Tribunal partially grants appeal, deletes penalty for unintentional underreporting of interest on tax refund.

The Tribunal partially allowed the appeal, deleting the penalty under section 270A as the interest on income tax refund was not intentionally underreported. Grounds 1 and 2 were dismissed, and ground 3 was allowed.

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Issues Involved:
The judgment involves the issue of condonation of delay in filing the appeal and the levy of penalty under section 270A of the Income Tax Act, 1961.

Condonation of Delay:
The appellant filed an appeal challenging an order passed under section 250 of the Act, which arose from a penalty order under section 270A for the assessment year 2017-18. The appeal was filed 28 days late due to a search operation causing immense pressure and oversight of the impugned order. The Tribunal, considering the reasons for delay, granted condonation as per established principles of substantial justice prevailing over technicalities, finding sufficient cause for the delay.

Grounds Raised by Assessee:
The appellant raised several grounds challenging the penalty under section 270A. The grounds included failure to follow principles of natural justice, lack of virtual hearing, and disputing the underreporting of income leading to the penalty imposition. The appellant contended that the interest on income tax refund was not underreported intentionally, as the refund was contingent and not actually received during the year in question.

Assessment and Penalty Imposition:
The AO levied a penalty under section 270A based on a difference between the income returned and assessed, specifically focusing on interest income on tax refund not initially declared. The CIT(A) dismissed the appeal ex-parte, leading to the current appeal. The Tribunal found that the appellant, during limited scrutiny, voluntarily offered the interest income during assessment proceedings based on Form 26AS, without prior knowledge or receipt of the refund amount. The Tribunal concluded that the non-declaration of interest was not intentional underreporting, directing the AO to delete the penalty imposed under section 270A.

Conclusion:
The Tribunal partially allowed the appeal, deleting the penalty under section 270A, as the interest on income tax refund was not intentionally underreported. Grounds 1 and 2 were dismissed as not pressed, while ground 3 was allowed. The judgment was pronounced on 14/09/2023.

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