Penalty u/s 270A(9) cannot be levied if income is offered under the wrong head of ‘Capital Gains’ instead of ‘Other sources’

(i) For levy of penalty under section 270A(9) of the Act, the case of the assessee must fall under one of the clauses (a) to (f) of the said sub-section. In the present case, the assessee has duly offered the income arising on transfer of Bajaj Equity Plus Fund in the return of income. The only issue involved is that the assessee has offered the said income under an incorrect head, i.e., under the head “Capital Gains” instead of under the head “Income from Other Sources.” In our considered view, as the assessee has disclosed the income in the return of income, there is no misrepresentation or suppression of facts on the part of the assessee. Consequently, the assessee’s case does not fall under any of the clauses (a) to (f) of section 270A(9) of the Act. The situation is merely one of wrong reporting of the income under an incorrect head, and nothing more.

CIT v. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 (SC) – Mere making of an incorrect claim does not amount to furnishing inaccurate particulars of income.

D.C. Polyester Ltd. v. DCIT (ITA No. 188/Mum/2023, ITAT Mumbai, order dated 17.10.2023) – Penalty under section 270A not leviable where addition arises due to change in head of income.

S. Saroja v. DCIT (ITA No. 418/Chny/2023, ITAT Chennai, order dated 31.05.2023) – Bona fide mistakes in computation or classification of income do not attract penalty under section 270A.