S S R S MEM EDU Society Vs ACIT (ITAT Delhi)
ITAT Delhi Quashes Sec 270A Penalty – Failure to Specify Misreporting Limb Makes 200% Penalty Invalid
In SSRS MEM EDU Society vs ACIT (AY 2018-19), the ITAT Delhi allowed the assessee’s appeal and deleted penalty levied u/s 270A. The AO had imposed penalty @200% of tax payable alleging misreporting of income; however, the Tribunal noted that neither the assessment order nor the penalty order specified the exact limb of “misreporting” under section 270A(9), which is mandatory for sustaining penalty.
The ITAT held that penalty proceedings are independent and must be free from ambiguity. Since the AO failed to clearly establish whether the penalty was for under-reporting (50%) or misreporting (200%), and did not identify the specific clause of section 270A(9), the penalty order was held arbitrary and unsustainable. Relying on Delhi High Court ruling in Prem Brothers Infrastructure LLP, the Tribunal quashed the penalty and allowed the appeal.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] dated 17.03.2025, for AY 2018-19, confirming levy of penalty u/s.270A of the Income Tax Act, 1961(hereinafter referred to as ‘the Act’).
