ASMEETA INFRATECH LIMITED,BHIWANDI vs. ITO WARD 1(1), KALYAN, KALYAN

In the subsequent appeal before the ld.CIT(A),it was submitted by the assessee that concerned clerk inadvertently forgot to punch the Income from Other sources of Rs.15,65,795/- although the same was considered at the time of preparation of computation of income. The mistake was due to human typographical error. However,the contention was rejected by the appellate authority observing that if the appellant identified the typographical error, it should have corrected the same by filing the revised return of income. However, it failed to do the same. Не upheld the penalty order.

Before us, the ld.AR has contended that certain addition was made by the AO which pertained to a bonafide clerical mistake which was admitted by the assessee before him and no appeal was filed further by the assessee.It is stated that the penalty was for Unreported income and not for Misreporting. Tax was not payable. In reply to penalty notice, the assessee had replied as under before AO: “On going through the facts of the case, assessee confessed to a typographical error due to the fact that while filing ITR for the year the clerk filing the return, seemed to have inadvertently forgotten to punch the income from other sources of INR 15,65,795/- although the same was duly considered at the time of preparing the computation of income it was also pointed out that the typographical error was revenue neutral for the year in as much as the same would not affect the tax liability of the appellant it was a mistake apparent from records on account human error and was rectifiable u/s 154 of the Act as well. The assessee submits that it is not liable for any penalty u/s 270A as it has neither under-reported any income nor has misreported any income. There had been a genuine and bonafide error which was readily accepted by the assessee. The income can be said to be under- reported if the same is being hidden from the department and particulars of the same are not disclosed. Obviously, this is not the case here as no income is hidden from the department and the detail already forms part of submissions and disclosures of the assessee itself. Page 3 Α.Υ. 2017-18 Asmeeta Infratech Limited Thus, in the light of above mentioned facts and circumstances we humbly pray to your good sell to kindly drop the penalty proceedings as the error was merely a typographical error. Moreover, the assessee company had duly discharged its onus while offering the bonafide explanation during the course of assessment proceedings hence by virtue of clause (a) to sub-section (6) to section 270A penalty should not be levied.

1 The ld.AR has submitted that during the year, the assessee company had Other income by way of interest on loans, interest on margin money and Interest on FD as per Note 18 of final accounts as under: S.No Particulars Amount

2 These were clearly income from business. But while making computation of income, the interest income was by mistake shown under the head 'Income from other sources and accordingly computation of income was prepared. But while filing return of income, it escaped attention and was not shown.Though, it was shown as Income from other sources, it was in fact, business income as the assessee did not have any surplus funds. On the contrary, there were huge accumulated losses of more than Rs.16 cr. as per note 4 of the Balance sheet. Hence, income from interest was in normal course of business and accordingly business income.Bank FDs were made as margin money. Hence this interest is business income as it arises in course of business.All interest income were from loans etc. which were given out of borrowed money as the assessee did not have his own money. Hence, this is actually not interest income but this goes to reduce interest expenditure. Such interest income could not be Income from other sources. This income was duly shown in P &L. Account. But while filing return of income this was shown as Other income in the computation of income; but missed to be shown as other income in the format of ITR.Thus, the assessee had not under reported any income because this income was duly shown in P&L A/c filed along with return of income.The genuineness is proved from facts that it escaped attention of ITR form filer because this was NIL in computation of income.It escaped attention only because it was taken out from business income and taken as income from other sources at zero figure. In the process, it was missed to be shown. It escaped attention of ITR form filer because this was NIL in computation of income. The AO has also committed mistake in taking it as income from other sources. It should have been assessed as business income only.

3 The ld.AR further submitted that the error has however not resulted in any tax liability. But in this case, tax component emanates due to addition of Rs.8,77,815/- under the head Income from other sources after set off depreciation loss.In the notice u/s 142(1), the AO had asked the assessee to file Computation of income. This was immediately filed showing income which was finally added. A look at the observation made by theAO in the penalty order, it would be found that he has not found the explanation offered by the assessee to be false.In such circumstances, penalty cannot be levied. The ld.CIT(A) has also did not find that the explanation offered by the assessee was false. He did not consider any of the decisions relied on by the assessee and submitted before him.

