Case Law Details
Parulben Vijaykumar Patel Vs ITO (ITAT Ahmedabad)
In the case of Parulben Vijaykumar Patel vs. ITO, the appeal was brought by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals) for Assessment Year 2017-18. The primary issue revolved around the imposition of penalties under Section 270A of the Income Tax Act, 1961, specifically concerning the classification of the offense as either “under-reporting” or “misreporting” of income.
The facts of the case outlined that the Assessee, an individual, had initially not filed an income tax return under Section 139 of the Act for the relevant assessment year. Subsequently, after the Income Tax Department initiated proceedings under Section 148 (reopening of assessment), the Assessee filed a return declaring a total income of Rs. 27,85,060. During the assessment, it was found that the Assessee had not reported capital gains amounting to Rs. 22,20,156 from the sale of property.
The Assessing Officer (AO) initiated penalty proceedings under Section 270A for “misreporting of income,” levying a penalty at 200% of the tax payable on the under-reported income. The penalty was upheld by the Ld. Commissioner of Income Tax (Appeals), leading to the Assessee’s appeal before the ITAT Ahmedabad.
In defense, the Assessee argued before the ITAT that the non-disclosure of income from capital gains was not intentional misreporting but a bona fide belief that since TDS (Tax Deducted at Source) had been deducted by the property buyer under Section 194-IA, there was no further requirement to file a return of income. The Assessee contended that all relevant details were correctly reflected in Form No. 26AS, available on the Income Tax Department’s portal, thereby indicating transparency to the Department about the transaction.
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