INCOME TAX ACT, 1961

Section 270A

Penalty under section 270A - Under-reporting of income or misreporting of income - Wrong figure of annual value of house property adopted in return - Mistake on account of inadvertent error committed by accountant

AO noticed that assessee adopted annual value of house property at Rs. 5,40,000, instead of Rs. 8,40,000 in his return. Assessee submitted that the accountant, who filed his return, adopted incorrect figure while computing annual value of house property and thus, assessee requested AO to consider the difference amount as income under the head 'Income from house property'. Accordingly, AO made addition towards annual value of house property. Subsequently, he levied penalty under section 270A for under-reporting of income. Assessee contended that he being a senior citizen, engaged accountant for filing his return and submitted all the details, however, the accountant, by inadvertent error, disclosed wrong annual value of house property. But, when AO noticed the said mistake, he fairly agreed and paid taxes on annual value of house property. Therefore, there was no under-reporting of his income by misreporting of income, which warranted penalty under section 270A. Held: When AO noticed the lapse that assessee adopted annual value of house property at Rs. 5,40,000, instead of Rs. 8,40,000 in return, then assessee admitted the mistake and offered Rs. 8,40,000 under the head 'Income from house property' towards annual value of house property. Further, assessee also explained that said mistake was on account of inadvertent error committed by the accountant, who filed his return. The said mistake could not be considered as under-reporting of income for levying penalty under section 270A. Hence, the impugned penalty was deleted.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2017-18

INCOME TAX ACT, 1961

Section 270A

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