Arjun Green Power Private Limited Vs ACIT (ITAT Ahmedabad)
Summary: The ITAT Ahmedabad partly allowed the assessee’s appeal concerning penalty imposed under Section 270A of the Income Tax Act for A.Y. 2020-21. The assessee had claimed deduction under Section 80IA for a 5MW solar power plant, which was disallowed during processing of return under Section 143(1)(a) and later confirmed in assessment under Sections 144/144B. The Assessing Officer imposed a penalty of Rs.79.64 lakh at 200% of tax payable on alleged misreported income. Before the Tribunal, the assessee did not dispute the penalty on merits but challenged the computation of under-reported income. The Tribunal noted that under Sections 270A(2) and 270A(3), under-reported income must be computed as the difference between assessed income and income determined under Section 143(1)(a). Since the income determined under Section 143(1)(a) was already Rs.1.02 crore, the AO was incorrect in treating it as nil while computing penalty. The Tribunal directed the AO to recompute the under-reported income and penalty after allowing set-off of income already determined under Section 143(1)(a).
Issue: Whether penalty under section 270A for under-reporting/misreporting of income could be computed without giving credit for the income already determined under section 143(1)(a), and whether the assessed income alone could be treated as under-reported income.
