RASHTROTTHANA PARISHAT,BENGALURU V. DEPUTY COMMISSIONER OF INCOME TAX, (E), CIRCLE-1, BENGALURU

CO 23/BANG/2025

AI Insights

The case involves Rashtrotthana Parishat, a charitable trust, which claimed depreciation on assets in its income tax return for the assessment year 2017-18, leading to a double deduction claim. The Assessing Officer (AO) disallowed the depreciation and initiated penalty proceedings under section 270A for misreporting of income. The Tribunal's decision focused on the procedural validity of the penalty notice, which did not clearly specify the limb of misreporting or underreporting of income. The Tribunal referenced several judgments to support the necessity of precision in penalty notices, ultimately deciding in favor of the assessee due to the procedural defect.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775997 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 16 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 24-07-2025
• Other Referred Cases: Manjunath Cotton & Ginning Factory [2013] 359 ITR 565, Mohd. Farhan A. Shaikh [2021] 434 ITR 1, Alrameez Construction (P.) Ltd. [2023] 202 ITD 379, Scholar International Educational Foundation Vs. DCIT [2023] 157 taxmann.com 765
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: CHANDRASHEKAR
• Keywords: Capital asset; Revised return; Revenue expenditure; Depreciation; Cost of acquisition; Capital expenditure; Principle of natural justice; Initiation of penalty proceedings; Charitable institution
• Section: 271(1)(c); 11; 12AA; 12A; 10B; 139(5)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH : BANGALORE BEFORE SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No.1666/Bang/2024 Assessment Year : 2017-18 DCIT (Exemptions), Circle – 1, Bangalore. Vs. Rashtrotthana Parishat, 93/2, Keshava Shilpa, K. G. Nagar, Chamarajpet, Bangalore – 560 019, Karnataka. PAN : AAATR 1735 R APPELLANT RESPONDENT CO No.23/Bang/2025 (ITA No.1666/Bang/2024) Assessment Year : 2017-18 RashtrotthanaParishat, 93/2, Keshava Shilpa, K. G. Nagar, Chamarajpet, Bangalore – 560 019, Karnataka. PAN : AAATR 1735 R Vs. DCIT (Exemptions), Circle – 1, Bangalore. APPELLANT RESPONDENT Assessee by : Shri. Chandrashekar, Advocate Revenue by : Shri. Muthu Shankar, CIT(DR)(ITAT), Bangalore. Date of hearing : 19.08.2025 Date of Pronouncement : 09.09.2025 O R D E R Per Laxmi Prasad Sahu, Accountant Member : This appeal is filed by the Revenue and CO is filed by the assessee against the Order passed bythe CIT(A) vide DIN and Order No.ITBA/NFAC/S/250/2024-25/1066399025(1) dated 04.07.2024. Printed from counselvise.com ITA No.1666/Bang/2024 CO No.23/Bang/2025 Page 2 of 20 2. The Revenue has raised the following grounds of appeal: Printed from counselvise.com ITA No.1666/Bang/2024 CO No.23/Bang/2025 Page 3 of 20 3. Grounds of cross objection raised by the assessee in CO are as under: Printed from counselvise.com ITA No.1666/Bang/2024 CO No.23/Bang/2025 Page 4 of 20 4. Before leaping straightway to the penalty proceedings, it is very much pertinent here to discuss with regard to the disallowances made in the assessment proceedings for ease of understanding and appreciating the real facts which leads to the initiation of penalty proceedings. 4.1 Brief facts of the case are that the assessee Trust filed its return of Income for the Asst. year 2017-18 on 28/10/2017 declaring Nil Income after claiming exemption u/s 11 of the Act. Thereafter the case was selected for scrutiny under CASS. During the course of the Assessment proceedings the AO asked to furnish details of depreciation claimed (Block-wise), details of Asset acquired and details of application during the F.Y 2016-17, previous years with respect to acquisition/procurement of capital asset(s) against which depreciation has been claimed for A.Y 2017- 18 and to substantiate their claim of depreciation and amount incurred for capital assets claimed as application vis-à-vis section 11(6) of the Act. 4.2 As observed by the AO, in response the assessee has submitted replies on various dates furnishing therein partial details called for and more notably also submitted that depreciation on assets has not been claimed as application of Income. 4.3 The AO on verification of return filed and the submissions made, noticed that the revenue expenditure claimed as application of income is Rs.55,56,54,057/- which is inclusive of depreciation claim of Rs. 7,53,66,656/-. Further the auditor in his Audit report furnished in form 10B has declared the amount of income applied to charitable or religious purposes in India during the Asst. year DCIT(E), Circle-1, Bengaluru 2017-18 as Rs. Printed from counselvise.com ITA No.1666/Bang/2024 CO No.23/Bang/2025 Page 5 of 20 67,70,38,920/- [ Rs.55,56,54,057/- (revenue expenditure) + Rs. 8,11,20,826/- (capital expenditure) ]. 