SHIRISH MURLIDHAR KULKARNI,NASHIK vs. ITO WARD 2(1), NASHIK

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ITA 2428/PUN/2025Status: DisposedITAT Chandigarh13 April 2026AY 2017-188 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the assessee voluntarily corrected the mistake and paid the due tax with interest before the issuance of notice, the penalty was not leviable. The Tribunal followed its previous decisions in similar cases where penalties were deleted under identical circumstances.

What were the facts?

The assessee claimed excess deductions in the original return, leading to a refund. Upon realizing the error, the assessee voluntarily refunded the excess amount with interest before a notice under section 148 was issued. Subsequently, the Assessing Officer levied penalties under section 271(1)(c) and 270A for the assessment years 2016-17, 2017-18, and 2018-19.

What were the issues?

Whether penalty under section 271(1)(c) and 270A is leviable when the assessee voluntarily rectifies the incorrect claim of deduction and pays the due tax with interest before the issuance of notice under section 148.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 270A,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE

Before: DR.MANISH BORAD

For Appellant: CA Abhilasha Pawar
For Respondent: Shri Ambarnath Khule
Hearing: 18.03.2026Pronounced: 13.04.2026

The captioned appeals at the instance of assessee pertaining to the Assessment Years 2016-17, 2017-18 & 2018- 19 are directed against the separate orders dated 30.09.2025 of National Faceless Appeal Centre, Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of the respective Penalty Orders passed u/s.271(1)(c)/270A of the Act.

2.

The common grievance in these three appeals is against the levy of penalty at Rs.72,031/- u/s.271(1)(c) of the Act for A.Y. 2016-17; Rs.1,40,972/- u/s.270A of the Act for A.Y. 2017-18 and Rs.1,53,016/- u/s.270A of the Act for A.Y. 2018-19. 3. At the outset, ld. Counsel for the assessee placing reliance on the decision of Coordinate Bench in the case of Santosh - ITA Nos. 2131 to 2132/PUN/2024 order dated 18.02.2025 submitted that the same is squarely applicable on the facts of the instant case so much so that the assessee made excess claim of deductions in the income tax returns resulting into refund but thereafter assessee on coming to the knowledge about the wrong claim allegedly made on the wrong guidance of the Tax Consultant, refunded back the excess refund received by him along with interest payable thereon. Subsequent to the deposit of excess refund with the Government Treasury, notice u/s.148 of the Act has been issued and in compliance thereof the assessee has furnished the return of income making correct claim of deduction u/s.80C of the Act and therefore in light of the above decision assessee should not be considered as assessee in default for furnishing ‘inaccurate particulars of income or ‘concealment of income’ or ‘underreporting of income’ as provided u/s.271(1)(c)/270A of the Act respectively.

4.

On the other hand, ld.DR supported the orders of ld.CIT(A).

5.

I have heard the rival contentions and perused the record placed before me. The common issue relates to levy of penalty u/s.271(1)(c) of the Act. Admittedly, the assessee is employed with BOSCH Ltd. and has claimed excess deductions under the provisions of Income-tax Act in the original return thereto claiming excess refund. Thereafter, assessee had come to the knowledge about the wrong claim and suo motu deposited the excess refund along with interest to the Government Treasury. by the Assessing Officer by issuing notice u/s.148 of the Act and assessee has filed the return in compliance thereof and has disclosed the correct income. However, ld. Assessing Officer even though accepted the returned income has initiated the penalty proceedings for excess claim of deductions made in the original return of income and subsequently levied penalty u/s.271(1)(c) for A.Y. 2016-17/270A of the Act for the A.Yrs. 2017-18 and 2018-19. I note that under similar set of facts and circumstance this Tribunal in the case has dealt with the issue and has deleted the impugned penalty observing as follows :

