Whether the Penalty u/s 270 A will be calculated based on Return filed u/s 148 or based on the Original Return u/s 139. The assessee had disclosed additional income in 148 return and paid tax. Whether Original return will be considered for Penalty u/s 270A. Please advise.
The penalty is determined with reference to what was disclosed originally and what was subsequently disclosed in the return after the 148 notice. Income Tax authorities compare the income declared in the Section 139 return and in the revised/updated return filed under Section 148, to determine if there has been “under-reporting” or “misreporting”.
Section 270A(2)(b) specifically deals with cases where the return assessed is higher than the income declared in the original return, including those filed in response to Section 148.
Penalty is levied at 50% for under-reporting, and 200% for misreporting, of the tax payable on the under-reported income.
Aggarwal Sarawagi and Co
New Delhi
CA
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