The ITAT held that penalty under section 270A cannot be imposed...

The ITAT held that penalty under section 270A cannot be imposed solely because the return was filed in response to a notice under section 148. Mere delay in filing does not amount to under-reporting unless there is concealment or misrepresentation of income. The assessee's income was fully disclosed, supported by third-party documents, subjected to TDS, and accepted without adjustment by the AO. The authority must exercise discretion judiciously before levying penalty, considering the assessee's bona fide conduct and absence of tax evasion. Since there was no addition or disallowance, and no revenue loss or fraudulent intent was established, the penalty was not warranted. The failure to file return under section 139(1) alone does not constitute under-reporting under section 270A(2)(b). Consequently, the appeal was allowed and the penalty under section 270A was set aside.