2025 (11) TMI 1251

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....me Tax Act 1961 for the assessment year 2020 21. The assessee is aggrieved by the levy of penalty amounting to Rs. 84,55,809 which has been fastened upon it on the allegation of under reporting of income. 2. In order to appreciate the controversy in its proper perspective it is necessary to set out the factual narrative briefly yet clearly for the basis of the penalty lies entirely in the sequence of disclosures made by the assessee its statutory reliance on Form 26AS as a non resident and the bona fide explanations consistently furnished in the assessment and penalty proceedings. Once these facts are viewed in their proper chronological setting the assessee's explanation and the application of the statutory provisions can be examined wi....

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....overed that additional entries of interest income particularly those relating to Bharti Airtel Limited amounting to Rs. 11,43,93,861 on a grossed up basis were now reflected though they were absent in the earlier version at the time of filing the return. The assessee also noticed that the TDS of Rs. 23,44,779 relating to Greatship India Ltd had inadvertently not been grossed up earlier. These changes were entirely due to later updates in Form 26AS and were clearly beyond the assessee's knowledge or control. 6. Since the time for filing a revised return under section 139(5) had already expired the assessee voluntarily furnished a revised computation of income on 21 October 2021 prior to any issuance of notice under section 142(1). In this....

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....nder reported income for the purposes of this section shall not include the following namely (a) the amount of income in respect of which the assessee offers an explanation and the Assessing Officer or the Commissioner Appeals is satisfied that the explanation is bona fide and the assessee has disclosed all the material facts to substantiate the explanation offered." This provision is not a discretionary relief but a legislative exclusion. Once its conditions are met the income is statutorily removed from the ambit of under reporting and the foundation for penalty disappears. 10. Applying the statutory test each requirement of section 270A(6)(a) stands clearly satisfied. The assessee has offered a full and cogent explanation ....