DILIP GANGARAM MALI,NASHIK vs. ITO, WARD 2(1), NASHIK, NASHIK

Since the issues involved in these two appeals are common, identical and interlinked and for the sake of convenience, we Dilip Gangaram Mali shall take up ITA 389/PUN/2026 for the Assessment Year 2017-18 as a lead case and facts narrated.

The brief facts of the case are that, the assessee is a employee of Bosch Ltd. and has filed the return of income disclosing a total income of Rs.5,06,720/- for the A.Y. 2017-18 on 16.06.2017 and claimed deduction under Chapter VIA of the Act of Rs.2,35,000/- and also claimed a refund of Rs.83,520/-Subsequently, the assessee has filed the revised return of income on 06.06.2019 disclosing a total income of Rs.9,12,160/- and paid income tax and interest aggregating to Rs.1.02,875/-.There was survey operations u/sec133A of the Act on the consultant who has filed the return of income of the assessee without verifying the claims under Chapter VIA of the Act. The Assessing Officer (A.O) has reason to believe that the income has escaped the assessment and has issued notice u/sec148 of the Act dated 17.02.2020 and in compliance, the assessee has filed the return of income on 23.05.2020 disclosing a total income of Rs.9,12,160/-. Subsequently, notice u/sec 143(2) and U/sec 142(1) of the Act was issued calling for details and clarifications and the assessee has filed the details. Finally the Assessing Officer assessed the total income of Rs.9,12,160/- and passed the order u/sec 147 r.w.s144 of the Act dated 24.08.2021. Subsequently, the AO has initiated penalty proceedings and issued notice u/sec 270A of the Act and the assessee was provided opportunities to explain the reasons for under reporting of income and the assessee has filed the explanations. Whereas the A.O was not satisfied with the explanations and levied penalty of Rs.2,21,310 u/sec 2710A of the Act vide order dated 11.11.2021. 4. Aggrieved by the order, the assessee has filed the appeal before the CIT(A). Whereas the CIT(A) has considered the Dilip Gangaram Mali grounds of appeal, statement of facts, submissions of the assessee and findings of assessing officer, but has sustained the penalty levied by the AO and dismissed the appeal. Aggrieved by the CIT(A), the assessee has filed the appeal before the Hon'ble Tribunal.

At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in confirming the action of the A.O in levying of penalty overlooking the facts and information. Further the Ld.AR mentioned that the assessee has filed the revised return of income disclosing a higher income and paid taxes and interest on 06.06.2019, which is very much prior to issue of notice under Section 148 of the Act on 5.03.2020. Further Ld.AR submitted that the assessee has discharge the tax liability on the additional income before the issue of notice u/sec148 of the Act and therefore there is no under reporting of income and provisions of section 270A of the Act are not attracted. The Ld.AR substantiated the submissions with factual paper book and judicial decisions and prayed for allowing the appeal. Per Contra, the Ld. DR relied on the order of the CIT(A).

We heard the rival submissions and perused the material on record. The sole matrix of the dispute envisaged by the Ld.AR that the CIT(A) has erred in sustaining levy of penalty u/sec.270A of the Act, though the assessee has not under reported any income.The Ld.AR mentioned that the assessee has filed the revised return of income on 06.06.2019 disclosing a total income of Rs.9,12,160/- and paid income tax and interest aggregating to Rs.1.02,875/-. Whereas notice under Section 148 of the Act was Dilip Gangaram Mali issued on 5.03.2020 and in compliance, the assessee has filed the return of income disclosing a total income of Rs.9,12,160/-.The Ld.AR’s contentions are that the assessee has filed the revised return of income disclosing higher income and paid taxes and interest much prior to issue of notice u/sec148 of the Act dated 5.03.2020 and therefore there is no suppression/ under reporting income by the assessee and the penalty levied u/sec270A of the Act is not sustainable and relied on judicial decisions. Whereas The Honble Income Tax tribunal Pune ITA Benches in No.2021/PUN/2024 in the case of Prashant Balasaheb has dealt on the subject matter of levy of penalty u/sec270A of the Act in similar circumstances and allowed the assessee appeal, which is read as under:

