Bona fide delay in filing return can fall outside under-reporting penalty where explanation and records support the taxpayer's case.

Penalty under section 270A for under-reporting of income was considered in the context of a delayed return caused by Covid-19-related illness and difficulty in uploading the return. The assessee's explanation was found bona fide and supported by material facts, including a consistent return-filing history, verification of the claims against available records, acceptance of the returned income in assessment, and substantial discharge of tax through TDS. On these facts, the case was treated as falling within section 270A(6)(a), which excludes such income from the scope of under-reporting, and the penalty was deleted.

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Issues: Whether penalty for under-reporting of income under section 270A of the Income-tax Act, 1961 was leviable where the assessee did not file the return within time due to Covid-19 related difficulty, but the return filed in response to notice under section 148 was accepted in assessment and the tax liability was substantially covered by TDS.

Analysis: The assessee had a consistent history of filing returns and, for the relevant year, explained the failure to file within time as arising from Covid-19 related illness affecting the assessee and family members, followed by unsuccessful attempts to upload the return. The assessment order recorded that the assessee's claims were verified against available records and found satisfactory. The returned income was accepted, and the tax burden was largely discharged through TDS. On these facts, the explanation was held to be bona fide and supported by material facts, bringing the case within section 270A(6)(a), which excludes such income from the ambit of under-reporting.

Conclusion: Penalty under section 270A of the Income-tax Act, 1961 was not leviable and was deleted.

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