Section 270A Penalty Deleted on Bona Fide Non-Filing Explanation: ITAT Jaipur

Abhishubham Bahadur Saxena Vs ITO (ITAT Jaipur)

Summary: ITAT Jaipur allowed the assessee’s appeal for AY 2018-19 and directed deletion of penalty of Rs.8,29,034/- levied under Section 270A of the Income Tax Act, 1961. The assessee had not originally filed his return under section 139. Based on departmental information showing salary income of Rs.26,05,964/-, proceedings were reopened under section 148. In response, the assessee filed his return declaring total income of Rs.20,49,700/-, which was accepted without variation in the reassessment. The AO nevertheless treated the income as underreported under section 270A(2)(b) and as misreporting through misrepresentation or suppression of facts under section 270A(9)(a).

Before examining the merits, the Tribunal dealt with a delay of 49 days in filing the appeal. The assessee explained that his PAN reflected Kanpur jurisdiction instead of Jaipur because of an outdated address. He had applied for correction of PAN particulars and transfer of jurisdiction, deposited the appeal fee within limitation and followed up with the Department. Relying upon Collector, Land Acquisition, Anantnag & Anr. v. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC), the Tribunal held that sufficient cause should receive liberal construction to advance substantial justice and condoned the delay.

On merits, the Tribunal noted that the statutory conditions for underreporting were otherwise attracted because the assessee had disclosed his income for the first time in the return filed in response to notice under section 148. It also recorded that the assessee had not demonstrated any infirmity in the lower authorities’ interpretation that suppression of facts brought the case within section 270A(9)(a). However, the Tribunal proceeded to examine the important exclusion contained in section 270A(6)(a), under which income otherwise qualifying as underreported income is excluded where the assessee furnishes a bona fide explanation and discloses all material facts substantiating it.