FAIYAZ ABDULGHANI DALVI,MUMBAI vs. WARD 42(2)(2), MUMBAI, MUMBAI

आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2016-17 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 08-09-2025confirming penalty of Rs.3,37,529/- as levied by Ld. AO u/s 271(1)(c) vide order dated 30-06- 2024. The Ld. AR advanced various arguments supporting the case of the assessee whereas Ld. Sr. DR justified confirmation of impugned

penalty. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. 2. It emerges that the assessee did not file its return of income and accordingly, the case was reopened. The assessee earned salary income on which tax was deducted at source (TDS) by the employer. In response to reopening notice, the assessee filed return of income at Rs.16.75 Lacs which ultimately stood accepted in the assessment proceedings. However, since the assessee did not file return of income despite having taxable income, Ld. AO initiated impugned penalty and finally imposed penalty of Rs.3,37,529/- after rejecting assessee’s submissions and arguments. The Ld. AO alleged concealment of income to the extent of Rs.16.75 Lacs. The action of Ld. AO stood confirmed by Ld. CIT(A) against which the assessee is in further appeal before us. 3. From assessee’s computation of income, it could be seen that the assessee’s substantial income is out of salary income on which full TDS has been deducted by assessee’s employer. These are undisputed facts. The assessee has offered interest income on savings bank account which has given rise to additional tax payment of Rs.7,140/- only which stood fully paid by the assessee. The remaining substantial tax has been satisfied by way of TDS. The assessee’s return of income has ultimately been accepted by Ld. AO. In such a scenario, the allegation of escapement of income could not be levelled against the assessee. At the most, the assessee could be visited with consequences of non-filing of return of income by due date. However,

the facts of the case do not make it a fit case for levy of impugned penalty. Therefore, by deleting the same, we allow the appeal of the assessee. 4. The appeal stand allowed. Order pronounced on 11th June, 2026 Sd/- Sd/- (PAWAN SINGH) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER ANKIT, PS Dated: 11.06.2026 आदेश की प्रनिनलनप अग्रेनर्ि /Copy of the Order forwarded to : 1. अपीलाथी/Appellant 2. प्रत्यथी/Respondent 3. आयकरआयुक्त/CIT 4. ववभागीयप्रवतवनवि/DR 5. गार्डफाईल/GF ASSISTANT REGISTRAR

ITAT MUMBAI