Abhishubham Bahadur Saxena Vs ITO (ITAT Jaipur)
Summary: ITAT Jaipur allowed the assessee’s appeal for AY 2018-19 and directed deletion of penalty of Rs.8,29,034/- levied under Section 270A of the Income Tax Act, 1961. The assessee had not originally filed his return under section 139. Based on departmental information showing salary income of Rs.26,05,964/-, proceedings were reopened under section 148. In response, the assessee filed his return declaring total income of Rs.20,49,700/-, which was accepted without variation in the reassessment. The AO nevertheless treated the income as underreported under section 270A(2)(b) and as misreporting through misrepresentation or suppression of facts under section 270A(9)(a).
Before examining the merits, the Tribunal dealt with a delay of 49 days in filing the appeal. The assessee explained that his PAN reflected Kanpur jurisdiction instead of Jaipur because of an outdated address. He had applied for correction of PAN particulars and transfer of jurisdiction, deposited the appeal fee within limitation and followed up with the Department. Relying upon Collector, Land Acquisition, Anantnag & Anr. v. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC), the Tribunal held that sufficient cause should receive liberal construction to advance substantial justice and condoned the delay.
On merits, the Tribunal noted that the statutory conditions for underreporting were otherwise attracted because the assessee had disclosed his income for the first time in the return filed in response to notice under section 148. It also recorded that the assessee had not demonstrated any infirmity in the lower authorities’ interpretation that suppression of facts brought the case within section 270A(9)(a). However, the Tribunal proceeded to examine the important exclusion contained in section 270A(6)(a), under which income otherwise qualifying as underreported income is excluded where the assessee furnishes a bona fide explanation and discloses all material facts substantiating it.
The assessee explained that he had relocated to the USA in August 2018 for employment with a multinational company. Because of the relocation, demanding schedule and lack of familiarity with the procedural requirements, he inadvertently failed to file the return. When he realised the omission in August 2019, the statutory window for filing a belated return under section 139(4), as applicable to AY 2018-19, had already closed. Significantly, he voluntarily deposited the tax along with applicable interest before initiation of departmental proceedings. The Tribunal also noted his assertion that he had been tax compliant and had filed returns within time in preceding years.
The chronology produced before the Tribunal showed that the assessee voluntarily paid self-assessment tax of Rs.1,62,410/- with interest and late fee under section 234F on 23.08.2019, whereas the reopening process commenced much later in March 2022. The Tribunal therefore found that the payment and compliance preceded the Department becoming aware of the non-filing.
The Tribunal held that the explanation was bona fide and supported by facts and evidence. Since section 270A(6) excluded such income from underreported income, the foundation for treating it as misreporting consequent to underreporting also disappeared. The lower authorities were therefore incorrect in rejecting the explanation. Consequently, the penalty of Rs.8,29,034/- was held unsustainable in law and directed to be deleted. The assessee’s appeal was allowed.
Cases Discussed
- Collector, Land Acquisition, Anantnag & Anr. v. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC) — relied upon for liberal construction of “sufficient cause” and preference for substantial justice while considering condonation of delay.
- Hindustan Steel Ltd. v. State of Orissa (83 ITR 26) — cited by the assessee in the grounds for the principle that penalty should not be imposed for a technical or venial breach without mala fide intention.
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT JAIPUR
The present appeal has been filed by the assessee against order passed by the National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as “Ld. CIT(A)”) dated 25.11.2025, confirming the levy of penalty for underreporting as a consequence of misreporting of income, as per Section 270A(9) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) .
2. The appeal is noted to be time barred by 49 days. Ld. Counsel for the assessee has filed an application seeking condonation of delay, the contents of which are reproduced hereunder:-
May it please your Honor’s
The humble assessee most respectfully begs to submit as under:
1. That in the aforesaid matter, the ld. CIT(A), NFAC passed the appellate order on dated 25.11.2025 against which appeal before this Hon’ble ITAT was required to be filed on or before 24.01.2026.
However the same could not be filed within the prescribed time due to genuine, bona fide and unavoidable circumstances beyond the control of the appellant and was ultimately filled on 21.03.2026 resulting in a delay of 56 days.