4.4 The AO on verification of details furnished noticed that the depreciation claim is also made in the computation of Income and Income & expenditure submitted by the assessee. Accordingly the AO held that revenue expenditure claimed as application of income includes the depreciation claim and the depreciation claim is in contravention of section 11(6) of the Act as the assessee has also claimed the capital expenditure as application of income which according to AO amounts to claim of double deduction and accordingly disallowed the claim of depreciation amounting to Rs.7,53,66,656/- claimed by the assessee trust as it violates section 11(6) of the Act. 4.5 Further, with regard to claim of Loss on sale of vehicle amounting to Rs.1,77,853/- as application of Income, the AO disallowed the same & not treated as application of Income on the ground that the assessee trust has not expended any amounts towards the items of expenditure & further the entire cost of acquisition of vehicle was allowed as application in earlier years & thus held that the loss cannot be treated as application again. 4.6 Finally, on or before completing the assessment proceedings, the AO initiated the penalty proceedings u/s 270A of the Act in respect of disallowance of depreciation claimed as application amounting to Rs.7,53,66,656/- by stipulating the following reasons in the order of assessment- \"11. The nature of additions made as detailed in the foregoing paragraphs attracts the provisions of section 270A of the Income -tax Printed from counselvise.com ITA No.1666/Bang/2024 CO No.23/Bang/2025 Page 6 of 20 Act,1961 in as much as the assessee has mis-reported the income in the Dcit(E), Circle-1, Bengaluru Return of Income filed by the assessee on 28-10-2017 for the assessment year 2017-18. The assessee has claimed both the capital expenses and depreciation as application of income. Therefore, penalty proceedings are initiated u/s.274 read with section 270A of the Income-tax Act, 1961 separately.\" Penalty Notice u/s 274 r.w.s. 270A of Income Tax Act, 1961 for mis- reporting of income is enclosed herewith. 4.7 Thereafter, the AO issued penalty notice u/s 274 r.w.s. 270A of the Act dated 23/12/2019 requesting the assessee trust to appear and show cause as to why an order imposing a penalty u/s 270A of the Act should not be made under section 270A of the Act. The AO in the said penalty notice had also observe that in the course of proceedings before me for the Assessment year 2017-18, it appears to me Under-reporting /misreporting of income. 4.8 During the course of the Penalty proceedings, the assessee submitted that there has been neither an under reporting/misreporting of income. Further the assessee admitted that by oversight while computing the income, the assessee trust omitted to add back depreciation which is purely a clerical error and not deliberate. Further the assessee trust also submitted that the their case is also not covered by any of the provision listed in sub section (2) of section 270A which defines under reporting and accordingly prayed to condone the bonafide error on their part & drop the penalty proceedings initiated under section 270A of the Act. Printed from counselvise.com ITA No.1666/Bang/2024 CO No.23/Bang/2025 Page 7 of 20 4.9 The AO after considering the above reply of the assessee trust held that the assessee contention is not found to be acceptable. The AO was of the opinion that the assessee had option to rectify its mistake by filing revised return of income as per section 139(5) of the Act and during the proceedings, it was noticed DCIT(E), Circle-1, Bengaluru by AO that the assessee has not filed it voluntarily. In view of the above facts, the AO held that the assessee has misreported its income for the Asst. year 2017-18 and as per section 270A of the Act, the quantum of misreported income is Rs.7,53,66,656/-. As per sub-section (8) of section 270A of the Act, the penalty on misreported income shall be a sum equal to two hundred percent of the amount of tax payable on misreported income and accordingly the AO levied penalty of Rs. 5,31,48,508/- U/s 270A of the Act. 5. Aggrieved from the above Order, Revenue filed appeal before the Tribunal. The Co-ordinate Bench vide Order dated 30.12.2024 allowed appeal of the Revenue. Later on, assessee filed MA No.2/Bang/2025 vide order dated 28.05.2025. The Co-ordinate Bench after hearing the MA, recalled the Order observing as under: 6. Considering the above MA and the assessee’s CO dated 24.07.2025, the learned Counsel has filed written synopsis in support of his arguments which is as under: Printed from counselvise.com ITA No.1666/Bang/2024 CO No.23/Bang/2025 Page 8 of 20 1. RashtrotthanaParishat (Respondent/Cross Objector) is an institution registered under section 12A of the Income Tax Act, 1961 (‘the Act’). 