SAS Fashions Pvt. Ltd. Vs DCIT (ITAT Delhi)
Penalty under Section 270A Deleted for Mere Wrong Claim – ITAT Delhi
The Delhi ITAT deleted penalty levied under Section 270A on disallowance of depreciation claimed against rental income. The Tribunal held that the taxpayer had furnished all particulars of income and made full disclosure of facts, and the dispute involved only a legal issue regarding allowability of depreciation. It was observed that the Assessing Officer loosely applied the concepts of “under-reporting” and “misreporting”, without specifying the applicable limb of Section 270A or demonstrating satisfaction of Section 270A(9). Mere disallowance of a claim, in the absence of any misrepresentation or suppression of facts, does not constitute misreporting. Following the Delhi High Court ruling in Prem Brothers Infrastructure LLP, the penalty order was held to be manifestly arbitrary. Accordingly, penalty under Section 270A was deleted in full.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is directed against the order of the NFAC, Delhi dated 20.08.2024 pertaining to A.Y 2018-19.
2. The ld. counsel for the assessee has filed an application for condonation of delay.
3. Having perused the condonation petition, we find that there is a delay of nine months in filing the appeal. We find that the reason for delay in filing the appeal is that the Director of the assessee company expired and the CA entrusted with the affairs of the assessee got afflicted with cancer. Hence the assessee has sufficient cause for not filing the appeal in time. Accordingly, we condone the delay and admit the appeal.