It is, however, respectfully submitted that the challan towards the filing fee of the appeal had already been deposited on 21.01.2026, i.e., well before the due date for filing the appeal, which clearly demonstrates the appellant’sbona fides and readiness to file the appeal within time; accordingly, the delay, if any, is merely technical and procedural in nature and not attributable to any wilful default, negligence or inaction on the part of the appellant.
2. Reasonable Cause Exist:
2.1 In this connection, We humbly submitted that The delay occurred due to a bona fide jurisdictional mismatch on the Income Tax Portal arising from an outdated PAN address, as a result of which the appellant’s case was wrongly reflecting under Kanpur instead of Jaipur. Immediately upon discovering the issue, the appellant got the PAN particulars corrected, applied for transfer of jurisdiction, deposited the appeal fee within limitation, and continuously followed up with the Department; however, the jurisdiction was changed only later. The appeal, therefore, could not be filed within time for reasons wholly beyond the control of the appellant, and the delay, if any, is merely technical and procedural.
2.2 That when my Authorised Representative(A/R) checked the Income Tax Portal on 08.01.2026 for filing of appeal before the Hon’ble ITAT, it was found that my address was not updated in the PAN database and the jurisdiction was wrongly reflecting under AO Circle 2(1)(1), Kanpur, whereas my permanent and correct address is at Jaipur.
2.3 That immediately on coming to know of the said discrepancy, my A/R instructed me to get the address updated in the PAN database and to take steps for correction of jurisdiction.
Accordingly, I applied for correction of PAN particulars on 08.01.2026 for updating my correct address.
2.4 That the updated/corrected address was reflected on the Income Tax Portal only on 18.01.2026. & on the very same day, i.e., 18.01.2026, I also applied for change/transfer of jurisdiction from AO Circle 2(1)(1), Kanpur to the jurisdictional Assessing Officer at Jaipur.
Since the jurisdiction continued to remain unchanged, a reminder email was also sent on 28.01.2026 expeditious change of jurisdiction.
2.5 That despite the above steps the jurisdiction was not changed on the portal then my A/R again sent an email on 08.03.2026 to the concerned Assessing Officer at Kanpur requesting change of jurisdiction.
Since the jurisdiction continued to remain unchanged, a reminder email was also sent on 16.03.2026 for expeditious change of jurisdiction by My A/г.
2.6 That the jurisdiction was ultimately changed only on 18.03.2026.
2.7 That with a bona fide intention to file the appeal within the prescribed limitation period, I also deposited the appeal fee on 21.01.2026, i.e., before the due date of filing appeal
2.8 That I had thus performed all acts which were within mycontrol, including applying for PAN correction, updating address, applying for transfer of jurisdiction and depositing the appeal fee within limitation, but the appeal could not be effectively filed earlier only because the jurisdictional correction on the portal remained pending at the departmental end.
2.9 That therefore, the delay, if any, is purely technical and procedural in nature and occurred due to circumstances beyond my control.
2.10 That the delay in filing the appeal was neither deliberate nor intentional, but was caused solely due to the aforesaid bona fide and unavoidable circumstances.
2.11 That immediately after the jurisdiction was corrected, steps were taken for filing the appeal without any further delay.
2.12 That We have a meritorious case on facts and law and we shall suffer irreparable loss and hardship, whereas no prejudice would be caused to the Revenue if the appeal is admitted and heard on merits.
2.13 That this petition is being made in good faith and there is no intention to delay the process of justice.
3. Supporting Case Laws:
It is submitted that the Hon’ble Supreme Court in the case of Collector, Land & Acquisition vs. Mst. Katiji& Others (1987) 167 ITR 471 (SC) has advocated for a very liberal approach while considering a case for condonation of delay. The following observations of the Hon’ble court are notable:
“The legislature has conferred the power to condone delay by enacting section 5 of the Limitation Act, 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on merits. The expression sufficient cause employed by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner which sub serves the ends of justice-that being the life-purpose of the existence of the institution of Courts. It is common knowledge that this Court has been making a justifiably liberal approach in matters instituted in this Court. But, the message does not appear to have percolated down to all the other Courts in the hierarchy.”
Prayer: It is, therefore, humbly prayed that this application may kindly be allowed by condoning the delay, taking a sympathetic view, in the interest of justice.
Any other order, which this Hon’ble ITAT deems fit and proper, be also passed in favour of applicant assessee.
