Ratna Show Reddy Singareddy Vs DCIT (ITAT Hyderabad)
The appeal before the ITAT Hyderabad arose from an order of the Commissioner of Income Tax (Appeals) upholding a penalty levied under Section 270A(9) of the Income-tax Act, 1961 for alleged under-reporting of income resulting from misreporting. The assessee, an individual, had originally filed a return for Assessment Year 2020-21 declaring total income of Rs.22,42,400. Subsequently, a search and seizure operation conducted in March 2023 revealed that the assessee had sold immovable property for Rs.85,00,000 but had not offered capital gains to tax in the original return. Consequently, proceedings were initiated under Sections 147 and 148 of the Act. In response to the notice under Section 148, the assessee filed a return declaring total income of Rs.30,11,280, including short-term capital gains of Rs.7,90,475 arising from the property sale. The Assessing Officer accepted the returned income while completing the reassessment.
During penalty proceedings, the assessee explained that the property sold was dry agricultural land and that another agricultural land had been purchased from the sale proceeds. According to the assessee, there was a bona fide belief that the sale of agricultural land and purchase of another agricultural land did not attract tax. The assessee also pointed out that the capital gain had been disclosed and tax paid in the return filed pursuant to the notice under Section 148.
