TaxTMI 
TaxTMI 
2026 (10) TMI 46
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....mployee at the relevant point in time. For assessment year 2020-21, the assessee did not file his original return of income. The omission was purely unintentional and caused by severe personal and professional hardships during the period, including ongoing divorce proceedings causing mental distress, the onset of the COVID-19 pandemic affecting his family and the loss of his job in May 2020. The case of the assessee was reopened under Section 148 of the Act. The reassessment was initiated based on information available with the department that the assessee had received salary income aggregating to Rs 30,90,717, but no return of income has been filed by the assessee. The assessee on receipt of the notice under Section 148 of the Act fully cooperated and promptly filed his return of income on 31-05-2024 declaring total income of Rs 20,97,890 and paid the due taxes thereon with applicable interest. The entire salary income received by the assessee was already subjected to tax deducted at source by his employers, which was already reflected in Form 24-Q and reflected in assessee's Form 26AS. The assessment proceedings were completed under Section 147 r.w.s. 144B of the Act on 15-01-202....
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....e Assessing Officer accepted the return of income at Rs. 30,22,900/-. However, he initiated penalty proceedings u/s 270A of the Act for under-reporting of income as no return of income was filed u/s 139(1) of the Act. 4. During the course of such penalty proceedings, the assessee filed a detailed reply submitting that the penalty u/s 270A of the Act should not be levied as he was under bonafide belief that since both the employers had deducted the tax, thus his tax obligations were duly discharged. However, the Assessing Officer rejected the contention of the assessee and levied the penalty of Rs. 3,74,072/- being 50% of the tax on concealed income by holding that the assessee has under reported his income to the extent of Rs. 2 30,22,900/- i.e. the income which was declared in the return filed in response to notice u/s 148 and no return was filed u/s 139 of the Act. 5. Against the said order, assessee filed an appeal before Ld. CIT(A) wherein it was claimed by the assessee that the income declared was accepted and as such there was no concealed income. However, ld. CIT(A) has not accepted the contentions of the assessee and dismissed the appeal of the assessee. ....
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....s, or evasion of tax. The entire income was voluntarily disclosed and taxes were already deducted at source. 6. Natural Justice and Fairness: Levying a penalty in this situation would amount to punishing a genuine taxpayer for an unintentional delay, despite full cooperation and honest disclosure. 7. ⁠ Sekhon Jagtar Singh, Bangalore vs Income Tax Officer, Ward- 5(3)(5), ... on 21 August, 2024:- the Income Tax Appellate Tribunal, Bangalore Bench, after careful consideration of the facts, submissions, and legal provisions, has held that the assessee, Sekhon Jagtar Singh, failed to file his return of income under a bona fide belief that his tax obligations were fully discharged through TDS by his employer. The Tribunal observed that the income was duly reflected in Form 16 and 26AS, and there was no intention to underreport or misrepresent income. The minor disallowance under section 24 was also held to be a genuine mistake made under a bona fide belief. Accordingly, the Tribunal Page | 4 concluded that the conditions under section 270A(6) were satisfied and that the case did not warrant a penalty for underreporting of income under section 270A. As a result, th....
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....of deemed total income assessed as per the provisions of section 115JB or section 115JC is greater than the maximum amount not chargeable to tax, where no return of income has been furnished or where return has been furnished for the first time under section 148; (f) the amount of deemed total income reassessed as per the provisions of section 115JB or section 115JC, as the case may be, is greater than the deemed total income assessed or reassessed immediately before such reassessment; (g) the income assessed or reassessed has the effect of reducing the loss or converting such loss into income. (6) The under-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 29-30 [the Joint Commissioner (Appeals) or] the Commissioner (Appeals) or the Commissioner or the Principal Commissioner, as the case may be, is satisfied that the explanation is bona fide and the assessee has disclosed all the material facts to substantiate the explanation offered; (b) the amount of under-reported income determined o....
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....assessee has been able to provide the reasonable explanation for such nondisclosure regarding salary and interest income by not filing of return of income or is a misrepresentation of facts. It is not in dispute that the Assessee is a non-filer and has filed return of income for the year under consideration u/s 148 of the Act declaring total income of Rs. 30,22,900/- and the reassessment has been completed accepting the returned income. While passing the reassessment order, a satisfaction has been recorded by the A.O. for 'under reporting the income' and consequent to the said satisfaction, penalty proceedings u/s 270A has been initiated for 'under reporting the income' and penalty has been imposed u/s 270A for 'under reporting the income'. 13. As could be observed from sub-section 2 to section 270A reproduced herein above, 'under Reporting income' occurs when a person discloses smaller amount than his actual income. In the present case, whatever income reported/declared by the Assessee has been accepted by the Department, therefore, it is not the case of reporting smaller amount than their actual income. Further the assessee, was, in the in....