Capgemini Technology Services India Limited Vs Assessment Unit (ITAT Pune)
Penalty u/s 270A Deleted for Suo-Motu Withdrawal of Education Cess Claim Based on Retrospective Amendment
The Pune ITAT (SMC Bench) allowed the assessee’s appeal and deleted the penalty levied under section 270A for AY 2020-21 in respect of disallowance of Health and Education Cess. The assessee had originally claimed deduction of cess based on prevailing favourable judicial precedents and subsequently suo-motu withdrew the claim after the retrospective amendment introduced by Finance Act, 2022 (Explanation 3 to section 40(a)(ii)). The Tribunal held that adopting one of the possible views prevailing at the time of filing the return does not amount to misreporting or under-reporting of income. It further noted that the tax impact was effectively discharged through adjustment of MAT credit, and reliance was placed on coordinate bench decisions, including the assessee’s own case, holding that penalty u/s 270A is not leviable where the claim is withdrawn in good faith following a retrospective amendment. Additionally, the Tribunal observed that the penalty order was passed in the name of a non-existent entity post-merger, rendering it unsustainable. Accordingly, the penalty was directed to be deleted and the appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT PUNE
