“Indian Academy Education Trust” Misreporting penalty cannot be attracted

The Bangalore ITAT delivers a significant ruling on the procedural architecture of penalty proceedings under Section 270A. While the assessee had admittedly made an incorrect claim of depreciation resulting in double deduction, the Tribunal nevertheless deletes the penalty on jurisdictional and procedural grounds.

The Tribunal holds that a mere generic allegation of “misreporting” is insufficient unless the Assessing Officer clearly identifies the precise statutory limb under Section 270A(9) allegedly violated.

Drawing heavily from Delhi High Court precedent, the Tribunal reinforces that penalty provisions, particularly those carrying enhanced consequences for “misreporting”, must be invoked with precision and specificity. The ruling underscores that procedural fairness is not a technicality but a jurisdictional prerequisite in penalty jurisprudence.