Sachin Baban Shinde Vs ITO (ITAT Pune)
In a significant ruling for taxpayers, the Income Tax Appellate Tribunal (ITAT), Pune Bench, has set aside a penalty levied under Section 270A of the Income Tax Act, 1961, against Sachin Baban Shinde. The Tribunal held that a penalty for underreporting income cannot be imposed when the assessee, a salaried employee with a technical background, genuinely relied on a fraudulent tax consultant and voluntarily paid the due tax and interest even before receiving a formal notice from the Income Tax Department. The decision underscores the importance of assessing the assessee’s intent and knowledge in cases of misreporting.
Case Background and Allegations:
The case pertains to the assessment year 2018-19. Sachin Baban Shinde, a salaried individual, initially filed his income tax return (ITR) declaring a taxable income of Rs. 4,07,090/-. Subsequently, the Assessing Officer (AO) received information from the Income Tax Officer (Investigation), Nashik, indicating that Shinde had claimed excess deductions in his return. This led to the initiation of reassessment proceedings under Section 147 of the IT Act, with a notice under Section 148 being issued on February 25, 2020.
In response to the Section 148 notice, Shinde furnished a revised return on March 11, 2020, declaring a taxable income of Rs. 8,32,990/-. The assessment was completed under Section 147 on March 2, 2021, accepting the income declared in the revised return. However, the Assessing Officer later proceeded to impose a penalty of Rs. 1,46,760/- on September 12, 2021, under Section 270A(8) of the IT Act. This penalty was levied on the grounds of underreporting income “in consequence of misreporting.” The Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (CIT(A)/NFAC) subsequently upheld this penalty, leading Shinde to appeal before the ITAT.