2. In the Income Tax Return (‘ITR’) for the above AY, it claimed depreciation of Rs 7.53 Crore by inadvertence which resulted in a double claim of deduction. However, in the Audit Report in Form No. 10B, depreciation was not claimed. 3. In the assessment, the Assessing Officer disallowed the claim of depreciation and initiated penalty proceedings under section 270A of the Act. 4. The show cause notice for the initiation of penalty proceedings issued by the learned Assessing Officer (‘the learned AO’) suffered from a serious defect as it did not indicate the limb of the penalty provisions (i.e. under reporting / mis-reporting). The Assessing Officer completed the penalty proceeding and levied penalty of Rs 5.31 Crore for mis-reporting of the notional tax amount. 5. In the appeal filed by the Respondent/Cross Objector, the Commissioner of Income Tax (Appeals) [‘CIT(A)’] deleted the penalty taking a view that the claim made in the ITR was an inadvertent and a bona fide mistake and no mens rea was involved. Printed from counselvise.com ITA No.1666/Bang/2024 CO No.23/Bang/2025 Page 9 of 20 6. The revenue authorities preferred an appeal before the Honourable Bengaluru Bench of the Income Tax Appellate Tribunal (‘the HonourableITAT’). The HonourableITAT held that the CIT(A) was not correct in deleting the penalty on the grounds of absence of mens rea and upheld the order of the AO. However, during the course of the hearing, the submissions made by the Authorised Representative of the Respondent/Cross Objector that the defect in the show cause notice did not indicate the limb of the penalty provisions (i.e. under reporting / mis-reporting) was noted and recorded by the HonourableITAT in its order but was not adjudicated upon as the Assessee had not filed a cross objection on this ground and that the ground was being urged orally during the course of hearing. 7. The Respondent/Cross Objector filed a Miscellaneous Application seeking the recall of the Order since an important legal issue noticed and recorded by the Honourable ITAT was not adjudicated. The Honourable ITAT was pleased to recall the earlier Order for the limited purpose of examining and adjudicating the legality of the show cause notice and to decide whether the penalty levied will survive. 8. In this back ground, the Respondent/Cross Objector submits that the very initiation of the penalty proceedings is invalid as the show cause notice suffered from a very serious infirmity since the applicable limb was not specifically Printed from counselvise.com ITA No.1666/Bang/2024 CO No.23/Bang/2025 Page 10 of 20 mentioned and the non applicable limb not being struck off by the learned AO. In this regard, the Respondent/Cross Objector relies on the following judgements/orders: i) Manjunath Cotton & Ginning Factory [2013] 359 ITR 565 (Honourable High Court of Karnataka) ii) Mohd. Farhan A. Shaikh [2021] 434 ITR 1 (Honourable Bombay High Court) iii) Alrameez Construction (P.) Ltd. [2023] 202 ITD 379 (Honourable Mumbai Bench of the Income Tax Appellate Tribunal). 9. It is humbly submitted that the decisions of the Jurisdictional Karnataka High Court in the case of Manjunatha Cotton & Ginning factory and that of the Bombay High Court in the case of Mohd Farhan Sheikh were rendered on the validity of the notice issued under section 274 read with section 271(1)(c) of the Act. In the present case of this assessee the notice is also issued under section 274 read with section 270A of the Act. 10. It is submitted that Section 270A was introduced into the statute w.e.f. 01-04-2017 by the Finance Act 2016, virtually replacing Section 271 of the Act. It is further submitted that Section 274 continues to be the primary section under which Penalty can be initiated and any notice issued to initiate penalty proceedings, be it u/s 271 or u/s 270A has to be Printed from counselvise.com ITA No.1666/Bang/2024 CO No.23/Bang/2025 Page 11 of 20 necessarily done by invoking the provision of Section 274. Hence the case laws cited continue to be relevant to the facts of the present case on hand. 11. It is to be noticed that clause (c) of subsection (1) of Section 271, there existed two limbs under which Penalty could be initiated ie. furnishing inaccurate particulars of income OR concealment of income. The Courts have held that it was necessary for the AO to clearly state in the notice the specific limb under which Penalty is sought to be levied and when not so stated the notice issued is bad in law and entire penalty proceeding arising out of such a notice is to be quashed. It is important to note the fact that though the quantum of penalty that could be levied under both these limbs were the same, without any difference in the quantum inter se. 12. In the present case, under section 270A, there also two limbs under which Penalty could be initiated ie. under reporting of income OR misreporting of income. In the case of under reporting of income the penalty leviable is 50% of the tax payable on the under reported income and in the case of mis reporting of income the penalty leviable shall be 200% of the tax payable on the income which was under reported by way of misreporting of income. 