Urmila Rajendra Mundra Vs ITO (ITAT Jaipur)
ITAT Jaipur held that merely the claim of the assessee was not entertained it cannot be a reason automatically to levy the penalty for misreporting or under reporting of the income. Accordingly, levy of penalty under section 270A of the Income Tax Act set aside.
Facts- Assessee has preferred the present appeal mainly contesting that CIT(A), NFAC, Delhi has wrongly confirmed the levy of penalty u/s 270A of Rs. 2,03,488/- considering disallowances of interest capitalized of Rs. 4,89,159/- for calculation of capital gain (index value of Rs. 4,19,720/-).
Conclusion- Held that merely the claim of the assessee was not entertained it cannot be a reason automatically to levy the penalty for misreporting or under reporting of the income.
In the case of Schneider Electric South East Asia (HQ) Pte Ltd. (supra), Delhi High Court has held that the Respondents’ action of denying the benefit of immunity on the ground that the penalty was initiated under section 270A of the Act for misreporting of income is not only erroneous but also arbitrary and bereft of any reason as in the penalty notice the Respondents have failed to specify the limb – “under reporting” or “misreporting” of income, under which the penalty proceedings had been initiated.
