| Question And Answer | |
|---|---|
| Subject: | Penalty proceedings – 270A |
| Category: | Income-Tax |
| Querist: | Sree Lekha |
| Answered by: | Research Team |
| Tags: | mandatory, penalty, penalty under-reporting and misreporting |
| Date: | October 3, 2021 |
Sir,
Are the penalty proceedings u/s 270A mandatory in nature? In every case where there is an addition made during assessment proceedings, will it result in initiation of penalty either by way of under reporting or mis reporting?
Is the legal precedence established by the Hon’ble SC in various cases like that of Reliance Petro Products, Ashok Pai etc., no longer applicable?
Section 274 provides that , no order of penalty under this Chapter shall be made unless the assessee has been heard or has been given a reasonable opportunity of being heard . Section 270A is also part of Chapter XXI. Where as while levying interests u/ s 234A, 234B, 234C no discretion is given to the Assessing Officer . Section 246A (1) (q) , provides an appeal before the CIT ( A) against an order imposing a penalty under chapter XXI . According to us the penalty is not automatic . Ratio laid down by Supreme Court in CIT . Reliance Petro Products (Pvt ) Ltd ( 2010) 322 ITR 158 ( SC) is good law. However each case has to be decided on facts and not on law . In CIT v. Khody Eswara & Sons ( 1972 ) 83 ITR 369 ( SC) held that the finding given in assessment proceedings would be relevant and admissible material in penalty proceedings , but those findings cannot operate as res judicata because the two are independent proceedings and considerations arising two proceedings are different.