Rohit Khandelwal Vs AC/DCIT (ITAT Kolkata)
No Penalty Under Section 271AAC Would Be Imposed When the Income under Section 68 to 69D Has Been Included in The Return and Return Has Been Filed within timeframe allowed Under Section 139(1) or Section 139(4).
In the case of Rohit Khandelwal vs. AC/DCIT (ITAT Kolkata), the dispute centered around the imposition of a penalty under Section 271AAC of the Income Tax Act, 1961. The assessee, Rohit Khandelwal, filed an appeal against the order of the CIT(A), Patna-3, which upheld the penalty imposed by the Assessing Officer (AO) for the Assessment Year 2021-22. The issue arose when authorities seized a cash amount of ₹1,11,05,650 during vehicle checks amid the Bihar Assembly Elections 2020. The assessee later disclosed this amount in his income tax return filed on February 20, 2022, and paid tax under Section 115BBE. However, since the return was submitted following a notice under Section 142(1) issued on January 25, 2022, the AO levied a penalty under Section 271AAC(1). The assessee argued that as per the proviso to Section 271AAC(1), no penalty should apply if income under Sections 68 to 69D was disclosed in the return and tax was duly paid, regardless of whether the return was filed under Section 139(1) or 139(4). The CIT(A), however, upheld the penalty, contending that the return was filed only in response to the Section 142(1) notice.
