale proceeds from one property. Further, assessee has claimed interest on the housing loan as loss from business which was also in our opinion is not an act of inadvertence but an act of commission. Accordingly, the Revenue Authorities as per provisions of section 270A of the Act levied the penalty for misreporting the income while filing the return of income. We also do not find any representation from the assessee to prosecute the case on his
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I.T.A.No.504/VIZ/2024 Ramesh Sanghvi behalf. Under these circumstances from the facts and the material available on record we do not see any infirmity in the order of the Ld. CIT(A) and thereby no interference is required. The grounds raised by the assessee are dismissed.
In the result, appeal of the assessee is dismissed.
Order pronounced in the open court on 14th February, 2025.