Penalty for mis-reporting of income - carry forward of loss arising out of income from other sources

Facts:

Assessee an educational society was slapped with penalty under Section 270A(2) read with 270A(8) for misreporting of income which was upheld by CIT(A). On further appeal to ITAT, assessee's plea was that they reported only a loss under income from other sources and the AO had disallowed the depreciation also forming of the computation of income from other sources and post facto the disallowed depreciation also it was a loss which was reported. Thus there was no income at all which was misreported and no claim of set off or carry forward was also there, accordingly the point of levying penalty itself appeared futile. Assessee reported zero income and the AO also agreed with the zero income and then levied penalty which was incorrect. It was thus canvassed by the assessee.

Held in favour of the assessee that there was no requirement to levy penalty in this case.

Ed. Note: The way the ITAT has read the return and the automated software is interesting.

Case: Badaud Shri Vardhaman Shiksha Samiti v. ITO 2023 TaxPub(DT) 4596 (Ind-Trib)