M/s. PQR is a firm liable to tax@30%. The following are the particulars furnished by the firm for A.Y.2026-27: Particulars of total income ₹ (1) As…

(c) M/s. PQR is deemed to have under-reported its income since: (1) its income assessed u/s 143(3) exceeds its income determined in a return processed u/s 143(1)(a); and (2) the income reassessed under section 147 exceeds the income assessed u/s 143(3). Therefore, penalty is leviable under section 270A for under-reporting of income. Computation of penalty leviable under section 270A Particulars ₹ ₹ Assessment under section 143(3) Under-reported income: Total income assessed under section 143(3) 75,00,000 (-) Total income determined u/s 143(1)(a) 60,00,000 15,00,000 Tax payable on under-reported income: Tax on under-reported income of ₹ 15 lakhs plus tax on total income of ₹ 60 lakhs determined u/s 143(1)(a) [30% of ₹ 75 lakh + HEC@4%] 23,40,000 Less: Tax on total income determined u/s 143(1)(a) [30% of ₹ 60 lakh +HEC@4%] 18,72,000 4,68,000 Penalty leviable@50% of tax payable 2,34,000 Reassessment under section 147 Under-reported income: Total income reassessed under section 147 1,05,00,000 (-) Total income assessed under section 143(3) 75,00,000 30,00,000 Tax payable on under-reported income: Tax on under-reported income of ₹ 30 lakhs plus tax on total income of ₹ 75 lakhs assessed u/s 143(3) [30% of ₹ 105 lakh + Surcharge @12% + HEC@4%] 36,69,120 Less: Tax on total income assessed u/s 143(3) [30%of ₹ 75 lakh + HEC@4%] 23,40,000 13,29,120 Penalty leviable@50% of tax payable 6,64,560 Note - The following assumptions have been made - (1) None of the additions or disallowances made in assessment or reassessment qualifies under section 270A(6); and (2) The under-reported income is not on account of misreporting.