Case Law Details
Pallava Textiles Private Limited Vs ITO (ITAT Chennai)
In this case, the Assessing Officer has initiated penalty proceedings under section 270A of the Act for under-reported income. The Assessing Officer issued show-cause notice under section 274 r.w.s. 270A of the Act calling explanations from the assessee as to why penalty cannot be levied for under-reporting the income. The assessee has submitted that all the details before the Assessing Officer and also expenditure incurred by the assessee. Therefore, the Assessing Officer, on estimated basis, disallowed an amount of ₹.20,32,748/- and no penalty can be levied under section 270A of the Act. We find that the Assessing Officer has disallowed 20% of the expenditure claimed by the assessee. Disallowing the expenditure cannot be said that it is an under-reporting of the income. The assessee has filed all the details and not only that the Assessing Officer, on estimated basis disallowed the expenditure. Once, the disallowance made on estimated basis, no penalty can be levied. Therefore, the penalty levied by the Assessing Officer and confirmed by the ld. CIT(A) is unsustainable and thus, the penalty levied under section 270A of the Act is deleted.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi, dated 05.07.2022 relevant to the assessment year 2017-2018 in confirming levy of penalty under section 270A of the Income Tax Act, 1961 [“Act” in short].
2. The appeal filed by the assessee is delayed by 52 days in filing the appeal before the Tribunal. The assessee has filed a petition for condonation of delay in the form of an affidavit and the submissions are reproduced as under:
Please become a Premium member. If you are already a Premium member, login here to access the full content.