13. From the above, when the Courts have held that it was necessary for the AO to clearly state in the notice the specific Printed from counselvise.com ITA No.1666/Bang/2024 CO No.23/Bang/2025 Page 12 of 20 limb under which Penalty is sought to be levied u/s 271(1)(c) of the Act, when the consequences were the same for both the limbs, it is all the more important to specify the limb u/s 270A, where the consequences are different for both these limbs. Further in the case of mis reporting of income the Act specifies the violations of six different kinds which attract mis reporting of income. The violations specified are exhaustive and not inclusive in nature. Hence it is imperative for the AO to specify in the notice as to which of the six specified violations has led to issue the notice to initiate penalty proceeding. 14. In the present case the Notice u/s 274 rws270A does not state the limb under which penalty proceeding is sought to be initiated and if under the limb misreporting of income, it does not specify which of the six limbs of misreporting of income has been violated by the assessee. 15. The third case law relied upon ieAlrameez Construction (P.) Ltd. [2023] 202 ITD 379 (Honourable Mumbai Bench of the Income Tax Appellate Tribunal), is on Section 270A& is applicable to facts of the assessee’s case. In para 5 of it order, the bench has clearly opined that specifying the limb under which penalty is sought to be levied is essential for a valid proceeding. (copy of the decision is enclosed). In view of the judgements relied upon and the applicability of the same to the facts of the assessee’s case, it is the assessee’s Printed from counselvise.com ITA No.1666/Bang/2024 CO No.23/Bang/2025 Page 13 of 20 prayer that the Hon’ble Tribunal quash the penalty order by holding that the notice issued u/s 274 rws270A of the Act as bad in law and thus rendering the entire penalty proceeding void ab initio. 7. In support of his arguments, he relied on the following judgments: i. Saltwater Studio LLP [2023] 157 taxmann.com 749 (Mumbai – Trib.) ii. Price Waterhouse Coopers (p.) Ltd. [2012] 25 taxmann.com 400 (SC) iii. Sasan Power Ltd. [2023] 157 taxmann.com 763 (Mumbai Trib.) iv. Prem Brothers Infrastructure LLP [2022] 142 taxmann.com 38 (Delhi) v. IIFL Samasta Finance Ltd., ITA No.1054/Bang/2024 vi. Reliance Petroproducts Pvt. Ltd., [2010-] 189 Taxman 322 (SC). vii. Manjuanth Cotton and Ginning Factory [2013] 218 Taxman 423 (Karnataka HC) viii. Honda Siel Power Products Ltd., [2007] 165 Taxman 307 (SC) ix. Sankeshwar Printers Pvt. Ltd., [2013] 218 Taxman 360 (Karntaka HC) x. Subhash Runwal [2025] 170 taxmann.com 798 (Pune bench of ITAT) [ITA No.1279/PUN/2024] xi. Laxmi Electronic Corporation Ltd., [1991] 54 Taxman 515 (Allahabad High Court) 8. In addition to the written synopsis, he submitted that the AO has not struck down under which limb the penalty has to be levied as per notice issued which is placed at Paper Book Page No.70 issued under section 274 r.w.s.270A of the Act. Therefore, the penalty is not leviable and he also submitted that the Hon’ble Tribunal in the case of Scholar International Educational Foundation Vs. DCIT reported in [2023] 157 taxmann.com 765 (Delhi – Trib). On the similar set of facts deleted the penalty and observed that non-striking of irrelevant portion in penalty show cause notice would Printed from counselvise.com ITA No.1666/Bang/2024 CO No.23/Bang/2025 Page 14 of 20 vitiate entire penalty proceedings itself and submitted that the issue is completely covered in favour of the assessee. 9. On the other hand, the learned DR relied on the Order of AO and submitted that the learned CIT(A) has wrongly allowed the appeal of the assessee observing that the AO has nowhere been able to establish that any mens rea was involved in this Act without appreciating that penalty is a deterrent provision and presence of mens rea is not necessary. Here in the case on hand in Form No.10AB, the auditor had not claimed the depreciation as application of income. However, assessee willfully claimed it in income tax return filed and relying on the judgment of Sumati Dayal vs CIT reported in (1995) 80 taxman 89 (SC) and CIT vs Durga Prasad More REPORTED IN [1971]82 ITR 540(SC), the penalty should be sustained. 