The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) removed the penalty of Rs. 3,74,072 levied on a salaried employee who had not submitted his original ITR despite earning over Rs. 30 lakh.
The taxpayer Pravesh Aggarwal had obtained salary income exceeding Rs 30 lakh during AY 2019-20 but did not submit a return. The applicant’s case was again opened, and a notice was issued.
The taxpayer has submitted a return showing a total income of Rs 30,22,900. The assessing officer considered the returned income without making any addition, but penalty proceedings u/s 270A were initiated.
The AO considered Rs 30,22,900 as under-reported income and charged a penalty of Rs 3,74,072. The CIT(A)/NFAC validated the penalty. No one represented the taxpayer before the Tribunal.
In the appeal memo, they claimed that the failure to submit the return was unintentional. The taxpayer had changed jobs and could not receive Form 16 from both employers before the deadline.
The counsel, TDS deducted by employers was shown in Form 26AS and that they assumed the tax obligation had earlier been released.
The counsel of the revenue claimed that if the section 148 notice had not been issued, then the tax might not have been levied on the income and the taxpayer might never have submitted the return reporting the salary and interest income.
The two-member bench, Anubhav Sharma (Judicial Member) and Manish Agarwal (Accountant Member), analysed the definition of under-reporting u/s 270A.
It stated, “As could be observed from sub-section 2 to section 270A reproduced herein above, ‘under-reporting income’ occurs when a person discloses a smaller amount than his actual income. In the present case, whatever income reported/declared by the Assessee has been accepted by the Department; therefore, it is not the case of reporting a smaller amount than their actual income.”
The tribunal determined that the taxpayer was under a bona fide belief that tax on salary had earlier been deducted by his employers and was shown in Form 26AS, which was available to the Income Tax Department. It does not find any misrepresentation or suppression of facts.
The tribunal said that the income evaluated under section 148 was not more than the income reported by the taxpayer. Therefore, it said that the case did not contain under-reporting or misrepresentation and removed the Rs 3.74 lakh penalty u/s 270A, allowing the appeal.
| Case Title | Pravesh Aggarwal Vs CIT(Appeals) |
| Case No. | ITA No.6412/Del/2025 |
| Assessee by | None |
| Revenue by | Shri Jitendra Singh |
| Delhi ITAT | Read Order |
