NIRJEET SINGH,DELHI V. ITO WARD 52(1), NEW DELHI

ITA 5151/DEL/2025

AI Insights

The case involves an appeal by Shri Nirjeet Singh against the penalty imposed by the Income Tax Officer (ITO) under section 270A of the Income Tax Act, 1961, for alleged under-reporting of income due to misreporting. The penalty was initially confirmed by the CIT(A) but was later contested at the Tribunal. The primary contention was whether the assessee was entitled to immunity from the penalty under section 270AA, despite the penalty being categorized under section 270A(9) which does not allow for such immunity. The Tribunal's decision hinged on the interpretation of the facts presented during the assessment and the applicability of section 270A(9)(a) concerning misreporting of income.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 823132 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2022-2023
• Appeal Filed On: 25-08-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANKUSH KALRA
• Assessee Lawyers: K. SAMPATH
• Keywords: Transfer pricing; International transaction; Bonafide belief
• Section: 270AA

Judgement Text

"ITA No. 5151/DEL/2025 Nirjeet Singh VS. ITO WARD 52(1), DELHI 1 | P a g e IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’, NEW DELHI BEFORE SHRI VIMAL KUMAR, JUDICIAL MEMBER & SMT. RENU JAUHRI, ACCOUNTANT MEMBER ITA No. 5151/DEL/2025 Assessment Year: 2022-23 Shri Nirjeet Singh 117, Palika Bazar Connaught Place New Delhi- 110001 Vs ITO Ward 52(1) New Delhi (APPELLANT) (RESPONDENT) PAN No. ABLPS0458C Assessee by : Shri K. Sampath, Adv. Shri Raj Kumar, Adv. Department/Revenue by : Ms. Ankush Kalra, SR. DR Date of Hearing: 16.12.2025 Date of Pronouncement: 23.12.2025 ORDER PER RENU JAUHRI, AM: 1. This appeal is filed by the assessee is preferred against the order of the Ld. CIT(A), National Faceless Appeal Centre (for short, NFAC), passed in DIN & Order No. ITBA/NFAC/S/250/2025-26/1078380742(1), for A.Y. 2022-23, u/s 250 of the Income Tax Act, 1961(hereinafter referred to as, “Act”), order dated 11.07.2025, affirming the penalty order passed u/s 270A of the Act. Printed from counselvise.com ITA No. 5151/DEL/2025 Nirjeet Singh VS. ITO WARD 52(1), DELHI 2 | P a g e 2. The grounds of appeal are reproduced as under: “(a) On the facts and circumstances of the case and in law the Ld. CIT(A) at NFAC, Delhi erred in confirming the penalty u/s 270A of the Act imposed by the Assessment Unit of the National Faceless Assessment Centre. (b) The order being arbitrary, fallacious, and unwarranted must be quashed with directions for appropriate relief. ” 3. Brief facts of the case are that the assessee had filed return for A.Y. 2022-23 on 07.10.2022, declaring income of Rs. 77,09,300/-. The case was selected for scrutiny during the course of which the Ld. AO noted some discrepancies in the purchase transactions made with M/s. Manish Overseas Private Limited, appearing in the list of Sundry Creditors. It was the case of the Ld. AO that the assessee had not properly accounted the purchase return of Rs. 17,13,600/- which was included in purchases to reduce the profit. The excess purchases of Rs. 17,13,600/- was disallowed and added to the income of the assessee and penalty proceedings u/s 270A were initiated for under-reporting in consequence of misreporting of income to the extent of Rs. 17,13,600/-. 3.1 During the course of the penalty proceedings, the assessee explained that the purchase return was duly recorded in the books of account and copy of the ledger account as well as confirmation from the supplier was also filed before the Ld. AO. The assessee claimed immunity from penalty u/s 270A by filing requisite form u/s 270AA of the Act in respect of the impugned addition. However, the Ld. AO held that the immunity u/s 270AA cannot be granted to the assessee as the penalty proceedings had been initiated for “under-reported income which is in consequence of misreporting thereof” u/s 270A(9) of the Act. As the immunity is not available in respect of cases covered u/s 270A(9), the application of immunity was rejected being not maintainable. Printed from counselvise.com ITA No. 5151/DEL/2025 Nirjeet Singh VS. ITO WARD 52(1), DELHI 3 | P a g e Thereafter, the Ld. AO proceeded to impose penalty of Rs. 10,69,286/- u/s 270A(9) of the Act vide order dated 27.09.2024. 3.2 Aggrieved, the assessee preferred an appeal before the Ld. CIT(A). However, Ld. CIT(A) dismissed the assessee’s appeal with the following observations: “ 3.2.4 On considering the facts of the case and submission of appellant, it is observed that during the assessment proceedings, an addition of Rs. 17,13,600/- was made by the AO vide order dated 18.03 2024 and further, penalty u/s 270A was initiated for furnishing under reported of income in consequence of misreporting of Income, In compliance to the same, the appellant paid due tax with interest as per section 270AA along with Form-68 as prescribed on 20.042024. Further, on Scrutinizing the penalty order, it is observed that in para 1st of the same the AO stated that “….. the excess purchase of Rs. 17.13,600/- has been disallowed and penalty proceedings on this for under reporting in consequences of misreporting of income has been initiated within the meaning of sub- section(9) of section 270A. The assessee was issued a show- cause notice u/s 270A read with section 274 was issued on 18/03/2024.