10. Considering the rival submissions, we noted that assessee is a Trust which has been granted registration u/s 12A of the Act by CIT(A), Bangalore vide No.PRO.718/10A/VolI/A-II-R-194. During the course of assessment proceedings, AO noticed that assessee has claimed revenue expenditure of Rs.55,56,54,057/- including depreciation of income and AO has observed from audit report, Form No.10B that the amount of income of the previous year applied to charitable or religious purpose in India during 2016-17 of Rs.67,70,38,920/- (55,56,54,057/- revenue expenditure + Rs.8,11,20,823/- capital expenditure). Depreciation claimed has also been made in the computation of income and expenditure as per submission filed by the assessee. The AO after examination of the submission made that assessee has claimed depreciation and same was considered as application of income. Further, the assessee has claimed expenditure on computation of income as Printed from counselvise.com ITA No.1666/Bang/2024 CO No.23/Bang/2025 Page 15 of 20 well as depreciation while calculating income which amounted to double deduction in amendment made in this regard as Where cost of asset was allowed under section 11 to assessee-charitable society as application of income, assessee would not be entitled to depreciation on said asset. Accordingly, the AO disallowed the double claim of Rs.7,53,66,656/- in which the penalty 200% of the tax to be evaded and imposed penalty of Rs.5,31,48,508/-. During the course of hearing of CO (Cross Objection) filed by the assessee, assessee strongly referred to notice issued by the ACIT dated 23.12.2019. For the sake of convenience, we are reproducing the same as under: Printed from counselvise.com ITA No.1666/Bang/2024 CO No.23/Bang/2025 Page 16 of 20 11. On going through the above notice, we noted that AO has issued penalty notice for both the limbs which is under reporting / misreporting of income but he has not specified under which limb the penalty is to be levied. As per sub- sections 7 and 8 of section 270A of the Act, the quantum of penalty is different for both the limbs. Therefore, the AO should have clearly mentioned in the notice that under which limb the penalty is levied. The case law cited by the assessee supports the CO filed by the assessee. Assesseer has also relied on the judgment in the case of Scholar International Educational Foundation Vs. DCIT (supra) which is applicable to the assessee. The relevant part of the judgment is as under : 3. We have heard the rival submissions and perused the material available on record. We find that the assessee being a charitable trust enjoying registration u/s 12AA of the Act consequentially eligible for exemption u/s 11 of the Act had claimed disallowance of depreciation on certain fixed assets as an application of income, ignoring the amendment brought u/s 11(6) of the Act w.e.f. 01.04.2015. This disallowance of deprecation was accepted by the assessee in the quantum proceedings. The ld. AO initiated penalty proceedings u/s 270A of the Act on 01.11.2019 wherein in the said notice issued u/s 274 r.w.s. 270A of the Act, the ld. AO had not struck off the irrelevant portion i.e. whether the assessee has underreported its income or misreported its income. Since, no specific offence committed by the assessee was mentioned by the ld. AO in the show cause notice, the assessee vide ground no. 2 before us had submitted that non-striking of irrelevant portion in the penalty show cause notice shall vitiate the entire penalty proceedings itself. This issue is no longer res integra in view of the Full Bench decision of Hon'ble Bombay High Court in the case of Mohd. Farhan A. Shaikh v. DCIT reported in [2021] 125 Printed from counselvise.com ITA No.1666/Bang/2024 CO No.23/Bang/2025 Page 17 of 20 taxmann.com 253/280 Taxman 334/434 ITR 1 (Bombay) wherein it was held as under: \"Question No. 3: What is the effect of the Supreme Court's decision in Dilip N. Shroff Case (supra) on the issue of non-application of mind when the irrelevant portions of the printed notices are not struck off? 187. In Dilip N. Shroff case (supra), for the Supreme Court, it is of \"some significance that in the standard Pro-forma used by the assessing officer in issuing a notice despite the fact that the same postulates that inappropriate words and paragraphs were to be deleted, but the same had not been done\". Then, Dilip N. Shroff case (supra), on facts, has felt that the assessing officer himself was not sure whether he had proceeded on the basis that the assessee had concealed his income or he had furnished inaccurate particulars. 