The notice said under-reporting; the order said misreporting. Can the charge change between them?
No. The enhanced penalty for misreporting is available only if the case falls within a named sub-clause of s.270A(9), and the officer must say which. Shifting to a heavier charge in the order, having alleged only under-reporting in the notice, sank the penalty.
Decided by the ITAT (ITAT Mumbai Bench 'A' — Smt. Beena Pillai (Judicial Member) and Jagadish (Accountant Member)) on 2026-06-30, reported as [2026] 188 taxmann.com 90 (Mumbai - Trib.); IT Appeal No. 188 (Mum.) of 2026 (AY 2017-18). It bears on section 270A, section 270A(9), section 274, section 80P(2)(d) of the Income Tax Act 1961, in Penalty matters.
The difference between under-reporting and misreporting is the difference between 50% and 200% of the tax. It is worth reading the notice and the order side by side to see whether the charge quietly changed.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee is a co-operative credit society registered under the Maharashtra State Co-operative Societies Act, 1960, accepting deposits from members and lending to them; it is not a partnership firm or an LLP and has no partnership deed. Through an error of the PAN issuing authority it was allotted a PAN showing its status as 'Firm' instead of 'Association of Persons'. For assessment year 2017-18 it filed no return under section 139(1), and, on receiving a notice under section 148, could not file one in response either because of the incorrect PAN status in the system. During the reassessment proceedings it explained the position and claimed deduction under section 80P(2)(d) on interest of Rs. 5,23,417 earned from Saraswat Co-operative Bank. The Assessing Officer refused the deduction, assessed that interest as taxable, and levied a penalty of Rs. 3,23,472 under section 270A for under-reporting of income in consequence of misreporting. The Commissioner (Appeals), NFAC, upheld the penalty by an order of 11 November 2025, holding that no valid return existed, that section 80A(5) therefore barred the deduction, and that income assessed for the first time in reassessment is deemed under-reported under section 270A(2)(b).
The penalty under section 270A was deleted and the appeal allowed. The show-cause notice under section 274 read with section 270A alleged only under-reporting, while the penalty was finally levied for under-reporting in consequence of misreporting, and the Assessing Officer never identified the clause of section 270A(9) said to constitute misreporting, so the mandatory requirement for the enhanced penalty was not satisfied; on the facts the explanation was bona fide and the case did not fall within section 270A(9) at all. Note the limit of the decision: this was a penalty appeal, and the Tribunal did not decide whether the society was entitled to the deduction under section 80P(2)(d). The disallowance in the reassessment was not disturbed.
The Bench started from the separation of the two proceedings: penalty under section 270A is distinct from assessment, and an addition or a rejected claim does not by itself attract penalty unless the conditions in the section are satisfied. For a penalty for misreporting the officer must establish that the case falls within one of the categories in section 270A(9). The Revenue had placed nothing on record to show that the society furnished false particulars, suppressed income or adopted any mode of misreporting listed there, and the explanation about the PAN error was not found to be false. The interest income itself had been disclosed and the dispute was only about the allowability of the deduction, a claim resting on the society's assertion of its own status rather than on any false information. The Bench then noted the mismatch between the charge in the show-cause notice and the charge in the penalty order, and the failure to identify the clause of section 270A(9) relied on. On the totality it held the explanation bona fide and the penalty unsustainable. The Bench cited no authority.
The Assessing Officer has not specified the particular clause of section 270A(9) under which the alleged misreporting is covered. Thus, the mandatory requirement for imposing enhanced penalty for misreporting has not been satisfied.
