BHEL LCC Society Ltd Vs DCIT (ITAT Hyderabad)
CPC’s Disallowance Blocks 270A Penalty; No Fresh Addition, No Penalty: ITAT Hyderabad Deletes 270A Levy- Penalty u/s 270A Deleted: ITAT Hyderabad Holds No Under-Reporting Where CPC & AO Made Identical Additions
Assessee filed its return of income on 31.10.2017 declaring a loss of ₹22,68,825/-. CPC, while processing u/s 143(1) on 27.03.2019, disallowed ₹27,72,271/- towards delayed payment of employees’ PF contribution u/s 36(1)(va). On scrutiny, AO passed order u/s 143(3) on 26.12.2019 repeating the very same addition made by CPC without making any fresh adjustment.
Dept proceeded to levy penalty u/s 270A alleging under-reporting of income. Revenue argued that since Assessee’s loss was reduced & converted into positive income by the addition of ₹27.72 lakh, it amounted to under-reporting falling within clause (g) of section 270A(2).
Tribunal observed that section 270A(2)(a) contemplates under-reporting only where income assessed is greater than income determined in processing u/s 143(1)(a). In this case, CPC had already made the disallowance while processing the return. AO merely reiterated the same addition, hence assessed income was identical to CPC’s determination. Consequently, there was no difference between income assessed & income determined u/s 143(1)(a). Therefore, the basic condition for levy of penalty u/s 270A was not satisfied.
