Non-Payment Under IDS Makes U/s 271AAC Penalty Inevitable

Nandu Atmaram Wajekar Vs ACIT (ITAT Pune)

IDS Default Comes Back to Bite: ITAT Pune Upholds ₹69.54 L Penalty u/s 271AAC

Declare, But Don’t Pay? IDS Shield Lost, 271AAC Penalty Sustained

In Nandu Atmaram Wajekar vs. ACIT, Panvel (ITA No.67/PUN/2025, AY 2017-18; order dated 29-12-2025), the Pune Bench “A” of ITAT dismissed the Assessee’s appeal and upheld penalty of ₹69,54,070 levied u/s 271AAC(1) of the Income-tax Act. The Assessee had declared undisclosed income of ₹11.59 crore under Income Declar

ation Scheme (IDS), 2016, but failed to pay tax, surcharge & penalty within the prescribed time u/s 187(1) of the Finance Act, 2016, rendering the declaration invalid. Consequently, the declaration was cancelled and the income was brought to tax u/s 69A and taxed u/s 115BBE.

During assessment as well as penalty proceedings, despite repeated opportunities, the Assessee remained non-compliant and did not furnish any explanation or evidence. The AO levied penalty at 10% of tax payable u/s 115BBE, invoking section 271AAC(1). The Ld. CIT(A)/NFAC upheld both the quantum addition and the penalty, rejecting additional evidence for non-fulfilment of Rule 46A conditions.

Before the Tribunal also, there was no appearance on behalf of the Assessee, despite multiple listings. The ITAT noted that the Ld. CIT(A)/NFAC had passed a detailed and reasoned order and, in absence of any material to take a contrary view, held that penalty u/s 271AAC(1) was rightly levied. Accordingly, the appeal was dismissed.

FULL TEXT OF THE ORDER OF ITAT PUNE