Question And Answer
Subject: Whether penalty u/s 270A be levied for misreporting of income in respect of 5% conveyance expenses and addition as cash credits? Whether penalty u/s 270A be levied for misreporting of income in respect of 5% conveyance expenses and addition as cash credits?
Querist: S k Goyal
Answered by:
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Date: May 16, 2021
Query asked by S k Goyal

Penalty u/s 270A was initiated on addition of conveyeyance expense Say 5% for want of vouchers etc but mentioned in Assessment order as Mis reporting of income.

Assessee filed form 68 u/s 270AA claim ing immunity from Penalty within a month of the order but as per section 270AA immunity is not available in Misreporting of Income.How to proceed . Pl Guide and refer some judgements.

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Section 270AA of the Income-tax Act, 1961 provides taxpayers with immunity from imposition of penalty under section 270A of the Act.

However, Section 270AA (3) of the Act takes into its account penalty on account of `Under-reported Income and not mis-reporting of income.

The cases of misreporting of income referred to in sub-section (8) shall be the following, namely:
(a) misrepresentation or suppression of facts;
(b) failure to record investments in the books of account;
(c) claim of expenditure not substantiated by any evidence;
(d) recording of any false entry in the books of account;
(e) failure to record any receipt in books of account having a bearing on total income; and
(f) failure to report any international transaction or any transaction deemed to be an international transaction or any specified domestic transaction, to which the provisions of Chapter X apply.

Therefore, if the nature of addition is on account of any of the above, immunity cannot be granted under section 270AA of the Act.

Note: No case laws are available , there are good articles which are published in the www.itatonline .org , one may read for more clarity on the subject .

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