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Handle my notice → Ask a CA on WhatsAppNo. The enhanced penalty for misreporting is available only if the case falls within a named sub-clause of s.270A(9), and the officer must say which. Shifting to a heavier charge in the order, having alleged only under-reporting in the notice, sank the penalty. This was decided by the ITAT (ITAT Mumbai Bench 'A' — Smt. Beena Pillai (Judicial Member) and Jagadish (Accountant Member)) and bears on section 270A, section 270A(9), section 274, section 80P(2)(d) of the Income Tax Act 1961. It is reported as [2026] 188 taxmann.com 90 (Mumbai - Trib.); IT Appeal No. 188 (Mum.) of 2026 (AY 2017-18). The difference between under-reporting and misreporting is the difference between 50% and 200% of the tax. It is worth reading the notice and the order side by side to see whether the charge quietly changed. If it applies to you, the first step is this: Put the s.270A notice and the penalty order next to each other and compare the charge in each.
The assessee is a co-operative credit society registered under the Maharashtra State Co-operative Societies Act, 1960, accepting deposits from members and lending to them; it is not a partnership firm or an LLP and has no partnership deed. Through an error of the PAN issuing authority it was allotted a PAN showing its status as 'Firm' instead of 'Association of Persons'. For assessment year 2017-18 it filed no return under section 139(1), and, on receiving a notice under section 148, could not file one in response either because of the incorrect PAN status in the system. During the reassessment proceedings it explained the position and claimed deduction under section 80P(2)(d) on interest of Rs. 5,23,417 earned from Saraswat Co-operative Bank. The Assessing Officer refused the deduction, assessed that interest as taxable, and levied a penalty of Rs. 3,23,472 under section 270A for under-reporting of income in consequence of misreporting. The Commissioner (Appeals), NFAC, upheld the penalty by an order of 11 November 2025, holding that no valid return existed, that section 80A(5) therefore barred the deduction, and that income assessed for the first time in reassessment is deemed under-reported under section 270A(2)(b). The matter was decided on 2026-06-30 by the ITAT (ITAT Mumbai Bench 'A' — Smt. Beena Pillai (Judicial Member) and Jagadish (Accountant Member)). On those facts the ITAT held as follows. The penalty under section 270A was deleted and the appeal allowed. The show-cause notice under section 274 read with section 270A alleged only under-reporting, while the penalty was finally levied for under-reporting in consequence of misreporting, and the Assessing Officer never identified the clause of section 270A(9) said to constitute misreporting, so the mandatory requirement for the enhanced penalty was not satisfied; on the facts the explanation was bona fide and the case did not fall within section 270A(9) at all. Note the limit of the decision: this was a penalty appeal, and the Tribunal did not decide whether the society was entitled to the deduction under section 80P(2)(d). The disallowance in the reassessment was not disturbed.
The Bench started from the separation of the two proceedings: penalty under section 270A is distinct from assessment, and an addition or a rejected claim does not by itself attract penalty unless the conditions in the section are satisfied. For a penalty for misreporting the officer must establish that the case falls within one of the categories in section 270A(9). The Revenue had placed nothing on record to show that the society furnished false particulars, suppressed income or adopted any mode of misreporting listed there, and the explanation about the PAN error was not found to be false. The interest income itself had been disclosed and the dispute was only about the allowability of the deduction, a claim resting on the society's assertion of its own status rather than on any false information. The Bench then noted the mismatch between the charge in the show-cause notice and the charge in the penalty order, and the failure to identify the clause of section 270A(9) relied on. On the totality it held the explanation bona fide and the penalty unsustainable. The Bench cited no authority. In the words reproduced by the source cited on this page: "The Assessing Officer has not specified the particular clause of section 270A(9) under which the alleged misreporting is covered. Thus, the mandatory requirement for imposing enhanced penalty for misreporting has not been satisfied."
