Jaibalaji Business Corporation Private Limited Vs ACIT (ITAT Pune)
The ITAT Pune allowed the assessee’s appeal against the order of the National Faceless Appeal Centre (NFAC) dated 15.10.2022, which had confirmed a penalty of Rs. 6,99,669 under Section 270A of the Income-tax Act for AY 2017-18. The assessee, engaged in the business of solar power generation, had filed a return declaring Nil income. During assessment under Section 143(3), the Assessing Officer made an addition of Rs. 2,80,07,310 under Section 43CA on the basis that certain land had been sold below the stamp value. At the assessee’s request, the matter was referred to the Departmental Valuation Officer (DVO). After receipt of the DVO’s report, the Assessing Officer passed a rectification order under Section 154, reducing the addition to Rs. 7,05,000 by adopting the DVO’s valuation of Rs. 78,88,800 as against the declared value of Rs. 71,83,800. Penalty under Section 270A was thereafter imposed and upheld by the CIT(A).
The Tribunal observed that the sole basis for the penalty was the addition made under Section 43CA on the strength of the DVO’s report. It noted that the DVO had determined the property’s value by considering comparable nearby properties at different rates and averaging those rates, making the valuation an estimate. The Tribunal also observed that the difference between the value declared by the assessee and the DVO’s valuation was minimal.
