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Judgment
PER AMITABH SHUKLA, AM
This appeal by the assessee is directed against the order of learned CIT(A), National Faceless Appeal Centre, Delhi dated 4th July, 2025.
The only issue raised in this appeal by the assessee is against the action of the authorities below in imposition of penalty under Section 270A of the Income-tax Act, 1961 (in short 'the Act').
The learned Counsel for the assessee submitted that the penalty has been imposed under Section 270A despite the fact that the assessee has filed by the return of income for the relevant assessment year in response to notice under Section 148 of the Act, which has been accepted in full without any addition, disallowance or modification. He submitted that there was no under-reported income within the meaning of Section 270A(2) of the Act warranting any levy of penalty. As there was no difference between the income assessed and income declared in the return filed under Section 148, the invocation of penalty proceedings under Section 270A(2)(b) is bad in law.
Learned Senior DR supported the orders of authorities below.
After considering the submissions of both the sides, in our opinion, when there was no difference between the income assessed and income declared in the return of income filed by the assessee under Section 148 for the relevant assessment year, the penalty under Section 270A of the Act cannot be imposed.
We have also noted from Paragraph 12 of order of the learned CIT(A) as under:-
'12. Conclusion and Decision on the Grounds of Appeal
(i)in light of the foregoing, I am of the considered opinion that penalty under section 270A is not exigible in the present case to the extent of 200% and is accordingly restricted to 50% as per section 270A(7). The conditions for under-reported income in consequence of misreporting thereof are not satisfied; there is no concealment or misreporting; and the conduct of the Appellant post-notice under section 148 reflects voluntary and complete compliance. Accordingly, the appeal is partly allowed, and the penalty levied under section 270A is hereby restricted as above."
In our view, the conditions prescribed under Section 270A for levy of penalty have not been properly addressed by the learned CIT(A). In paragraph 12 of his order, he has himself accepted non-invocation of penalty proceedings under Section 270A of the Act in this case. The assessee has made a voluntary disclosure of his income and when no adverse finding has been recorded during reassessment, the penalty cannot be sustained merely on procedural lapses. In that view of the matter, we reverse the orders of authorities below on this count and delete the penalty imposed under Section 270A of the Act.
In the result, the appeal of the assessee is allowed. Decision pronounced in the open Court on 27th February, 2026.