It was decided by the ITAT on 2026-06-30 and is reported as [2026] 188 taxmann.com 90 (Mumbai - Trib.); IT Appeal No. 188 (Mum.) of 2026 (AY 2017-18). Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 270A, section 270A(9), section 274, section 80P(2)(d), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The penalty under section 270A was deleted and the appeal allowed. The show-cause notice under section 274 read with section 270A alleged only under-reporting, while the penalty was finally levied for under-reporting in consequence of misreporting, and the Assessing Officer never identified the clause of section 270A(9) said to constitute misreporting, so the mandatory requirement for the enhanced penalty was not satisfied; on the facts the explanation was bona fide and the case did not fall within section 270A(9) at all. Note the limit of the decision: this was a penalty appeal, and the Tribunal did not decide whether the society was entitled to the deduction under section 80P(2)(d). The disallowance in the reassessment was not disturbed. It arises in Penalty matters, on section 270A, section 270A(9), section 274, section 80P(2)(d) of the Income Tax Act 1961, and was decided by ITAT Mumbai Bench 'A' — Smt. Beena Pillai (Judicial Member) and Jagadish (Accountant Member). Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Ask in your reply which sub-clause of s.270A(9) is alleged, and note if no answer comes. Where the disallowance flowed from a portal or classification problem rather than anything you did, say so with evidence.
Searched for later treatment; none was found. That is not the same as a source affirming it. No later decision applying, following or affirming this order was found, and none is likely yet: it was decided on 30 June 2026 and carries no citator entry. It sits in a consistent line of decisions on the same point, of which Prem Brothers Infrastructure LLP v. National Faceless Assessment Centre [2022] 142 taxmann.com 38 / [2022] 288 Taxman 768 (Delhi) is the leading one, on a notice that does not identify the limb of section 270A relied on. That is support for the proposition, not later treatment of this order, and this Bench itself cited no authority. Whether the Revenue has appealed is not known. That finding was checked against a published source, which is linked on this page, on 2026-08-25. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The order is now available in full, reported at [2026] 188 taxmann.com 90 (Mumbai - Trib.), and the particulars are confirmed: ITAT Mumbai 'A' Bench, IT Appeal No. 188 (Mum.) of 2026, assessment year 2017-18, decided 30 June 2026. The accountant member is given only as 'Jagadish' on the order itself, so that is not a defect in the reporting. Two things to keep in view before citing it. It decides the penalty only: the Tribunal did not rule on whether the society was entitled to the section 80P(2)(d) deduction, and did not address the Revenue's argument that section 80A(5) barred the deduction because no return was filed. And the relief rests on a defect in the officer's own paperwork - a notice alleging under-reporting followed by a penalty for misreporting, with no clause of section 270A(9) identified - so it does not help where the officer has charged the correct limb from the start. Nothing in the order supports a proposition about the successor provision in the Income-tax Act 2025, and the earlier note's reference to a Finance Act 2026 extension of the immunity provision could not be confirmed and has been removed. A Tribunal decision binds no one outside its jurisdiction. Check for a contrary co-ordinate bench view and whether the Revenue has appealed. The order does not say what became of the section 80P(2)(d) claim in the assessment itself. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The penalty under section 270A was deleted and the appeal allowed. The show-cause notice under section 274 read with section 270A alleged only under-reporting, while the penalty was finally levied for under-reporting in consequence of misreporting, and the Assessing Officer never identified the clause of section 270A(9) said to constitute misreporting, so the mandatory requirement for the enhanced penalty was not satisfied; on the facts the explanation was bona fide and the case did not fall within section 270A(9) at all. Note the limit of the decision: this was a penalty appeal, and the Tribunal did not decide whether the society was entitled to the deduction under section 80P(2)(d). The disallowance in the reassessment was not disturbed.
TaxSphere, “Mithibai College Employees Co-operative Credit Society Ltd v ITO”, https://taxnotice.vittsphere.com/caselaw/case/mithibai-college-employees-v-ito/ (validity last checked 2026-08-25)
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After a search I admitted the cash as professional receipts in a revised computation during the assessment and paid the tax. The AO has now levied penalty under s.270A(9) for misreporting AND a second penalty under s.271AAD(1)(ii) for omitting entries from my books. Can he do both?
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