| Question And Answer | |
|---|---|
| Subject: | Whether decisions u/s 271(1)(c) will be applicable for penalty u/s 270A. |
| Category: | Income-Tax |
| Querist: | GOVIND AGRAWAL |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | misreporting, penalty, under reporting |
| Date: | July 27, 2021 |
As per Bombay H.C. (Goa Bench)(Full Bench) in Mr. Mohd. Farhan A. Shaikh in T.A. M 51 & 57 of 2012 and many other decisions of ITAT, No penalty u/s 271(1)(c) is leviable if – In Notice u/s 271(1)(c) – Irrelevant part not strike off.
In penalty notice u/s 270 A – under reporting of Income or misreporting of income not strike off.
But in the body of assessment order initiation of penalty is for under- reporting of income.
Query- Whether the aforesaid decision of Hon’able Bombay HC will be equally applicable in penalty u/s 270A ?
The principle enshrined by various judicial precedents pertaining to not striking off the irrelevant part is that the reasons for which a proceeding is initiated against an assessee should be rightfully communicated to them. (Mohd. Farhan A. Shaikh v. ACIT ( 2021 )434 ITR 1/ 125 Taxmann.com 253 ( FB ) Bom) (HC) www.itatonline.org )
In the case of section 270A, the section pertains to “under reporting of Income”, and section 270A(8) pertains to “under-reported income as a consequence of any misreporting”.
Both the provisions attract different rates of penalty.
The Ld. AO usually explains the nature of penalty proceedings in the quantum-assessment order.
In light of judicial precedents, it could be said that, a case of mis-reporting cannot be initiated if the Quantum Assessment Order only refers to under-reporting of Income
Does it mean that a notice issued u/s 270A for both “under reporting of Income”, and for “under-reported income as a consequence of any misreporting” is invalid for not striking one of the charges.
I there any judicial finding to that effect?