3. Ld. Counsel for the assessee contended that the delay of 49 days is neither deliberate nor intentional; that the assessee had acted bona fide and with due diligence immediately upon acquiring knowledge of the order passed by the learned Commissioner of Income Tax (Appeals);that the delay occurred due to a bona fide jurisdictional mismatch on the Income Tax Portal arising from an outdated PAN address, as a result of which the assessee’s case was wrongly reflecting under Kanpur instead of Jaipur. Immediately upon discovering the issue, the assessee got the PAN particulars corrected, applied for transfer of jurisdiction, deposited the appeal fee within limitation, and continuously followed up with the Department; however, the jurisdiction was changed only later. The appeal, therefore, could not be filed within time for reasons wholly beyond the control of the appellant, and the delay, if any, is merely technical and procedural.That immediately upon becoming aware of the order, the assessee took prompt steps to file the present appeal without any further delay.
4. Ld. DR, on the other hand, vehemently opposed the condonation of delay contending that the reason brought out by the assessee reflected laxity on his part in pursuing the remedy of filing appeal and therefore the delay ought not to be condoned.
5. Having heard both the parties, we find the cause for the delay in 49 days of the filing of the present appeal before us being attributed to correcting the jurisdictional mismatch on the Income Tax Portal of the PAN details of the assessee so as to enable filing appeal before us in the correct jurisdiction. That as per the PAN details on the portal of the assessee, the jurisdiction was shown in Kanpur, while the assessee for the past several years was filing returns and subjecting itself to the jurisdiction of the Jaipur Assessing Officer.
6. The law governing condonation of delay is now well settled. The Hon’ble Supreme Court in Collector, Land Acquisition, Anantnag &Anr. v. Mst. Katiji&Ors.(1987) 167 ITR 471 (SC) laid down that the expression “sufficient cause” occurring in the Limitation Act should receive a liberal construction so as to advance substantial justice. The Court held that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. The Court further observed that there is no presumption that delay is deliberate or occasioned on account of culpable negligence or mala fides and that ordinarily a litigant does not stand to benefit by lodging an appeal belatedly.
7. Accordingly, noting the assessee to have adduced sufficient cause and further in the interest of justice the delay of 49 days in filing the present appeal is condoned. The appeal is admitted for adjudication on merits. Ordered accordingly.
8. The grounds raised by the assessee read as under:-
Ground No. 1
That on the facts and in the circumstances of the case and in law, The Ld. CIT(A) has erred in confirming the penalty levied under section 270A of the Act, which is bad in law, invalid, and liable to be quashed, as the appellant’s case does not fall within any of the circumstances specified under section 270A(9). The mere non-filing of return within original due date, followed by filing of return in response to notice under section 148, where the total income declared is accepted without variation does not ipso facto constitute misrepresentation or suppression of facts. Consequently, the initiation and levy of penalty under section 270A(9) are contrary to law and unsustainable.
Ground No 2
That on the facts and in the circumstances of the case and in law The Ld. CIT(A) has erred in not appreciating that the appellant had bona fide and reasonable cause for the initial non filling of return, as explained and had voluntarily paid the entire tax liability along with applicable interest & late fee as prescribed under section 234F much prior to initiation of reassessment proceedings. Such conduct clearly establishes bona fides and absence of any contumacious or dishonest intention to evade tax, thereby attracting the beneficial provision of Section 270A(6) and Section 270AA of the Act.
Ground No. 3:
That on the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in confirming the penalty without appreciating that the assessment proceedings for AY 2018-19, and consequently the penalty proceedings, could not have been validly conducted under the Faceless Assessment Scheme (Section 144B) of the Act, as the said provisions were not applicable for the Assessment Year 2018-19. The entire proceedings, being without jurisdiction, are null and void.
Ground No.4
That on the facts and in the circumstances of the case and in law, The Ld. CIT(A) has erred in not appreciating that the penalty order is invalid and without jurisdiction because the notice of demand under section 156 was digitally signed at 19:38 hrs on June 25, 2025, whereas the penalty order itself was signed later at 20:25 hrs on the same day. Issuing a demand notice before passing the penalty order is a fundamental procedural error, vitiating the penalty order in law.
Ground No. 5
That on the facts and in the circumstances of the case and in law, The Ld. CIT(A) has erred in not granting immunity from penalty under section 270AA of the Act, as the appellant’s case, being one of the bona fide disclosure and not misreporting, ought to have been considered for such immunity.
