Karimnagar District Cooperative Central Bank Limited Vs ITO (ITAT Hyderabad)
The case involves Karimnagar District Cooperative Central Bank Ltd. (DCCB) appealing against the penalty levied under Section 270A of the Income Tax Act for the assessment year 2018-19. Initially, the bank had declared an income of ₹9.50 crore and paid the necessary taxes. However, during the assessment, it realized an excess gratuity provision of ₹16.19 lakh, which was voluntarily offered for taxation. The assessing officer accepted the addition and later imposed a penalty of ₹5.60 lakh, rejecting the bank’s request for immunity under Section 270AA. The bank contended that it had complied with all statutory conditions, including paying the tax demand of ₹9.94 lakh within one month. However, the Commissioner of Income Tax (Appeals) dismissed the appeal, citing the failure to upload tax payment details on time.
Upon appeal, ITAT Hyderabad reviewed the evidence, noting that the bank had indeed paid the required tax within the stipulated period. Referring to a prior judgment (Punam Kumar Bhati Vs. ITO), ITAT ruled that a delay in submitting the physical proof of tax payment should not lead to a denial of immunity under Section 270AA(3). Consequently, the tribunal allowed the appeal, setting aside the penalty order. This ruling reinforces the principle that procedural lapses should not override substantive compliance when taxpayers fulfill their legal obligations in good faith.