\" 3.2.5 On considering the AO's order and the challan receipt produced by the appellant, it is observed that the show- cause notice u/s 270A(9) r.w.s. 274 was issued by the AO on 18.03.2024 which indicates that the appellate is very well aware of the fact that the notice was issued u/s 270A(9) of the Act in which no immunity from imposition of penalty can be granted. Accordingly, the application for immunity u/s 270AA was rejected by the AO being non-maintainable. 3.2.6 In light of the above facts, it is concluded that on perusal it is noticed that the section states that “where the proceedings for penalty u/s section 270A has not been initiated under the circumstances referred to in sub-section (9) of the said section 270A\", the application for immunity has not been considered. In this case, the AO had levied the penalty u/s 270A(9)(c) for misreporting of income, in which no immunity from penalty will be granted as per section 270AA(3) of the IT Act. In this case the appellant had not fulfil the condition laid down ln section 270A(9) of Printed from counselvise.com ITA No. 5151/DEL/2025 Nirjeet Singh VS. ITO WARD 52(1), DELHI 4 | P a g e the IT Act, therefore, the contention of the appellant is not found to be acceptable. 3.2.7 In view of the above factual discussions of the case, the penalty levied of Rs.10,69,286/- is confirmed. Thus the grounds of appellate no. 1 to 4 are dismissed.” Further aggrieved, the assessee has filed an appeal before the Tribunal. 4. Before us, the Ld. AR has vehemently argued that the assessee was entitled to get immunity from imposition of penalty u/s 270AA of the Act as at the time of passing the assessment order and even in the show- cause notice issued for the penalty, there is no mention of section 270A(9) of the Act and, it is only mentioned at the time of passing order. Accordingly, the assessee, under a bonafide belief and in order to buy peace, had filed an application in Form 68, seeking immunity u/s270AA even though there was no under-reporting/mis-reporting of income on the part of assessee and the transaction had been fully explained during the course of assessment proceedings. Thus, the assessee ought to have been allowed the benefit of immunity u/s 270AA of the Act. 4.1 Alternatively, Ld. AR has submitted that on merits also, there is no case of under-reporting of income as the transactions stand fully explained by the assessee and the case is not covered under any of the clauses of section 270A(9) of the Act. Thus, on merits also, the penalty levied by the Ld. AO is liable to be deleted. 5. On the other hand, Ld. DR has argued that immunity u/s 270AA is available only for under-reporting of income and not for mis-reporting. The cases of mis-reporting have been mentioned in clauses (a) to (f) of sub-section 9 of Section 270A and the assessee’s case is clearly covered under Clause (a). She has, therefore, argued that the claim of immunity has rightly been rejected by the Ld. AO and, therefore, penalty levied u/s 270A deserves to be upheld. Printed from counselvise.com ITA No. 5151/DEL/2025 Nirjeet Singh VS. ITO WARD 52(1), DELHI 5 | P a g e 6. We have heard the rival submissions and carefully considered the material available on record. We note that the cases of mis-reporting of income as enumerated in section 270A(9) of the Act are as under: “270A(9) 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. ” 7. From the discussion in the assessment order and the explanation filed by the assessee during the course of assessment proceedings, it is seen that there is no case of misrepresentation or suppression of facts as envisaged in clause (a) of section 270A(9) of the Act. In fact, the assessee has duly explained the discrepancy arising due to purchase returns which was, however, not accepted by the Ld. AO and the addition of this account was made during the assessment proceedings. Subsequently, in order to buy peace, the assessee did not file further appeal against the impugned addition and instead chose to settle the matter by paying due taxes along with an application in Form 68 for grant of immunity u/s 270AA of the Act. 7.1 Under these facts and circumstances, it cannot be said that there was any misrepresentation or suppression of facts on the part of the assessee. Accordingly, we are of the considered view that the Printed from counselvise.com ITA No. 5151/DEL/2025 Nirjeet Singh VS. ITO WARD 52(1), DELHI 6 | P a g e assessee’s case is not covered u/s 270A(9)(a) and, therefore, the penalty of Rs. 10,69,286/- is liable to be deleted on merits. 8. In the result, the appeal of the assessee is allowed. Order pronounced in the Open Court on 23-12-2025. Sd/- Sd/- (VIMAL KUMAR) (RENU JAUHRI) Judicial Member Accountant Member Dated: 23.12.2025 Pooja Mittal Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi Printed from counselvise.com "