Penalty under section 270A fails where fully disclosed income is accepted and delayed filing is shown to be bona fide.

Penalty under section 270A is not justified where a return filed in response to section 148 is accepted without any addition or disallowance, the income is fully disclosed and verifiable, and no concealment, escapement, or tax evasion is shown. The Tribunal's discussion treats delayed filing by itself as insufficient for under-reporting when the assessee gives a bona fide explanation, supported by medical records, for the original non-filing. On those facts, the penalty was deleted because the assessed income matched the returned income and the default was found to be bona fide rather than culpable.

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Issues: Whether penalty under section 270A of the Income-tax Act, 1961 for under-reporting or misreporting of income was sustainable where the assessee filed the return only in response to notice under section 148, the assessed income was accepted without variation, and the assessee explained the default by accident, medical treatment, and the COVID-19 pandemic.

Analysis: The assessee's income was entirely salary income on which tax had been deducted at source, and the assessment was completed without any addition or disallowance. The material on record showed that the return filed in response to notice under section 148 was accepted as returned, and there was no escapement of income, concealment, or tax evasion. The assessee also produced medical records supporting the explanation that an accident and subsequent treatment, followed by the pandemic, prevented timely filing of the original return. The Tribunal treated the explanation as bona fide and followed the view that delayed filing by itself does not amount to under-reporting within the meaning of section 270A where the income is fully disclosed and verifiable.

Conclusion: Penalty under section 270A was not warranted and was deleted.

Final Conclusion: The assessee succeeded, and the penalty order was set aside on the footing that bona fide non-filing of the original return, in the absence of concealment or revenue loss, does not justify penalty for under-reporting.

Ratio Decidendi: Penalty under section 270A cannot be sustained merely because the return was first filed in response to notice under section 148, if the income is fully disclosed, accepted without variation, and the assessee establishes a bona fide explanation with no concealment or tax evasion.

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