Ajay Pal Singh Vs ITO (ITAT Delhi)
VRS Revision Done Under Wrong Belief: Delhi ITAT Deletes 270A Penalty in Full- Honest Mistake, No Revenue Loss: ITAT Delhi Quashes 270A Penalty for VRS Recipient
Assessee, a salaried employee of Honda, filed original return declaring Rs.43,88,320 which matched Form 16. Later, believing that VRS benefits were exempt, Assessee filed a revised return declaring Rs.31,26,700. Case was selected for scrutiny on “excess refund sought”. During assessment, Assessee failed to justify reduction in income. AO noted that revised income was lower than employer’s Form 24Q, added Rs.12,61,420 being the difference, & initiated penalty u/s 270A for “misreporting”. Assessee accepted assessment & did not file appeal; tax/refund adjustments were made accordingly.
Assessee applied for immunity u/s 270AA in Form 68 within prescribed time, & submitted that he acted under a bona fide mistaken belief relating to VRS exemption. AO, however, rejected immunity & levied penalty @200% of tax on the under-reported income. Ld. CIT(A)/NFAC confirmed penalty, holding that filing a revised return with reduced income amounted to misrepresentation within s.270A(9)(a).
Before Tribunal, Assessee argued that: he is a labour-class salaried employee; full VRS income was originally disclosed; revised return was filed under a mistaken belief; no income was concealed; no loss was caused to Revenue; AO failed to consider Form 68; the case involved no element of misreporting; & immunity u/s 270AA ought to have been granted.
