Ashok Kumar Gupta Vs DCIT (ITAT Delhi)
Summary: The Delhi Bench of the Income Tax Appellate Tribunal considered the assessee’s appeal against the order dated 30.05.2023 of the CIT(A)-24, New Delhi, concerning Assessment Year 2017-18. The only effective issue before the Tribunal was whether the CIT(A) was justified in confirming the levy of penalty under Section 270A of the Income Tax Act, 1961.
The assessee had furnished his return of income for AY 2017-18 on 16.03.2018 declaring total income of Rs. 4,93,460/-. The return was processed under Section 143(1) on 08.04.2018. The case was subsequently taken up for Compulsory Manual Scrutiny because a survey had been conducted on the assessee on 21.04.2016.
The assessee was an individual proprietor of M/s Ridhi Sidhi Impex and was involved in accommodation entry business, showing commission income during the relevant year. Assessment under Section 143(3) was completed on 27.12.2019 determining total income at Rs. 13,53,184/-. Penalty proceedings under Section 270A were initiated through a penalty notice dated 27.12.2019 for under-reporting of income. Subsequently, penalty at 200% was imposed under Section 270A(8) by order dated 26.03.2022. The CIT(A) affirmed the penalty.
Before the Tribunal, it was noted that Section 270A contemplates penalty in two circumstances, namely under-reporting and misreporting of income, with different penalty rates. The Tribunal observed that under Section 270A(7), penalty for under-reporting is prescribed at 50% of the tax payable on under-reported income, whereas under Section 270A(8), where under-reported income is in consequence of misreporting, the penalty is 200% of the tax payable on under-reported income.
