SANJOY SANTOSH SIKDAR,VADODARA vs. INCOME TAX OFFICER WARD 1(2)(2), VADODARA

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ITA 1904/AHD/2025Status: DisposedITAT Ahmedabad17 June 2026AY 2011-126 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had no intention to conceal income, as the TDS on salary was deducted but not deposited by the employer, and the interest income discrepancy was due to a bonafide belief. Therefore, the penalty was deleted.

What were the facts?

The assessee did not file an income tax return. During reassessment, it was found that the assessee had declared less interest income and had not filed the return despite TDS being deducted by the employer. The Assessing Officer levied penalty under Section 271(1)(c).

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when the assessee's failure to file return was due to employer's non-deposit of TDS and the lower declaration of interest income was due to a bonafide belief.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 147,Section 148,Section 139(1),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG & SHRI NARENDRA PRASAD SINHA

For Appellant: Shri Rajeev Khandelwal, A.R, Smt. Ananya Kulshresth, Sr. DR
For Respondent: Smt. Ananya Kulshresth, Sr. DR
Hearing: 07/04/2026Pronounced: 17/06/2026

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD

BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No. 1904/Ahd/2025 (िनधा�रण वष� / Assessment Year : 2011-12) Sanjoy Santosh Sikdar बनाम The Income Tax Officer / E-201, Samrajaya Flats, Ward-1(2)(2), Vs. 2nd Floor, Old GEB Opp. Sabri Vidhalya, Saiyad Vasna Road, Vadodara, Building, Race Cource Gujarat - 390015 Circle, Baroda, Vadodara, Gujarat - 390007 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AJUPS8323F (Appellant) .. (Respondent) अपीलाथ� ओर से /Appellant by : Shri Rajeev Khandelwal, A.R. ��यथ� क� ओर से/Respondent by : Smt. Ananya Kulshresth, Sr. DR

Date of Hearing 07/04/2026 Date of Pronouncement 17/06/2026 (आदेश)/ORDER Per Sanjay Garg, Judicial Member:

The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (hereinafter referred to as “NFAC”), Delhi (hereinafter referred to as “CIT(A)”), dated 03.09.2024 passed under Section 250 of the Income Tax Act, 1961 (hereinafter

ITA No.1904/Ahd/2025[Sanjoy Santosh Sikdar vs. ITO] A.Y. 2011-12 - 2 –

referred to as the “Act”) and relates to Assessment Year (A.Y.) 2011-12.

2.

The appeal of the assessee is time barred by 311 days. The separate application for the condonation of delay alongwith affidavit of the assessee has been filed, wherein, it has been contended that the impugned order of the Ld.CIT(A) was never served upon the assessee. That since the assessee was not aware of the passing of the impugned order, therefore, he cannot file the appeal against the said order in time. The assessee became aware of passing of the impugned order only when the assessee received notice for demand of tax. Considering the averments made in the application, the delay in filing of the present appeal is, hereby, condoned.

3.

The assessee in this appeal has contested the levy of penalty of Rs.3,78,239/- u/s 271(1)(c) of the Act.

4.

The brief facts of the case are that the assessee had earned salary income of Rs.21,61,050/-, further, an interest income of Rs.52,154/-. The assessee did not file any return of income. Thereafter, the assessment in the case of the assessee was reopened u/s 147 of the Act. In response to the notice issued u/s 148 of the Act, the assessee filed return of income declaring total income of Rs.21,78,150/-. The AO, however, observed that in the return of income the assessee had shown interest income of Rs.17,110/-, whereas, the total interest income earned by the

ITA No.1904/Ahd/2025[Sanjoy Santosh Sikdar vs. ITO] A.Y. 2011-12 - 3 –

assessee was Rs.52,154/-. He, therefore, observed that the assessee had shown less interest income of Rs.35,044/-. He, therefore, initiated penalty proceedings u/s 271(1)(c) of the Act. He observed that since the assessee had not filed any return of income u/s 139(1) of the Act, therefore, the assessee had concealed his returned income of Rs.21,78,150/- also. Further, that the assessee had concealed interest income of Rs.35,054/- as discussed above. He, therefore, assessed the tax sought to be evaded at Rs.3,78,239/- and levied penalty u/s 271(1)(c) of the Act @100%.

