Umri Pooph Pratappur Tollway Private Limited Vs ACIT (ITAT Delhi)
Wrong Charge, Wrong Penalty: Delhi ITAT Quashes Section 270A Penalty for Mismatch Between Notice & Levy
Notice Says Under-Reporting, Order Says Misreporting- Penalty Can’t Change Colours Midway: 270A Levy Quashed for Wrong Charge- CIT(A) Can’t Rewrite Penalty Charge: Section 270A Order Set Aside – Aggravated Penalty Needs Clear Charge From Start—Mismatch Is Fatal
Delhi ITAT ‘C’ Bench in Umri Pooph Pratappur Tollway Pvt. Ltd. Vs. ACIT [ITA No. 4747/Del/2025, AY 2018-19, order dated 31.12.2025] allowed Assessee’s appeal and deleted penalty levied u/s 270A due to fatal inconsistency in the charge. Assessee, engaged in BOT road project, had claimed depreciation @25% on “right under service agreement” treating it as intangible asset. AO, while completing assessment, treated the claim as inadmissible and initiated penalty proceedings alleging under-reporting of income in consequence of misreporting.
However, penalty notice issued u/s 274 r.w.s. 270A accused Assessee only of under-reporting of income, whereas final penalty order invoked s.270A(8) and levied penalty for misreporting, an aggravated offence carrying higher consequences. CIT(A) accepted that there was no misreporting and reduced penalty to 50% by treating it as mere under-reporting. Tribunal held that such substitution of charge by CIT(A) was impermissible. Once penalty proceedings are initiated for a particular limb, penalty cannot be levied on a different and more severe limb. Initiation for a lesser default cannot culminate in levy for aggravated default. Holding that variance between assessment order, show-cause notice and penalty order vitiated proceedings, Tribunal deleted entire penalty. Appeal was allowed in full
FULL TEXT OF THE ORDER OF ITAT DELHI