Ground No 6
That on the facts and in the circumstances of the case and in law, The Ld. CIT(A) has erred in not appreciating the facts that the levy of penalty is contrary to settled judicial principles, including the Supreme Court ruling in Hindustan Steel Ltd. v. State of Orissa (83 ITR 26), which states that penalty should not be imposed for a technical or venial breach without mala fide intention; in the present case, there is neither loss to Revenue nor any act of concealment.
Ground No. 7
The appellant prays for leave to add, to amend, to delete, or modify the all or any grounds of appeal on or before the hearing of appeal.
9. Brief facts relating to the levy of penalty in the present case are that the assessee had not filed his return of income originally u/s 139 of the Act. However, as per the information available with the Department, the assessee had received salary income of Rs.26,05,964/-. Accordingly, the case of the assessee was reopened vide notice issued u/s 148 of the Act. In response to notice issued u/s 148, the assessee filed return declaring total income of Rs.20,49,700/-. The income returned by the assessee was accepted, in the order passed u/s 147 of the Act. Thereafter, penalty proceedings u/s 270A(9) of the Act were initiated for underreporting as a consequence of misreporting of income for the difference of the incomereturned in response to notice u/s 148 of the Act and that in the original return filed u/s 139 of the Act. The assessee in response to the same submitted that, he had missed to file his return on time due to his relocation to the USA and that he had paid all tax while filing his return in response to notice u/s 148 and that therefore no penalty may be levied upon him. The AO however held that as per the extant provisions of Section 270A of the Act, the assessee had underreported his income since the income assessed of the assessee was greater than the maximum amount not chargeable to tax in the return furnished by the assessee for the first time u/s 148 of the Act, and the underreported income qualified as “misreporting as a consequence of underreporting” since the assessee had misrepresented or suppressed facts in terms of Section 270A(9) (a) of the Act. The Ld. CIT(A) upheld the order of the AO.
10. We have heard both the parties and have gone through the orders of the Authorities below. The assessee we find has been stated to have underreported his income as a consequence of misreporting by virtue of Section 270A sub-section (2) clause (b) r.w.s. 270A sub-section (9) clause (a) of the Act. As per the authorities below the assessee’s case qualifies for underreporting of income as per Section 270A(2)(b) of the Act which is reproduced in the order of the AO as under:-
……..
Penalty for under-reporting and misreporting of income.
270A………..
(2) A person shall be considered to have under-reported his income, if—
(a) ……….
(b) the income assessed is greater than the maximum amount not chargeable to tax, where no return of income has been furnished or where return has been furnished for the first time under section 148;
…………
11. The case of the Revenue is that the assessee had not filed return u/s 139 of the Act and had responded to notice u/s 148 of the Act by filing return of income for the first time on 18.04.2022 declaring total income of Rs.20,49,700/-. Thus, the income disclosed for the first time in the return filed in response to notice u/s 148 of the Act of Rs.20,49,700/- qualified as underreported income as per Section 270A sub-section (2) sub-clause (b) of the Act, as per which a person is considered to have underreported his income if the income assessed is greater than the maximum amount not chargeable to tax, where return has been furnished for the first time u/s 148 of the Act.
12. The Revenue Authorities have further noted the assessee’s case to qualify as misreporting of income in terms of Section 270A(9)(a) of the Act which lists the misrepresentation or suppression of the facts as qualifying for misreporting of income. The relevant provisions of Section 270A(9)(a) of the Act are reproduced in the assessment order as under:-
……..
Penalty for under-reporting and misreporting of income.
270A………..
(9) The cases of misreporting of income referred to in sub-section (8) shall be the following, namely:—
(a) misrepresentation or suppression of facts;
………..
13. The assessee has been unable to demonstrate before us any infirmity in the findings of the Authorities below in interpreting the provisions of Section 270A of the Act in the facts of the present case to hold that the assessees case qualified as underreporting of income, for having disclosed his income for the first time only in the return filed in response to notice u/s 148 of the Act , and as misreporting of income on account of suppression of facts.
