SURESH CHEMBAKARA APPUNNI,PALAKKAD vs. THE ITO WARD 2, PALAKKAD

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ITA 414/COCH/2023Status: DisposedITAT Cochin23 October 2024AY 2017-18Bench: Shri Satbeer Singh Godara (Judicial Member), Shri Amarjit Singh (Judicial Member)2 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the quantum addition, which formed the basis for the penalty, was based solely on estimation. Therefore, it should be treated as a bonafide mistake of the assessee, excluded from 'under-reporting of income' under Section 270A(6)(a).

What were the facts?

The assessee's appeal for AY 2017-18 was against an ex-parte order by the CIT(A)/NFAC. This order confirmed the Assessing Officer's action of levying a penalty under Section 270A.

What were the issues?

The primary issue was whether a penalty under Section 270A was leviable when the underlying addition was based on estimation and could be considered a bonafide mistake.

Which sections of the Income-tax Act were involved?

Section 270A,Section 270A(6)(a),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN

Before: Shri Satbeer Singh Godara & Shri Amarjit Singh

For Respondent: Smt. V. Swarnalatha, Sr. D.R
Hearing: 22.08.2024Pronounced: 23.10.2024

O R D E R Per Bench This assessee’s appeal for A.Y. 2017-18 arises against the National Faceless Appeal Centre, Delhi [CIT(A)]’s DIN & Order No. ITBA/ NFAC/S/250/2022- 23/1051690790(1) dated 30.013.2023 in proceedings u/s. 250 of the Income Tax Act, 1961 (the Act).

Case called twice. None appears at assessee’s behest. We accordingly proceed exparte against the assessee.

2.

It emerges at the outset with the able assistance coming from both the parties that the CIT(A)/NFAC has passed exparte order confirming the Assessing Officer’s action levying sec.270A penalty of Rs.4,64,494/- pertaining to the quantum addition of Rs.9,02,050/- [comprising of specified bank notes and estimated turnover @ 12%]

3.

Smt. Swarnalatha could hardly dispute the clinching fact that the impugned quantum addition is itself based on estimation only and therefore, it deserves to be treated as the assessee’s bonafide mistake only u/s.270A(6)(a) of the Act which has itself excluded from the purview of “under-reporting of income” by the legislature. We accordingly delete the impugned penalty in very terms.

4.

This assessee’s appeal is allowed in above terms.

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