Penalty under section 270A deleted where income was originally disclosed and revision stemmed from a bona fide exemption mistake.

Penalty under section 270A was found unsustainable where the assessee had originally disclosed the VRS-related income, the figures matched the TDS record, and the revised return was filed under a bona fide mistaken belief of exemption; on those facts, the elements of misreporting or concealment were not established, so the penalty was deleted. Immunity under section 270AA was also granted because Form 68 had been filed, no appeal was pursued against the assessment order, and the record supported a bona fide disclosure rather than a case for denying statutory relief.

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Issues: (i) Whether penalty under section 270A of the Income-tax Act, 1961 was sustainable on the facts of the case; (ii) Whether the assessee was entitled to immunity under section 270AA of the Income-tax Act, 1961 on filing Form 68 and satisfying the statutory conditions.

Issue (i): Whether penalty under section 270A of the Income-tax Act, 1961 was sustainable on the facts of the case.

Analysis: The assessee had originally declared the VRS-related income, which matched the employer's TDS record, and later revised the return under a mistaken belief that the amount was exempt. The revised position was accepted during assessment, and the factual matrix showed no intention to conceal income or cause loss to the Revenue. On these peculiar facts, the case did not disclose the elements necessary for misreporting or a penal consequence under section 270A.

Conclusion: The penalty under section 270A was not sustainable and was deleted in favour of the assessee.

Issue (ii): Whether the assessee was entitled to immunity under section 270AA of the Income-tax Act, 1961 on filing Form 68 and satisfying the statutory conditions.

Analysis: The assessee had filed Form 68 and had not pursued an appeal against the assessment order. The material on record indicated that the revised return arose from a bona fide misconception, and the assessee had already disclosed the relevant income in the original return. In these circumstances, the statutory basis for denying immunity was not made out on the facts found by the Tribunal.

Conclusion: The assessee was entitled to the benefit of immunity from penalty.

Final Conclusion: The Tribunal accepted the assessee's explanation, held that the penal action was unwarranted on the peculiar facts, and granted relief by allowing the appeal.

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