14. Having noted so, we however note that as per Section 270A(6) of the Act as per which an income otherwise qualifying as underreported income, would not be treated as underreported income if the assessee furnishes a bona fide explanation for the underreporting of income, disclosing all material facts to substantiate the explanation offered. The relevant provisions of Section 270A(6) sub-clause (a) of the Act are reproduced hereunder:-
……..
Penalty for under-reporting and misreporting of income.
270A………..
(6) The under-reported income, for the purposes of this section, shall not include the following, namely:—
(a) the amount of income in respect of which the assessee offers an explanation and the Assessing Officer or the Joint Commissioner (Appeals) or the Commissioner (Appeals) or the Commissioner or the Principal Commissioner, as the case may be, is satisfied that the explanation is bona fide and the assessee has disclosed all the material facts to substantiate the explanation offered;
…………
15. In the facts of the present case, we have noted the assesseeto have furnished explanation for having not filed his return originally u/s 139 of the Act. The same is reproduced in para 4 of the AOs order as under:-
The submission made by the assessee is perused. The assessee informed that he relocated to the US in August 2018 and stated to have paid all the taxes voluntarily in August 2019. However, since the window to file belated return had closed by that time, he could not file his return of income. Further, the assessee submitted that he was unaware of the specific procedures and timelines for filing returns, particularly the provisions allowing for belated filing under Section 139(4). This was an unintentional oversight, as he had limited experience with the complexities of tax compliance, especially while transitioning to a new professional and personal environment abroad.
16. Ld. Counsel for the assessee drew our attention to the submissions made by the assessee to the AO during penalty proceedings explaining his failure to file return of income originally u/s 139(1) of the Act by way of a communication dated 15.02.2023 placed before us at paper book page No.47, the contents of which are as under:-
with reference to the above mentioned subject, I am in receipt of show cause notice under section 270A vide your letter dated 15/02/2023 wherein you good self have issued show cause notice that why an order imposing penalty u/s 270A of Income Tax Act 191 should not be passed
In this regard sir we are submitting the following facts.
Reason to levy penalty as prescribe in study material on official website of income tax department is reproduced as follows
“Many times, a taxpayer may try to reduce his tax liability by underreporting or misreporting of income. In such a case, by virtue of Section 270A, the taxpayer will be held liable for penalty “
In our case no tax liability was reduced but we have deposited all due tax liabilities with applicable Interest suo-motu to department before the commencement of any proceeding under this Act.
In law there was no provision exist to report the income if assesse failed to report income till 31st March 2019 for AY 2018-19 by virtue of Finance Act 2016
In our case in the year 2018 We got opportunity to join multinational company in USA for the purpose of employment, that was great opportunity for us and we also feel that it was also a good opportunity to make a small contribution in nation’s economy.
I moved to USA in August 2018 for my New employment. Due to hectic schedule to join new company I forgot to file my return of Income for AY 2018-19 but when I realized ie, in Aug 2019 1 have no option to report the income to Income tax department, so to show the honesty with nation and in compliance of law I deposited all the taxes with interest and penalty before start of any proceeding under any law.
In addition to above point’s, I would also like to state that I always paid taxes in full cognizance and always filed them before due date under section 139(1).
With this, I hope that I have explained to your honour that the penalty proceeding under section 270A should be dropped in my case. If Your honour requires any further information or explanation, I will be grateful to provide the same. If your honour notices any deficiency or mistake in the information given, kindly give an opportunity to correct the same.
17. He also drew our attention to the reiteration of his pleadings as above to the AO vide the communication dated 26.05.2025 placed before us at paper book page No.52 to 56, the contents of which are as under:-
Reason for Non-Filing of Original Return:
In August 2018, I relocated to the United States to join a multinational company, which was a significant professional opportunity. This move required considerable time and effort to settle into a new country, adapt to a demanding work schedule, and comply with international employment regulations.
Due to my relocation and the demanding schedule of settling into a new country, coupled with my lack of familiarity with the procedural requirements for filing an income tax return in India at that time, I inadvertently missed filing the return by the due date.
At the time, I was unaware of the specific procedures and timelines for filing returns, particularly the provisions allowing for belated filing under Section 139(4). This was an unintentional oversight, as I had limited experience with the complexities of tax compliance, especially while transitioning to a new professional and personal environment abroad.
