Hi-Tech Engineers Vs ACIT (ITAT Mumbai)
ITAT Mumbai held that levy of penalty under section 270A of the Income Tax Act cannot be sustained since specific limb of Section 270A(9) leading to under-reporting of income or mis-reporting of income is not specified. Accordingly, appeal of assessee is allowed.
Facts- The Assessee, a partnership firm, under Section 153A of the Act vide Assessment Order, dated 30/09/2021, whereby addition of INR.70,93,473/- was made in the hands of the Assessee under Section 69C of the Income Tax Act. CIT(A) restricted the addition on account of the alleged bogus purchases to INR.1,99,328/- being 5% of alleged bogus purchases.
Thereafter, AO concluded that the Assessee had under-reported income in consequence of misreporting income since the claim of expenditure was not substantiated by any evidence. Therefore, as per provision of Section 270A(9) of the Act, penalty equal to 200% of the amount of tax payable on misreported income as leviable on the Assessee. Accordingly, AO levied a penalty of INR.1,39,306/- on the Assessee vide Penalty Order, dated 29/11/2023 passed u/s. 270A of the Act.
Conclusion- Held that while passing the penalty order under Section 270A(1) read with Section 270A(8) of the Act the Assessing Officer is required to specify the specific limb of Section 270A(9) of the Act under which the Appellant was held to have misreported its income leading to under-reporting of income. The invocation of specific limb of Section 270A(9)(a) to 270A(9)(g) of the Act should either be apparent from the express provisions stated in the penalty order or should be unambiguously discernable from the reading of the penalty order as a whole; and in absence of the same penalty levied under Section 270A of the Act cannot be sustained. In the case before us, on perusal of Penalty Order, dated 29/11/2023, we find that the Assessing Officer has not specified the specific limb of Section 270A(9) of the Act which has been invoked.
