During the assessment proceedings, the assessee relied on the fact that the “provision for doubtful GST input tax credit” was claimed in the expense account, and the deduction was claimed in the return of income. The assessee, suo moto, surrendered the amount by revising its return of income and adding it back to the total income. The Assessing Officer passed an assessment order and imposed a penalty under Section 270A for misreporting of income. The assessee filed an application under Section 270AA against the penalty order. The Assessing Officer rejected the application. The assessee challenged the order on the grounds that no opportunity for a hearing was provided.

The court noted that the authorities had not detected the said aspect and that the assessee had voluntarily offered the amount. Regarding the application under Section 270AA, the assessee was not granted an opportunity for a personal hearing. The rejection of the application was a non-speaking order. From the order, it was evident that the authorities were uncertain whether it was a case of misrepresentation of income, suppression of facts, or an erroneous claim of expenses. Considering the voluntary disclosure by the assessee and the failure of the authorities to properly apply the provisions, the court quashed the impugned order. (AY. 2018-19)