Dowson Technology Pvt. Ltd. Vs DCIT/ ACIT (ITAT Dehradun)
The assessee appealed against the order of the Commissioner of Income Tax (Appeals), NFAC, confirming levy of penalty under Section 270A of the Income-tax Act for Assessment Year 2023-24. The Assessing Officer (AO) had originally imposed penalty under Section 270A on the ground of under-reporting of income in consequence of misreporting. The CIT(A) upheld the levy of penalty but changed the charge from “under-reporting in consequence of misreporting” under Section 270A(9) to “under-reporting of income” under Section 270A(3), thereby reducing the penalty from 200% to 50% of the tax on under-reported income.
The assessee had filed its return declaring a business loss of ₹1,52,97,649. During scrutiny, the AO observed that although the return reflected business loss after accounting for various disallowances and depreciation, the schedules for carry forward of losses showed that the assessee had carried forward the entire loss instead of restricting the business loss after separating unabsorbed depreciation. The AO also disallowed ₹5,01,734 under Section 36(1)(va) relating to delayed payment of employees’ contribution to PF/ESI, as reported by the tax auditor but not disallowed in the return. Penalty proceedings under Section 270A were initiated, and penalty of ₹10,63,566 was imposed at 200% of the tax sought to be evaded on under-reported income of ₹15,21,817.
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