Home Income tax Corporate Income tax Mumbai ITAT Rejects 200% Penalty Except Misreporting Specified

Mumbai ITAT Rejects 200% Penalty Except Misreporting Specified

Mumbai ITAT Rejects 200% Penalty Except Misreporting Specified
Mumbai ITAT's Order for Saltwater Studio LLP

A 200% penalty couldn’t get imposed till the division establishes misreporting, the Mumbai Bench of the Earnings Tax Appellate Tribunal (ITAT) said.

AO would lose to attract the addition or disallowance he made in quantum evaluation below the ken of (a) to (f) of Part 270A (9) of the Act, and the penalty levied for misreporting on the fee of 200% couldn’t be sustained as the identical is trite legislation that penalty provisions can be required to be analyzed the bench of Aby T. Varkey (Judicial Member) and Om Prakash Kant (Accountant Member) witnessed.

For the aim of scrutiny below CASS the taxpayer’s case was chosen. The AO framed scrutiny evaluation u/s 143(3) via the order by way of making the inter-alia quantum addition, which motion was assailed by the taxpayer to the CIT (A). The petition of the taxpayer was dismissed by the CIT (A).

Because of the taxpayer’s failure to pursue the provides of curiosity on revenue tax refunds, curiosity on late funds of TDS, and disallowance of prices, the Tribunal granted partial aid to the taxpayer and affirmed some additions in a judgment dated March 31, 2023.

The AO assessed a high quality in accordance with Part 270A, 200% of the tax that he believed was incorrectly declared.

The taxpayer has put forth the argument that Part 270A(9) delineates six totally different eventualities that may qualify as underreporting on account of misreporting. You will need to be aware that the provisions of Part 270A(9) are relevant solely in instances the place there may be intent or data, as evident from the situations of revenue misreporting. Nowhere within the evaluation order has the Assessing Officer specified the precise case below the aforementioned six eventualities the appellant’s case falls below, which might warrant the imposition of a better penalty of 200%.

Essential: All Particulars About Beneath-reporting & Misreporting Earnings

The Earnings Tax Appellate Tribunal (ITAT) has dominated that the Assessing Officer should set up that the taxpayer’s actions or omissions fall inside the purview of sub-section (9) of Part 270A. Nonetheless, upon reviewing the explanations supplied by the Assessing Officer for imposing a penalty for misreporting, it’s evident that he has didn’t articulate how the taxpayer’s case or the additions made align with the circumstances outlined in clauses (a) to (f) of sub-section (9) of Part 270A of the Earnings Tax Act.


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