Facts of the case, in brief, are that the assessee is an individual salaried employee filed return of income for the assessment year 2017-18 declaring taxable income of Rs.4,05,650/- after claiming various deductions of Rs.2,42,420/- under Chapter VI-A. The Assessing Officer, on the basis of information received from the Income Tax Officer, (Investigation) Nashik, that the assessee has claimed excess deductions, initiated proceeding u/s 147 of the IT Act after obtaining approval from the authorities & accordingly, a notice u/s 148 was issued. The assessee furnished return of income in response to notice u/s 148 of the IT Act, declaring taxable income of Rs.7,24,000/- after claiming deductions under Chapter VI-A. The assessment was completed u/s 147 r.w.s. 144B of the IT Act on 21.09.2021 by accepting the income returned in response to notice u/s 148 of the IT Act. Subsequently, vide order dated 15.03.2022 the Assessing Officer imposed penalty of Rs.1,08,470/- u/s 270A(8) of the IT Act for underreporting of income in consequence of misreporting.

After considering the reply of the assessee, Ld. CIT(A)/NFAC dismissed the appeal and confirmed the penalty of Rs.1,08,470/- imposed u/s 270A(8) of the IT Act. It is this order against which the assessee is in appeal before this Tribunal.

When the present appeal was called for hearing, none appeared on behalf of the assessee, neither any application for adjournment was filed despite due service of notice. Therefore, we proceed to decide the appeal on the basis of material available on record & after hearing Ld. DR.

Ld. DR submitted before us that the appellant has not filed correct return of income voluntarily & therefore the appellant is liable for penalty. It was therefore requested by Ld. DR to confirm the penalty order passed by AO & sustained by Ld. CIT(A)/NFAC.

We have heard Ld. DR & perused the material available on record. From the statement of facts, we find that the assessee is a salaried employee of CEAT Limited & belongs to technical background. The return of most of the employees of CEAT LTD, Bosch Company, HAL & M & M including that of the assessee was filed by a tax consultant namely Kishor Patil. We further find that the assessee came to know from other employees in company that Mr. Kishor Patil with his expertise is able to Dilip Gangaram Mali legally calculate lower tax, resulting in refund of TDS deducted by employer. The assessee was unaware about the contents of the Income Tax Return filed by Kishor Patil & truly believed that the returns are filed legally as per the provisions of the Income Tax Act. The assessee being from technical background does not understand ABCD of Income Tax &

Respectfully following the above decision passed by the Coordinate Bench of this Tribunal (supra) & also in the light of other decisions passed by coordinate Pune Benches Pune in the case of Annasaheb Namdeo Gunjal vs ITO Nashik in ITA No.182/P/2024 order dated 21-10-2024 & in the case of Deepak Bhikha vs ITO Nashik in ITA No.685/PUN/2024 order dated 21-10-2024 wherein similar penalty was directed to be deleted, we direct the AO to delete the penalty of Rs.1,08,470/- imposed u/s 270A(8) of the IT Act. Thus, the grounds of appeal raised by the assessee in the present appeal are allowed.

In the result, the appeal of the assessee is allowed.”

Therefore, we considering the facts, circumstances, submissions and the ratio of the judicial decisions dealt and follow the judicial precedence. Accordingly, set aside the order of the CIT(A) and direct the assessing officer to delete the penalty and the grounds of appeal are allowed in favour of the assessee.

In the result, the appeal filed by the assessee is allowed.

As the facts and circumstances in this appealis identical to ITA No.389/PAN/2026 for the A.Y 2017-18 (except variance in figures) and the decision rendered in Dilip Gangaram Mali above paragraphs 6 to 8 would apply mutatis mutandis for this appeal also. Accordingly, the grounds of appeal of the assessee are allowed.

In the result, the two appeals filed by the assessee are allowed.

The Pr. CIT concerned. 4. तिभागीयप्रतितिति,आयकरअिीिीयअतिकरण, “A” बेंच, पुणे/ DR, ITAT, “A” Bench, Pune. गार्डफ़ाइि / Guard File. 5. ////