Tribunal deletes section 270A penalty for defective notice that failed to specify the exact misreporting limb

5-Second Takeaway

The Tribunal deleted the section 270A penalty because the notice and penalty order did not specify which exact limb of section 270A(9)(a) to (g) was invoked. It held that the enhanced 200% penalty can be sustained only when the Assessing Officer clearly brings the case within one of the enumerated misreporting categories.

The dispute concerned a penalty imposed under section 270A for alleged under-reporting of income in consequence of misreporting. The assessment order recorded satisfaction and initiated penalty proceedings, but the show-cause notice and the final penalty order referred only broadly to “misreporting of income.”

The Tribunal noted that section 270A draws a clear distinction between under-reporting of income and under-reporting in consequence of misreporting. Because the statute permits the enhanced 200% penalty only where the case falls within one of the specific instances listed in section 270A(9)(a) to (g), the exact charge had to be clearly identified.

On the record before it, the Assessing Officer had not specified which particular limb of misreporting applied. The Tribunal therefore held that the penalty could not be sustained on such a vague invocation of the provision.

The penalty was deleted.