TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1755
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....n 139(1) of the Act for A.Y. 2018-19. Based on information received through the Annual Information Return and Form 26AS, indicating salary income credited and TDS deducted, the Assessing Officer reopened the case by issuing a notice under section 148 of the Act on 29.03.2022. In response to the said notice, the assessee filed his return of income on 03.08.2022, declaring total income of Rs. 20,70,160/-. The assessment was completed under section 147 read with section 144B of the Act by the National Faceless Assessment Centre, Delhi [hereinafter referred to as "Assessing Officer or AO"], vide order dated 11.03.2023, accepting the returned income in toto, without making any variation or disallowance. 2. Subsequently, the Assessing Officer initiated penalty proceedings under section 270A of the Act by issuance of notice dated 11.03.2023. In response, the assessee submitted that there was no concealment or misreporting of income, and that the omission to file the return under section 139(1) was entirely inadvertent and unintentional, attributable to lack of professional advice and misunderstanding regarding tax compliance, since full TDS had already been deducted. However, not satisfi....
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....nder section 139 and had filed the return only after issuance of notice under section 148, and since the income exceeded the maximum amount not chargeable to tax, the conditions for invoking section 270A(2)(b) were satisfied. 4. The assessee is now in appeal before us raising following sole ground: Whether, on facts and in circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the penalty of Rs.2,23,277/- levied under section 270A of the Act? 5. The learned Authorised Representative (AR) for the assessee reiterated the factual background and submitted that the assessee was a salaried individual working with M/s Tech Mahindra Ltd. during the relevant previous year, and the entire income earned by him was fully subjected to tax deduction at source by the employer. The relevant salary details and TDS thereon were duly reflected in Form 26AS, which was available with the Department at all material times. He pointed out that there was no attempt to suppress income or evade tax, and the omission to file return under section 139(1) was an inadvertent and bona fide lapse arising out of a misunderstanding of compliance obligations, particularly because the entire t....
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....tmental Representative (DR) vehemently supported the orders of the Assessing Officer as well as the Ld. CIT(A), NFAC, and submitted that the levy of penalty under section 270A was strictly in accordance with law. The DR submitted that the assessee had failed to file the return of income within the time prescribed under section 139(1), despite the fact that his total income exceeded the maximum amount not chargeable to tax. It was only upon issuance of notice under section 148 that the assessee filed his return of income. Thus, the return was filed only after detection by the Department, and therefore, the condition stipulated in clause (b) of sub-section (2) of section 270A stood satisfied. The DR argued that section 270A(2)(b) clearly provides that under-reported income includes the case where no return of income has been furnished and income assessed is above the basic exemption limit. Accordingly, the DR prayed that the appeal of the assessee deserves to be dismissed, and the penalty as confirmed by the Ld. CIT(A) may be upheld. 11. We have carefully considered the rival submissions, examined the entire factual record, and perused the authorities cited before us. It is undisput....
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....t, and supporting documents to determine whether the omission was bona fide or contumacious. When income is fully subjected to TDS and reflected in the tax system, and the assessee does not claim any false deduction or exemption, the possibility of tax evasion is inherently neutralised. In such cases, penal consequences are not justified in the absence of revenue loss or fraudulent intent. 13. At this juncture we consider the decision of Co-ordinate Bench in case of Archana Achyut Sail Vs. ITA (supra) where the Bench noted that if there was no disallowance or addition made by the Assessing Officer in the income as disclosed in pursuance of notice under Section 148 of the Act, no penalty can be levied under Section 271(1)(c) of the Act. The relevant paras are reproduced here for the sake of clarity - 11. Insofar as ITA No. 5278/Mum/2024 (assessment year 2016-17) is concerned, reliance is placed on behalf of the appellant on the decision of this Tribunal in Haresh Ghanshyamdas Makhija vs ITO [2024] 206 ITD 149 (Mumbai-Trib.) and the decision of Calcutta High Court in Commissioner of Income Tax, Central-III, Kolkata vs Brijendra Gupta [2015] 234 Taxman 51 (Calcutta) in order to sub....