Penalty Penalty under Section 270A can be Deleted Where Assessee is in Bona Fide Belief for An Act

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The Tax Publishers Income Tax--Penalty Penalty under Section 270A can be Deleted Where Assessee is in Bona Fide Belief for An Act Akhilesh Kumar Sah The basic principles of deletion of penalty under section 271(1)(c) are capable to similarity in respect of penalty under section 270A of the Income Tax Act, 1961 (for short, 'the Act'). The harsh provisions of penalty can be relaxed where assessee has acted in a bona fide belief with unintentional wrong. 1. Introduction Penalty under section 270A of the Act can be saved where an assessee has acted in a bona fide manner. Recently, in Sekhon Jagtar Singh v. ITO [ITA No. 1104/Bang/2024 (AY: 2017-18)] decided by ITAT, Bangalore on 21-8-2024, assessee, being an individual, had not filed return of income under section 139 of the Act for assessment year and had disclosed the income under the head 'Salary' in response to the notices issued under section 148 of the Act by furnishing Form No. 16. AO during the assessment proceedings found that assessee had claimed excessive deduction in Form No. 16 under section 24 of the Act representing the interest on housing loan, which was added to the total income of assessee. As such, the income was determined in the assessment framed under section 147 of the Act. As assessee had not filed original return of income, AO initiated penalty proceedings for underreporting of income, which came to be confirmed at 50% of the amount of tax sought to be evaded by the assessee. On appeal, the CIT(A) confirmed the order of AO, against which assessee filed appeal before ITAT. 2. Appellant's submissions Assessee submitted that all the due tax on the income earned by assessee under the head 'Salary' were already deducted by the employer and there was bona fide belief on the part of assessee that he had not underreported the income in pursuance to the provisions of section 270A(6) of the Act. Therefore, the penalty under section 270A of the Act could not be levied. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Income Tax--Penalty

Penalty under Section 270A can be Deleted Where Assessee is in Bona Fide Belief for An Act

Akhilesh Kumar Sah

The basic principles of deletion of penalty under section 271(1)(c) are capable to similarity in respect of penalty under section 270A of the Income Tax Act, 1961 (for short, 'the Act'). The harsh provisions of penalty can be relaxed where assessee has acted in a bona fide belief with unintentional wrong.

1. Introduction

Penalty under section 270A of the Act can be saved where an assessee has acted in a bona fide manner.

Recently, in Sekhon Jagtar Singh v. ITO [ITA No. 1104/Bang/2024 (AY: 2017-18)] decided by ITAT, Bangalore on 21-8-2024, assessee, being an individual, had not filed return of income under section 139 of the Act for assessment year and had disclosed the income under the head 'Salary' in response to the notices issued under section 148 of the Act by furnishing Form No. 16. AO during the assessment proceedings found that assessee had claimed excessive deduction in Form No. 16 under section 24 of the Act representing the interest on housing loan, which was added to the total income of assessee. As such, the income was determined in the assessment framed under section 147 of the Act. As assessee had not filed original return of income, AO initiated penalty proceedings for underreporting of income, which came to be confirmed at 50% of the amount of tax sought to be evaded by the assessee.

On appeal, the CIT(A) confirmed the order of AO, against which assessee filed appeal before ITAT.

2. Appellant's submissions

Assessee submitted that all the due tax on the income earned by assessee under the head 'Salary' were already deducted by the employer and there was bona fide belief on the part of assessee that he had not underreported the income in pursuance to the provisions of section 270A(6) of the Act. Therefore, the penalty under section 270A of the Act could not be levied.