“9. 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 BOSCH Limited & belongs to technical background. The return of most of the employees of Bosch Company, 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 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 & therefore completely relied on the above named tax consultant, who without informing him & others, claimed excess deduction under chapter VI-A of the IT Act & claimed refund. It was Kishor Patil who cheated all the employees & claimed excess deduction in their returns without informing them for his own benefit. The fact of the cheating came in light when a survey u/s 133A was conducted at the premises of Mr Kishor Patil. When the fact that this kind of fraud was made in the name of number of persons all of them complaint to the Economic Offence Wing of Police Nashik, against the tax consultant Kishore Patil. The news regarding fraud committed by Kishore Patil also flashed in the daily news paper of Nashik. It is also apparent that there is no mistake of the assessee but it was the hidden interest of the the assessee & many more for his own benefit. It is also found that as soon as the fact of excess deduction claimed, came to the knowledge of the assessee he immediately contacted another genuine tax consultant who prepared and furnished correct return in response to the notice u/s 148 of the IT Act & paid the due tax with interest, even before the issue of notice u/s 148 of the IT Act. We find that the Assessing Officer has levied penalty u/s 271(1)(c) of the IT Act of Rs.36,000/- on the basis that the assessee has not filed correct income voluntarily. It is also found that when the notice u/s 148 was issued the appellant has disclosed his correct income & paid the due tax before issue of notice. We also find that the Assessing Officer has accepted the return as it is which was furnished by the appellant in response to the notice u/s 148 of the IT Act. We cannot accept the contention of Ld. DR that the appeal has not been filed by the appellant against assessment order wherein penalty was initiated & the revised return was not voluntary therefore the penalty u/s 271(1)(c) is inevitable. From the perusal of penalty order, it appears that the Assessing Officer himself is not sure about the particular limb under which the penalty is imposed. In para 16 of the penalty order, it is mentioned that the assessee has furnished inaccurate particular of income whereas in para 18 of the penalty order the Assessing Officer has mentioned that in view of the concealment of income the penalty u/s 271(1)(c) is imposed. In this kind of situation, we find support from a Co-ordinate Bench decision of this Tribunal passed in the case of Sunil Chunilal Kumavat vs. ITO in ITA Nos.1447, 1401 & 1402/PUN./2023 for assessment years 2016-2017, 2017- 2018 & 2018-2019 order dated 22.03.2024, wherein, under identical situation and similar facts, the penalty u/s 271(1)(c) & 270A was deleted by observing as under :- “3. I have given my thoughtful consideration to the assessee’s pleadings and Revenue’s foregoing vehement contentions. I find no reason to sustain either one of these three penalties. This is for the precise reason that the Assessing Officer’s sec.271(1)(c) order in the first and foremost assessment year 2016-17 had concluded that the assessee’s bogus claim under sec.80C deduction(s) is an instance of “furnishing inaccurate particulars of income” in para-iii pages 7 to 8 in the NFAC’s order. Whereas it’s impugned discussion in para.7.9 onwards holds it as a fit case for confirming the impugned penalty after having found the assessee having concealed his taxable income. I am of the view that such a deviation regarding applicability of the statutory twin “limbs” of “concealment of taxable income vis-à-vis furnishing of inaccurate particulars thereof ”; is not sustainable in law in light of hon’ble juri ictional high court’s decision in Mohd. Farhan A. Shaikh vs. ACIT [2021] 434 ITR (1) (Bom.). The impugned penalty is deleted in very terms. The assessee succeeds in his instant first and foremost appeal ITA.No.1447/PUN./2023 for assessment year 2016-2017. 4. The outcome would be hardly any different in the assessee’s latter twin appeals I.T.A.Nos.1401 & 1402/PUN./2023 for assessment years 2017-2018 & 2018-2019, respectively. The Revenue could not dispute the clinching fact that although the learned lower authorities have levied 200% penalty(ies) in assessee’s case going by sec.270A(8) on one hand; whereas they nowhere specify the corresponding limb(s) of “under-reporting of income in consequence of any mis-reporting” thereof; as prescribed sub-sec. (9) containing (a) to (f) clauses. Faced with this situation, I adopt stricter interpretation as per Commissioner of Customs (Imports), Mumbai vs. Dilip Kumar And Co. & Ors. [2018] 9 SCC 1 (SC) (FB) and conclude that these twin penalties for assessment years 2017-2018 and 2018-2019 also deserve to be deleted. Ordered accordingly.”

10.

Respectfully following the above decision of the Tribunal (supra), wherein under similar/ identical situation the penalty imposed u/s 271(1)(c) was deleted, we direct the AO to delete the penalty of Rs.36,000/- imposed u/s 271(1)(c) of the IT Act. Thus, the grounds raised by the assessee are allowed.

