Jagmohan Motors Pvt. Ltd. Vs ACIT (ITAT Delhi)
Penalty under section 270A cannot be sustained where the penalty notice fails to specify the precise statutory charge under section 270A(9), and penalty is also not leviable on a bona fide claim involving a debatable issue of law: ITAT Delhi
The ITAT Delhi allowed the assessee’s appeal and deleted the penalty imposed under Section 270A of the Income Tax Act for AY 2017-18. The assessment had originally resulted in additions, most of which were deleted in appeal, leaving only an addition relating to a claim of revenue loss on account of riot-related damages. The Tribunal noted that the penalty notices issued from 27.12.2019 to 06.06.2025 did not specify which clause of Section 270A(9)(a) to (f) had allegedly been violated. It held that these provisions constitute specific charges and, in the absence of such specification in the notices, the Revenue lacked authority to impose the penalty. The Tribunal also observed that the issue of whether the claimed riot-related damages constituted capital or revenue expenditure was a debatable issue. Relying on the Delhi High Court decision in Schneider Electric South East Asia (HQ) Pte Ltd. and its earlier decision in B.R. Agrotech Ltd., the Tribunal deleted the penalty under Section 270A and allowed the appeal.
