VIVEK TRIVEDI,MUMBAI vs. ACIT, CIRCLE 42(3)(1), MUMBAI, MUMBAI

ITA 6613/MUM/2026Status: DisposedITAT Mumbai23 September 2026AY 2020-2111 pages
AI SummaryAllowed

What were the facts?

The assessee, Vivek Trivedi, an individual employed as a ship captain, failed to furnish his return of income for Assessment Year 2020-21 by the due date. The Revenue, based on information regarding property purchase, salary, and interest income, initiated reassessment proceedings under Section 147. The assessee filed a return under Section 148 declaring an income of ₹31,57,840. During reassessment, the Assessing Officer (AO) accepted the returned income, noting the property was largely financed by a housing loan and the balance explained by redemption of investments. The reassessment order under Section 147 read with Section 144B resulted in no demand as tax deducted at source (TDS) covered the liability. However, the AO initiated penalty proceedings under Section 270A for failure to file the return under Section 139(1), levying a penalty of ₹3,95,123.

What did the Tribunal hold?

The Tribunal held that the authorities below were not justified in sustaining the penalty merely on the ground that the return was furnished for the first time under Section 148. The Tribunal reasoned that Section 270A has a composite scheme requiring identification of situations under subsection (2), determination of under-reported income under subsection (3), examination of exclusions under subsection (6), and then quantification of penalty. While Section 270A(2)(b) is attracted if a return is filed for the first time under Section 148 and assessed income exceeds the threshold, it does not automatically mean the entire assessed income is under-reported income. The determination of under-reported income is governed by Section 270A(3). For an individual in such a scenario, Section 270A(3)(i)(b)(B) prescribes the under-reported income as the difference between assessed income and the maximum amount not chargeable to tax. In this case, the assessed income was identical to the disclosed income, with no additions or unexplained amounts. Furthermore, Section 270A(6)(a) provides an exclusion if the assessee offers a bona fide explanation with full disclosure of material facts. The assessee's explanation of being at sea due to his profession and unawareness of filing requirements, coupled with the fact that his salary income suffered TDS and was reported, and his investments were explained, was considered bona fide. Therefore, the penalty under Section 270A was deleted.

What were the issues?

1. Whether the penalty under Section 270A is leviable when the return is furnished for the first time under Section 148 and the assessed income exceeds the maximum amount not chargeable to tax, even if the returned income is accepted without variation and there is no tax demand? Assessee's contentions: The assessee argued that the entire salary income had already suffered TDS and was reported to the department. The reassessment did not lead to any additional income or unexplained investment. The returned and assessed incomes were identical, and after TDS credit, no tax was payable. The AO wrongly applied Section 270A(2)(b) in isolation without considering Section 270A(3)(i)(b)(B) for determining under-reported income and without examining the exclusion under Section 270A(6)(a). Revenue's contentions: The Revenue relied on the orders of the lower authorities, arguing that since the return was filed for the first time under Section 148 and the assessed income exceeded the maximum amount not chargeable to tax, the conditions under Section 270A(2)(b) were met.

Which sections of the Income-tax Act were involved?

Section 270A,Section 139(1),Section 147,Section 148,Section 144B,Section 270A(2)(b),Section 270A(3)(i)(b)(B),Section 270A(6)(a),Section 270A(7),Section 270A(10)(a),Section 234F

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘F’ BENCH

For Appellant: Shri Aditya Ramachandran
For Respondent: Shri Dhiraj Kumar, SR DR
Hearing: 23/09/2026Pronounced: 23/09/2026

PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the assessee against the order dated 24.03.2026 passed by the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi, for the Assessment Year 2020–21, whereby the learned CIT(A) has confirmed penalty of 2 Vivek Trivedi ₹3,95,123 levied by the Assessing Officer under section 270A of the Income-tax Act, 1961, for alleged under-reporting of income.

2.

The facts, in brief, are that the assessee is an individual employed as a ship captain with MMS Maritime (India) Private Limited. For the year under consideration, the assessee did not furnish his return of income within the time prescribed under section 139(1). Subsequently

The order continues below.

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