ACIT Vs Nawazuddin Nawabuddin Siddiqui (ITAT Mumbai)
The Revenue appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, which had deleted the penalty imposed under Section 270A of the Income-tax Act for the assessment year 2019-20. The Revenue contended that the assessee had failed to file a return of income under Section 139(1), filed the return only after issuance of a notice under Section 148, and was therefore liable for penalty on account of under-reporting of income under Section 270A.
The assessee had not filed a return of income for the relevant assessment year. Based on information available on the Insight Portal under the Risk Management Strategy for non-filers, the Assessing Officer (AO) reopened the assessment after noting that the assessee had purchased an immovable property valued at ₹11.50 crore and had undertaken large financial transactions amounting to ₹26.73 crore. Pursuant to a notice under Section 148, the assessee filed a return declaring total income of ₹12.91 crore. During the reassessment proceedings, the AO accepted the returned income in full without making any addition, disallowance or variation. Despite accepting the returned income, the AO initiated penalty proceedings under Section 270A for under-reporting in consequence of misreporting of income and ultimately levied a penalty of ₹9.22 crore, being 200% of the tax sought to be evaded.