5.

So far as the addition made by the AO of interest income of Rs.35,054/- was concerned, the Ld. CIT(A) in quantum appeal restricted the same to Rs.32,283/-.

5.1 So far as the appeal against the levy of penalty u/s 271(1)(c) of the Act was concerned, the assessee explained before the Ld.CIT(A) that the assessee was prevented by sufficient cause for not filing the return of income u/s 139(1) of the Act. It was explained that the assessee was an employee of Jord Engineers Ltd. That the said employer had deducted TDS of Rs.5,40,000/-, however, had deposited in the Government account only an amount of Rs.1,38,000/-. Since, the employer had not deposited the remaining amount of TDS deducted of Rs.4,02,000/- and did not issue Form 16 to the assessee, therefore, the assessee was prevented by sufficient cause for not filing the return of income.

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It was, therefore, pleaded that there was no intention of the assessee to evade payment of any tax.

5.2 So far as the less disclosure of the interest income was concerned, it was explained that the assessee was not very much conversant with the Income Tax matters. It was explained that interest was earned on the FDR, which was cumulative interest of three years. It was advised that the assessee was supposed to pay tax only on the interest income for the year under consideration and not on the cumulative interest income of all the three years. Therefore, in such a misimpression, the interest income only of Rs.17,109/- was offered, resulting into the impugned addition.

5.3 The Ld.CIT(A), however, did not agree with the above contentions of the assessee and dismissed the appeal of the assessee, however, restricted the penalty in respect of interest income of Rs.32,283/- only.

6.

Being aggrieved by the said order of the Ld.CIT(A), the assessee is in appeal before us.

7.

We have heard the rival contentions and gone through the records. In this case, the impugned penalty has been levied by the AO in respect of the salary income observing that the assessee had not filed the original return of income and, therefore, the assessee concealed his salary income. However, during the appellate proceedings, the assessee explained that the employer of the

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assessee had duly deducted TDS of Rs.5,40,000/- on the salary income. However, the employer had deposited in the Government account only an amount of Rs.1,38,000/-. It has been duly explained that there was no intention to conceal the particulars of income. The tax was duly deducted upon the income of the assessee by the employer. The assessee has also mentioned that he had written so many letters to the employer and the copies of the same were also sent to the ITO, TDS, Deputy Commissioner of Income Tax, Circle-8 (the Assessing Officer of the employer) informing that the TDS deducted from the salary of the assessee has not been paid to the credit of the Government and that the same was not reflected in Form 26AS. These facts have not been disputed by the Ld.DR. These facts were also duly brought to the knowledge of the lower authorities not only during the penalty proceedings, but also during the appellate proceedings. Since, in this case, the assessee had requested time and again not only to his employer, but also to the concerned Income Tax Authorities that the TDS deducted out of salary has not been deposited with the Government and not credited to his account and was not reflecting in Form 26AS, therefore, it is established that there was no intention of the assessee to conceal his particulars of income. The assessee, therefore, was under the impression that his concern would be resolved and, thereafter, he will file the return of income. Therefore, it is not a case of tax evasion as alleged by the AO. The impugned penalty on account of income declared as salary income by the assessee is, therefore, ordered to be deleted.

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8.

So far as the short interest income declared by the assessee is concerned, the same is a meagre amount and the assessee has submitted that as advised, he was under bonafide belief that the tax is payable only on the interest income of Rs.17,109/- and not on the cumulative interest of income of three years of Rs.35,054/-. Considering the smallness of the amount and the explanation given by the assessee, we are of the view that it is not a case of furnishing inaccurate particulars of income or concealment of income, therefore, the impugned penalty levied by the AO is ordered to be deleted.

9.

In the result, the appeal of the assessee stands allowed.

This Order pronounced on 17/06/2026

Sd/- Sd/- (NARENDRA PRASAD SINHA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 17/06/2026 S. K. SINHA True Copy आदेश क� �ितिल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant ��यथ� / The Respondent. 2. 3. संबंिधत आयकर आयु� / Concerned CIT आयकर आयु�(अपील) / The CIT(A)- 4. 5. �वभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad गाड� फाईल / Guard file. 6. आदेशानुसार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad

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