SANTOSH CHAMOLI,DEHRADUN vs. ASSESSING OFFICER, WARD -1(1)(3) DEHRADUN, DEHRADUN

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ITA 252/DDN/2026Status: DisposedITAT Dehradun21 August 2026AY 2019-20205 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found the penalty levied at 200% to be unduly harsh and that the CIT(A) failed to consider the assessee's case under Section 270A(6). The Tribunal set aside the order and directed the CIT(A) to re-examine the case based on Section 270A(6).

What were the facts?

The assessee changed jobs and believed no return was required as TDS covered all income. Upon receiving an AO notice, the assessee complied, but penalty proceedings under Section 270A were initiated for under-reporting income.

What were the issues?

Whether the penalty under Section 270A was correctly levied at 200% and if the CIT(A) properly considered the assessee's explanation under Section 270A(6) regarding unawareness of law.

Which sections of the Income-tax Act were involved?

Section 270A,Section 270A(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DEHRADUN BENCH “DB” DEHRADUN

Before: SHRI RAJ KUMAR CHAUHAN & SHRI SANJAY AWASTHI

For Appellant: Shri Siddhant Jolly, CA
For Respondent: Shri Deepak Chaudhary, JCIT
Hearing: 24.07.2026

ITA No.252/DDN/2026 SANTOSH CHAMOLI IN THE INCOME TAX APPELLATE TRIBUNAL DEHRADUN BENCH “DB” DEHRADUN BEFORE SHRI RAJ KUMAR CHAUHAN, JUDICIAL MEMBER AND SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER ITA No.252/DDN/2026 Assessment Year: 2019-20 SANTOSH KUMAR CHAMOLI, Vs ASSESSING OFFICER, 81/2, Sai Lok, Phase-1, Niranjanpur, Ward 1(1)(3), Dehradun, Dehradun, Uttarakhand 248001. Uttarakhand 248001. PAN No. ARTPC7586P Appellant Respondent Assessee by Shri Siddhant Jolly, CA Revenue by Shri Deepak Chaudhary, JCIT Date of hearing: 24.07.2026 Pronouncement on 21.08.2026 O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER:

1.

This appeal arises from order dated 27.02.2026, u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”), by NFAC.

1.1 In this case, it is seen from the records that for the year under consideration the assessee had changed jobs during this year. Thereafter, the assessee was under the belief that since the entire salary income was subjected to TDS and thus, he was not required to file any return of income. Thereafter, on receipt of notice from the AO (dated 31.03.2023), the assessee engaged a tax professional and duly complied with the terms of notice, with all tax dues fulfilled. Subsequently,

ITA No.252/DDN/2026 SANTOSH CHAMOLI penalty proceedings u/s 270A of the Act were initiated for under reporting/misreporting of income.

1.2 The said penalty was levied at Rs.13,31,252/- @ 200% of under reported income, which was confirmed by the Ld. CIT(A) also.

1.3 The aggrieved assessee has approached the ITAT with grounds of appeal challenging this action on several grounds, including the ground of unawareness of law and undue harshness in the levy of penalty @ 200%.

2.

Before us the Ld. AR argued with the help of a paper book and stated that the assessee was under a genuineness impression that he was not required to file the return of income since the entire quantum of taxes due had been recovered through TDS. The Ld. AR also drew our attention to the fact that the penalty had been unduly levied at @200% without specifying the reason for enhancing it from the minimum of 100%. It was the submission that the Ld. CIT(A) has clearly mentioned on page 20 at para 6.7 that since the assessee has not challenged the quantum order and thus, the fact of misreporting of income was duly established. The Ld. AR argued that Section 270A(6) of the Act provides for a discretion to the Ld. AO for considering whether there was a plausible explanation for the default being considered u/s 270A of the Act. The Ld. AR stated that the assessee’s case would fall within the basic premise of Section 270A(6) of the Act and therefore he deserves

ITA No.252/DDN/2026 SANTOSH CHAMOLI relief, also because the pleadings of the assessee, about the reasons for default had not been considered by the Ld. CIT(A).

2.1 The Ld. DR took us through the order of Ld. AO and CIT(A) and stated that ignorance of law could not be treated as a genuine excuse for not filing a return of income.

3.

We have carefully considered the rival submissions and have gone through the records before us. We find that while the Ld. AO has been unduly harsh in levying the penalty at @200% without assigning any specific reason for levying the said penalty beyond the minimum of 100% prescribed. We also find that the Ld. CIT(A) has not considered the case of the assessee for the purposes of Section 270A(6) of the Act. It is appreciated that an assessee should not be unduly punished for any lack of knowledge of taxation laws especially when there can be a reason to believe that once the TDS has been made on the entire quantum of income then there was no need to file any return of income. We hasten to add that we are not condoning the lapse but merely observing that once the penal provisions themselves provide an escape clause then the Revenue authorities and the tax counsels are duty bound to test the facts on the basis of such provisions, in this case being 270A(6) of the Act. For the sake of reference, the said provision is extracted as under: -

“(6) The under-reported income for the purposes of this section, shall not include the following, namely: -

ITA No.252/DDN/2026 SANTOSH CHAMOLI (a) the amount of income in respect of which the assessee offers an explanation and the Assessing Officer or [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 on the basis of an estimate, if the accounts are correct and complete to the satisfaction of the Assessing Officer or [the Joint Commissioner (Appeals) or] the Commissioner (Appeals) or the Commissioner or the Principal Commissioner, as the case may be, but the method employed is such that the income cannot properly be deduced therefrom; (c) the amount of under-reported income determined on the basis of an estimate, if the assessee has, on his own, estimated a lower amount of addition or disallowance on the same issue, has included such amount in the computation of his income and has disclosed all the facts material to the addition or disallowance; (d) the amount of under-reported income represented by any addition made in conformity with the arm’s length price determined by the Transfer Pricing Officer, where the assessee had maintained information and documents as prescribed under section 92D, declared the international transaction under Chapter X, and, disclosed all the material facts relating to the transaction; and (e) the amount of undisclosed income referred to in section 271AAB.” We set aside the impugned order and direct that the Ld. CIT(A) must examine the assessee’s case on the basis of the provisions of Section 270A(6) of the Act and thereafter pass a reasoned and speaking order.

4.

In the result, the appeal is partly allowed for statistical purposes.

Order pronounced in the open court on 21.08.2026

Sd/- Sd/- (RAJ KUMAR CHAUHAN) (SANJAY AWASTHI) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 21.08.2026 *Kavita Arora, Sr. P.S. Copy forwarded to: 1. Appellant

ITA No.252/DDN/2026 SANTOSH CHAMOLI 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI

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