4 It is also pleaded that incomes voluntarily admitted or claims for deductions voluntarily conceded by the assessee do not constitute underreported income or misreported income. Reliance has been placed on the decision in the cases of Chambal Fertilizers and Chemicals Ltd. v. Office of the Pr.CIT [2024]158 Taxman.com184/297 Taxman 168/462 ITR 4 (Raj) andGreenwoods Govt. Officers Welfare Society. Dy. CIT (2024) 160 taxmann.com237 (DelhiTrib.), Jaypee Cement Corporation Ltd. v. ACIT [2023] 157 taxmann.com 757 (Delhi -Trib.),Prem Praksh Agarwal v. DCIT [IT Appeal No. 757 (Jaipur) of 2023. did. 9-2-2024] etc.Reliance was placed on the decisions of Hon'ble SC in the case of T. Page 7 Α.Υ. 2017-18 Asmeeta Infratech Limited Ashok Pai. Vs. Commissioner of Income-tax, Bangalore 2007 161 TAXMAN 340 (SC).

5 Per contra,the ld.DR relied on the orders of the lower authorities.

We have carefully considered all the relevant facts of the case.As it is manifest from the above stated facts that there was no case of under reporting. Rather, due to typographical mistake, the impugned income was wrongly classified in the return of income. Once the reason for not including this amount in the return of income has been explained as bonafide and inadvertent mistake, no penalty u/s 270A of the Act is justified. The Hon'ble Supreme Court in the case of Price Water para 17 to 20 as under:

Having heard learned counsel for the parties, we are of the view that the facts of the case are rather peculiar and somewhat unique. The assessee is undoubtedly a reputed firm and has great expertise available with it. Notwithstanding this, it is possible that even the assessee could make a "silly" mistake and, indeed this has been acknowledged both by the Tribunal as well as by the High Court

The fact that the Tax Audit Report was filed along with the return and that it unequivocally stated that the provision for payment was not allowable under section 40A(7) of the Act indicates that the assessee made a computation error in its return of income. Apart from the fact that the assessee did not notice the error, it was not even noticed even by the Assessing Officer who framed the assessment order. In that sense, even the Assessing Officer seems to have made a mistake in overlooking the contents of the Tax Audit Report.

The contents of the Tax Audit Report suggest that there is no question of the assessee concealing its income. There is also no question of the assessee furnishing any inaccurate particulars. It appears to us that all that has happened in the present case is that through a bona fide and inadvertent error, the assessee while submitting its return, failed to add the provision for gratuity to its total ITA No 987 of 2024 Baba Akhila Sai Jyothi Industries P Ltd income. This can only be described as a human error which we are all prone to make. The caliber and expertise of the assesseehas little or nothing to do with the inadvertent error. That the assessee should have been careful cannot be doubted, but the absence of due care, in a case such as the present does not mean that the assessed is guilty of either furnishing inaccurate particulars or attempting to conceal its income.

We are of the opinion, given the peculiar facts of this case, that the imposition of penalty on the assessee is not justified. We are satisfied that the assessee had committed an inadvertent and bona fide error and had not intended to or attempted to either conceal its income or furnish inaccurate particulars."

1 Thus, bonafide and inadvertent error in not offering the income in the return of income due clerical staff, the assessee cannot be held guilty of under reporting/misreporting of income, inviting the levy of penalty u/s 270A of the Act.A perusal of the record shows that all facts were already available before the AO during the course of assessment proceedings and nothing was hidden or concealed. Accordingly, in the facts and circumstances of the case, and following the judgment of the Hon'ble Supreme Court in the case of Price Water House Coopers levied u/s 270A of the Act, thus allowing the grounds of appeal. Page 9 Α.Υ. 2017-18 Asmeeta Infratech Limited

In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 19/01/2026. SANDEEP GOSAIN यायिक सदस्य / JUDICIAL MEMBER) Place: मुंबई/Mumbai दिनांक / Date 19.01.2026 Lubhna Shaikh / Steno PRABHASH SHANKAR (लेखाकार सदस्य/ACCOUNTANT MEMBER) आदेश की प्रतिलिपि अग्रेषित/Copy of the Order forwarded to : 1. 2. 3. 4. 5. अपीलार्थी / The Appellant प्रत्यर्थी / The Respondent. आयकर आयुक्त / CIT विभागीय प्रतिनिधि, आयकर अपीलीय अधिकरण DR, ITAT, Mumbai गार्ड फाईल / Guard file. सत्यापित प्रति //// आदेशानुसार / BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.