The assessee filed return of income for AY 2019–20. The CPC while processing return u/s 143(1) made disallowance of employees’ contribution to PF/ESI. The same disallowance was reiterated in assessment u/s 143(3) r.w.s. 153A. The ITAT confirmed the disallowance following the decision of the Supreme Court in Checkmate Services Pvt. Ltd. The Assessing Officer levied penalty u/s 270A for under-reporting of income. The assessee filed revision u/s 264, which was rejected by the PCIT without assigning reasons. On writ, the High Court held that the powers under section 264 are very wide and the assessee has a choice to either file an appeal or seek revision. The Commissioner cannot refuse to exercise jurisdiction merely because an appeal lies. The summary rejection of the revision application without considering merits was unsustainable.On merits, the Court held that no penalty u/s 270A could be levied. The disallowance was already made in intimation u/s 143(1), and therefore the assessed income did not exceed the processed income, hence there was no “under-reported income” within the meaning of section 270A(2) and (3). Further, the claim of the assessee was based on a binding jurisdictional High Court judgment prevailing at the time of filing the return, and the issue was debatable in view of divergent judicial views. A bona fide claim with full disclosure falls within the exception provided u/s 270A(6)(a). Penalty is not automatic and cannot be levied merely because the claim is disallowed. Accordingly, the High Court quashed both the order passed u/s 264 and the penalty order u/s 270A. (AY. 2019–20) (WP No. 378 of 2026, dt. 30-03-2026)