Ashutosh Dubey Vs ITO (ITAT Pune)
No Addition, No “Under-Reporting” – ITAT Deletes Section 270A Penalty When Income Returned u/s 148 Was Fully Accepted
The Pune Bench of the Income Tax Appellate Tribunal in the case of Ashutosh Dubey vs ITO held that penalty u/s 270A for under-reporting of income cannot survive when the income declared by the assessee in response to notice u/s 148 was accepted without any addition by the AO.
In this case, the assessee had not originally filed the return u/s 139(1). Based on information in Form 26AS, the AO issued notice u/s 148, pursuant to which the assessee filed the return declaring income of about ₹32.23 lakh. Importantly, the AO accepted the returned income in full and completed assessment without making any addition, yet proceeded to levy penalty of ₹4.05 lakh u/s 270A alleging “under-reporting of income.”
The Tribunal observed that the penalty order itself did not clearly explain how there was any under-reporting once the returned income had been fully accepted. It further noted that on identical facts in assessee’s own case for AY 2018-19, the Department had itself dropped penalty proceedings, and therefore the principle of consistency also supported the assessee.
Relying upon the Hyderabad Tribunal decision in Subbalakshmamma Pinnama vs ITO, the Pune ITAT held that where the assessee offers a bona fide explanation, discloses all material facts, and the returned income is accepted by the Department, such income would fall within the protection of section 270A(6) and cannot be treated as “under-reported income.” Accordingly, the Tribunal directed deletion of the entire penalty.
FULL TEXT OF THE ORDER OF ITAT PUNE
