Sree Tharakarama Constructions Vs ACIT (ITAT Hyderabad)
The Hyderabad ITAT deleted penalty of ₹11.03 lakh levied u/s 270A(9), holding that the case involved under-reporting and not misreporting of income. The Tribunal first condoned a 10-day delay considering the assessee’s serious health condition as a sufficient cause.
On merits, the assessee had not filed a return originally, but filed it later in response to notice u/s 148, declaring income which was accepted in toto by the AO without any additions. Despite this, the AO levied penalty treating the case as misreporting of income.
The ITAT held that mere non-filing of return followed by filing in response to reopening does not amount to misrepresentation or suppression of facts. Since the AO had not recorded any specific finding of misreporting, the case squarely falls under section 270A(2) (under-reporting) and not section 270A(9) (misreporting).
Accordingly, the Tribunal ruled that penalty for misreporting is unsustainable when returned income is accepted without variation, and directed deletion of the entire penalty
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
This appeal is filed by Sree Tharakarama Constructions (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals)-12, Hyderabad (“Ld. CIT(A)”) dated 27.06.2025 for the A.Y.2017-18.