188. We may, in this context, respectfully observe that a contravention of a mandatory condition or requirement for a communication to be valid communication is fatal, with no further proof. That said, even if the notice contains no caveat that the inapplicable portion be deleted, it is in the interest offairness and justice that the notice must be precise. It should give no room for ambiguity. Therefore, Dilip N. Shroff Case (supra) disapproves of the routine, ritualistic practice of issuing omnibus show-cause notices. That practice certainly betrays non- application of mind. And, therefore, the infraction of a mandatory procedure leading to penal consequences assumes or implies prejudice. 189. In Sudhir Kumar Singh, the Supreme Court has encapsulated the principles of prejudice. One of the principles is that \"where procedural and/or substantive provisions of law embody the principles of natural justice, their infraction per se does not lead to invalidity of the orders passed. Here again, prejudice must be caused to the litigant, \"except in the case of a mandatory Printed from counselvise.com ITA No.1666/Bang/2024 CO No.23/Bang/2025 Page 18 of 20 provision of law which is conceived not only in individual interest but also in the public interest\". 190. Here, section 271(1)(c) is one such provision. With calamitous, albeit commercial, consequences, the provision is mandatory and brooks no trifling with or dilution. For a further precedential prop, we may refer to Rajesh Kumar v. CIT [2007] 27 SCC 181, in which the Apex Court has quoted with approval its earlier judgment in State of Orissa v. Dr. Binapani Dei AIR 1967 SC 1269. According to it, when by reason of action on the part of a statutory authority, civil or evil consequences ensue, principles of natural justice must be followed. In such an event, although no express provision is laid down on this behalf, compliance with principles of natural justice would be implicit. If a statue contravenes the principles of natural justice, it may also be held ultra vires Article 14 of the Constitution. 191. As a result, we hold that Dilip N. Shroff Case (supra) treats omnibus show-cause notices as betraying non-application of mind and disapproves of the practice, to be particular, of issuing notices in printed form without deleting or striking off the inapplicable parts of that generic notice. Conclusion: We have, thus, answered the reference as required by us; so we direct the Registry to place these two Tax Appeals before the Division Bench concerned for further adjudication. \" 4. Further, we also find that different rates of penalty are stipulated in Section 270A of the Act for underreporting of income; for misreporting of income and for underreporting as well as misreporting of income. Hence, it is even more onerous on the part of the ld. AO to specifically mention the offence committed by the assessee whether it had underreported the income or misreported the income or committed both the offence so as to apply the respective penalty Printed from counselvise.com ITA No.1666/Bang/2024 CO No.23/Bang/2025 Page 19 of 20 amounts as stipulated u/s 270A of the Act. This onerous task being not fulfilled by the ld. AO would result in entire penalty proceedings getting vitiated. In view of the specific provisions of the Act and in view of the decision of Hon'ble Bombay High Court referred (supra), we direct the AO to delete the penalty levied u/s 270A of the Act in the facts and circumstances of the instant case. Accordingly, the ground no. 2 raised by the assessee is hereby allowed. Since, the relief is granted on this technical ground, the other grounds raised by the assessee need not be adjudicated and they are left open. 12. Respectfully following the above judgment, we allow the CO filed by the assessee. 13. Since we have allowed the CO filed by the assessee and held that the notice issued by the AO itself does not survive for the levy of penalty once the very basis for imposing penalty does not survive, then the decision taken on such notice has no leg to stand. Therefore, the penalty order passed by the AO is improper. Hence there is no need to adjudicate the appeal filed by the Revenue against the deletion by the CIT(A) imposing of penalty under section 270A of the Act by the AO. Printed from counselvise.com ITA No.1666/Bang/2024 CO No.23/Bang/2025 Page 20 of 20 14. In the result, appeal filed by the Revenue is dismissed and CO filed by the assessee is allowed. Pronounced in the open court on the date mentioned on the caption page. Sd/ Sd/- Sd/- (KESHAV DUBEY) (LAXMI PRASAD SAHU) Judicial Member Accountant Member- Bangalore. Dated: 09.09.2025. /NS/* Copy to: 1. Appellants 2. Respondent 3. DRP 4. CIT 5. CIT(A) 6. DR,ITAT, Bangalore. 7. Guard file By order Assistant Registrar, ITAT, Bangalore. Printed from counselvise.com "