Upon realizing this oversight in August 2019, I found that the window to file a belated return under Section 139(4) had closed, as per the provisions of the Finance Act, 2016, which set the deadline for belated returns as the end of the relevant assessment year (31/03/2019 for A.Y. 2018-19).
To uphold my commitment to tax compliance and contribute to the nation’s economy, I voluntarily deposited all due taxes along with applicable interest before the initiation of any proceedings under the Act, demonstrating my bona fide intent and honesty.
18. It is evident from the above, that the assessee had furnished a bona fide explanation for not having furnished his return originally u/s 139(1) of the Act explaining that he had left the Country to join a multinational company in USA for the purpose of employment and due to his relocation and demanding schedule of settling into a new country in August 2018, he forgot to file his return for the impugned year and by the time he realized his mistake in August 2019 he had no option to file the revised return. Being honest and law abiding however he paid all taxes along with interest before the initiation of any proceedings under any law.
19. Ld. Counsel for the assessee submitted a detail giving chronology of events relating to the filing of return to the payment of tax by the assessee, which is reproduced in his written submissions as under:-
| Date | Particulars |
|---|---|
| 31.08.2018 | Due date (as extended) for filing return u/s 139(1) for A.Y. 2018-19 |
| 31.03.2019 | Window for belated return u/s 139(4) closed (Finance Act, 2016 amendment) |
| 23.08.2019 | Appellant voluntarily paid self-assessment tax of Rs. 1,62,410/- with interest and late fee u/s 234F — suo motu, before any notice |
| 16.03.2022 | Show Cause Notice issued u/s 148A(b) |
| 24.03.2022 | Reply filed to notice u/s 148A(b) with computation, Form 16 and further tax of Rs. 3,710/- |
—
| Date | Particulars |
|---|---|
| 30.03.2022 | Notice issued u/s 148 |
| 18.04.2022 | Return filed in response to notice u/s 148, declaring Rs. 20,49,700/- |
| 15.02.2023 | Assessment order passed u/s 147 r.w.s. 144B, accepting returned income without variation; first penalty Show Cause Notice u/s 274/270A issued same day |
| 25.06.2025 | Penalty order passed u/s 270A(9) (Rs. 8,29,034/-); Notice of Demand u/s 156 issued same day |
| 25.11.2025 | Order passed by Ld. CIT(A)/NFAC dismissing appeal and confirming penalty |
| 21.03.2026 | Present appeal e-filed before this Hon’ble Tribunal, with condonation application for 56 days’ delay |
20. Referring to the same, he pointed out that the assessee though was required to file his return by 31st of August 2018 and was unable to do so because of his relocation to the US, had however paid self-assessment tax with interest and late fee u/s 234F on the 23rd of August 2019 before any notice was issued to him by the Department; that the notice for reopening the case of the assessee was issued only much thereafter on the 16th of March 2022.
21. The AO we have noted has rejected this explanation of the assessee as insufficient for not levying penalty on the assessee. However, we hold that the assessee had a bona fide explanation for not having furnished his return of income u/s 139(1) of the Act. The assessee we have noted had demonstrated the fact that he was a tax compliant assessee always having filed his return of income in time in the preceding years. That he had failed to file return of income in the impugned year only on account of his relocation to US for taking up employment there and by the time he became aware he had no recourse left in law to file any return of income even by way of a belated return. That however, he as law abiding citizen had deposited all tax and interest on his income earned and had even paid penalty for not having filed his return of income. That all this was complied with by the assessee much before the Department became aware of the fact that the assessee had not filed any return of income for the impugned year despite having earned income during the year. The assessee’s explanation is clearly a bona fide explanation duly substantiated with facts and evidences .Accordingly we hold that the assessee is eligible for the benefit of Section 270A sub-section (6) ,for being absolved from being charged to have underreported his income.
22. The orders of the Authorities below holding that the explanation furnished by the assessee was not bona fide, we hold is incorrect.
23. In view of the above, we hold, that since the assessee had a bona fide explanation for the underreported income, the same does not qualify as underreported income and since the same does not qualify as underreporting income there is no question of any misreporting of income as a consequence of underreporting of income. The penalty levied in the facts of the present case, we hold is therefore not sustainable in law. We accordingly direct, the penalty levied of Rs.8,29,034/- to be deleted.
24. In effect, the appeal of the assessee is allowed.
Order pronounced in the Open Court on 17.08.2026.
