Alrameez Construction Pvt. Ltd. Vs CIT/NFAC (ITAT Mumbai)
Section 270A Penalty Deleted as Deeming Addition Under Section 43CA Not Treated as Under-Reporting or Misreporting: ITAT Mumbai
The Income Tax Appellate Tribunal (ITAT), Mumbai, considered the assessee’s appeal against the order dated 23.12.2022 passed by the National Faceless Appeal Centre (NFAC) under Section 250 of the Income-tax Act, 1961 for Assessment Year (AY) 2018-19. The assessee challenged the penalty imposed under Section 270A, alleging that the penalty order was without jurisdiction, violated principles of natural justice, and was wrongly sustained by the NFAC.
Material Facts and Procedural Background
The assessee filed its return of income on 28.09.2018 declaring total income of ₹42,540. The case was selected for scrutiny, and the assessment was completed determining total income at ₹1,76,640 after making an addition of ₹1,34,100. The addition was made under Section 43CA read with Section 56(2)(x), following which the Assessing Officer initiated penalty proceedings under Section 270A by issuing notice under Section 274 read with Section 270A.
The Tribunal noted that the assessee’s quantum appeal had already been decided by the CIT(A). It also observed that the penalty order under Section 270A was passed on 01.02.2022 without awaiting the outcome of the pending quantum appeal, despite sufficient time being available under Section 275.