11.

In the result, the appeal filed by the assessee in ITA No.2131/PUN/2024 for A.Y. 2016-17 is allowed. ITA No.2132/PUN/2024, A.Y. A.Y. 2017-18 :

12.

This appeal is filed by the assessee against the order passed by Ld. CIT(A) wherein imposition of penalty by the AO u/s 270A of the IT Act was confirmed.

13.

Since penalty u/s 271(1)(c) was applicable only upto assessment year 2016-17 and was replaced by a new section i.e. 270A of the IT Act, the Assessing Officer under similar facts imposed penalty u/s 270A of the IT Act for assessment year 2017-18. As the facts of the case have already been discussed in preceding paragraphs, we proceed to decide the appeal accordingly.

14.

For the assessment year under consideration, notices u/s 147/148 were issued to the assessee and the assessee furnished return in response to above notices and disclosed the correct income which was accepted by the Assessing Officer while completing the assessment. Penalty u/s 270A was initiated in the assessment order and subsequently penalty of Rs.66,332/- u/s 270A(9) was imposed for underreporting of income as a consequence of misreporting. In this regard, we find that prior to imposition of penalty a notice to show-cause – why an order imposing penalty u/s 270A should not be passed, was issued to the assessee but the particular clause (‘a’ to ‘f’) of sub-section (9) of section 270A of the IT Act was not mentioned. In such kind of situation, we find support from the decision of Co-ordinate Bench of this Tribunal in the case of Shashikant Sukdeo Ambekar in ITA No.365 & 366/PUN/2023 dated 20-07-2023 wherein under identical facts and similar circumstances the Tribunal has deleted the penalty u/s 270A by observing as under : - “8. In the case under consideration, the AO has failed to identify the specific Clauses from Clause (a-f) of section 270A(9) of the Act. Therefore, respectfully following ITAT Pune and ITAT Mumbai decisions the AO is directed to delete the penalty under section 270A of the Act. Accordingly, grounds of appeal raised by the assessee are allowed.”

15.

Respectfully following the above decisions passed by the Coordinate Bench of this Tribunal (supra), we direct the AO to delete the penalty of Rs.66,332/- imposed u/s 270A(9) of the IT Act. Thus, the grounds of appeal raised by the assessee in the present appeal are allowed.

16.

In the result, the appeal filed by the assessee in ITA No.2132/PUN/2024 is allowed.

17.

To sum up, both the above captioned appeals of the assessee are allowed.”

6.

Similar view has also been taken in the subsequent in the another assessee namely Yogesh Shivaji Shindi Vs. ITO – ITA No.168/PUN/2025 order dated 08.05.2025. 7. I further observe that the facts for deposit of excess refund of each of the assessment years prior to issuance of notice u/s.148 of the Act have been provided by the assessee. On going through the above details, admittedly prior to issuance of notice u/s.148 of the Act, the assessee has voluntarily deposited the excess refund received by him along with interest on account of making wrong claim of deductions in the original return of income. I therefore find that the ratio laid down by the Tribunal in decisions referred supra are squarely applicable on the facts of the instant assessment years under appeal and therefore respectfully following the same impugned penalties levied u/s. penalty u/s.271(1)(c) for A.Y. 2016-17 and u/s.270A of the Act for the A.Yrs. 2017-18 and 2018-19 stand deleted. Respective finding of ld.CIT(A) is set aside and effective grounds of appeal raised by the assessee are allowed.

8.

In the result, all the three appeals of the assessee are allowed.

Order pronounced on this 13th day of April, 2026. (MANISH BORAD) ACCOUNTANT MEMBER पुणे / Pune; दिन ंक / Dated : 13th April, 2026. Satish Date: 2026.04.15 16:26:27 +05'30'

आदेश की प्रतिलिपि अग्रेपिि / Copy of the Order forwarded to : अपील र्थी / The Appellant. 1. प्रत्यर्थी / The Respondent.

2.3.

The Pr. CIT concerned. विभ गीय प्रतितनधि, आयकर अपीलीय अधिकरण, “SMC” बेंच, 4. पुणे / DR, ITAT, “SMC” Bench, Pune. ग र्ड फ़ इल / Guard File. 5. आिेश नुस र / BY ORDER,

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