Unique Insurance Company Vs ITO (ITAT Chandigarh)
The assessee filed appeals for Assessment Years 2018–19 to 2020–21 challenging the confirmation of penalties levied under Section 270A of the Income Tax Act. As the facts and issues were identical across all years, the Tribunal examined the appeal for AY 2018–19 as the lead case. The penalty of ₹5,46,590 was imposed by the Assessing Officer and confirmed by the Commissioner of Income Tax (Appeals), NFAC, for alleged underreporting of income.
The assessee had not filed a regular return of income under Section 139(1). However, it had received insurance commission amounting to ₹65.38 lakhs, on which tax was deducted at source. Following reopening of the assessment, the assessee filed a return declaring income of ₹35.37 lakhs, which was accepted in assessment. Thereafter, penalty proceedings were initiated for underreporting of income.
Before the Tribunal, the assessee argued that penalty under Section 270A was not automatic. It contended that the managing partner was undergoing medical treatment in Canada during the relevant period, resulting in non-filing of the return. It was also argued that the show-cause notice was vague and did not specify the applicable limb of Section 270A. Reference was additionally made to provisions granting immunity from penalty.
