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Facts
The assessee, Meghal Rajeshkumar Thakor, did not file an income tax return for AY 2018-19. Her case was reopened due to the sale of an immovable property, leading to a notice under section 148. She subsequently filed a return declaring income, but the Assessing Officer initiated penalty proceedings under section 270A for under-reporting income, levying a penalty of Rs. 4,07,239, which was confirmed by the CIT(A). The assessee claimed to have filed Form 68 for immunity under section 270AA and a rectification application under section 154.
Held
The Tribunal found that the assessee failed to provide any documentary evidence, either to the AO or CIT(A), for filing Form 68 for immunity under section 270AA(3) or to substantiate her claim of a technical glitch. Correspondence indicated no online or manual application was produced, and the documents submitted did not include Form 68 with an acknowledgment. Consequently, the Tribunal found that the assessee had under-reported her income and was liable for the penalty, thus upholding the levy under section 270A.
Key Issues
Whether the penalty levied under section 270A for under-reporting income was justified, and whether the assessee was eligible for immunity from penalty under section 270AA.
Sections Cited
270A, 274, 148, 270AA, 139(1), 154
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH, AHMEDABAD
Before: Ms. Suchitra Kamble
आदेश/ORDER This is an appeal filed against the order dated 21-10- 2025 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment year 2018-19.
The grounds of appeal
1. 1. 1. 1. 1. 1. are as under:- “1. The Learned Commissioner of Income Tax (Appeals), has erred in confirming the action of the Assessing Officer in passing an order u/s. 270A of the I.T. Act, 1961 levying penalty of Rs.4,07,239/- which is illegal and bad in law hence the same should be cancelled.
2. The Learned Commissioner of Income Tax (Appeals), has erred in confirming the action of the Assessing Officer in passing an order u/s. 270A of the I.T. Act, 1961 levying penalty without considering the fact that the appellant has filed Form 68 and paid Meghal Rajeshkumar Thakor, A.Y. 2018-19 the tax and interest as per the demand notice issued with the assessment order.
The appellant craves leave to add, alter, amend or modify any of the grounds of appeal on or before the date of hearing of appeal.”
3. The assessee is an individual and has not filed income tax return for assessment year 2018-19. The case of the assessee was selected for re-assessment against the transaction made during assessment year 2018-19. As per the information, the Assessing Officer observed that during the relevant assessment year, the assessee along with 18 other co-owners sold immoveable property for a total consideration of Rs. 10,55,00,006/- to Kaushik Nanubhai Majithia, Rajendra Nanubhai Majithia and Tejas Nanubhai Majithia. The assessee’s share in the said sale is claimed to be Rs. 43,95,834/-. Notice u/s. 148 was issued on 28-03-2022. In compliance, the assessee filed return of income for assessment year 2018-19 on 26-04-2022 declaring income of Rs. 42,03,780/-. The Assessing Officer initiated penalty proceedings u/s. 270A r.w.s. 274 of the Income Tax Act, 1961 for under reporting of the income to the tune of Rs. 42,03,780/- since the assessee has under reported her income and income tax payable thereon was Rs. 8,14,478/-, therefore as per the provisions of section 270A(7) penalty amounting to Rs. 4,07,239/- ( being 50% of tax payable on under reported income) was levied upon the assessee for assessment year 2018-19 vide penalty order dated 29-09-2023.
4. The CIT(A) dismissed the appeal of the assessee.
The ld. A.R. submitted that the return of income was accepted by the assessee, the demand notice accompanying the Meghal Rajeshkumar Thakor, A.Y. 2018-19 assessment order was that of Rs. 16,17,285/-, the demand arose on account of non-granting credit of taxes paid. The ld. A.R. submitted that a rectification application u/s. 154 of the Act was filed on 20-03-2023 requesting thereby for granting of credit of taxes paid. The rectification application was not disposed of. The ld. A.R. further submitted that the assessee also filed a separate application for immunity for penalty as per the provisions of section 270AA of the Act vide Form no. 68 vide letter dated 05-09-2023. The FAO had called for documents with respect to the immunity application u/s. 270AA of the Act. The assessee filed reply dated 08-09-2023 which was uploaded on ITBA on 11-09-2023. It was communicated to the FAO with the application u/s. 270AA(2) that the application for immunity for penalty u/s. 270AA was submitted in Form 68 before ITO-Ward 6(1)(1) Ahmedabad i.e. JAO which was duly verified on 16-03- 2023. The ld. A.R. submitted that no order u/s. 270AA(4) had been served upon the assessee. The ld. A.R. submitted that there is internal correspondence between FAO and JAO which transpires that there was no order passed u/s. 270AA(4) and no online application was found on the ITBA portal. The ld. A.R. further submitted that there was a technical glitch while submitting the application and therefore the window for uploading immunity application was not available to the assessee. On the meeting with the concerned person, the assessee was informed that the said glitch will be discussed with technical team and will be resolved accordingly. Therefore, the ld. A.R. submitted that one of the probable reasons assigned by them was that since there was error, a demand in the case of the assessee was raised since rectification application was not disposed of. The ld A.R. submitted that not only rectification application requesting credit for taxes paid was filed with the 3 Meghal Rajeshkumar Thakor, A.Y. 2018-19 JAO but also the application for immunity u/s. 270AA came to be filed manually. The ld. A.R. submitted that despite taking cognizance of these facts, the CIT(A) completely misled himself in drawing the conclusion that appeal has been filed against the assessment order which has disentitled for immunity u/s. 270A of the Act. The assessee has not filed any appeal against the assessment order and the appeal has only been filed against the penalty u/s. 270A of the Act. Thus, the A.R. submitted that once the rectification application had been disposed of, there was no demand outstanding and taxes along with interest payable as per the order of re-assessment. Further, no appeal against the Assessing Officer was filed by the assessee. The manual application filed has been duly verified on 16-03-2023 and the same was not disputed. Thus, the Assessing Officer submitted that where all the conditions have been duly satisfied, the immunity for imposition of penalty u/s. 270AA of the Act should have been granted to the assessee.
The ld. D.R. submitted that the assessee time and again was asked the evidence as to whether the assessee has filed a manual application or through valid electronic filing Form 68 within the prescribed time limit. The assessee has not given any details about the filing of Form 68 along with manual application at any stage either before the Assessing Officer as well as before the CIT(A). The paper book giving details of rectification application at page nos. 5 to 6 is the only document with the acknowledgment but the reply dated 08-09-2023 is only related to furnishing of documents in support of immunity application and do not contain any acknowledgment or any verification from the Department. Thus, the assessee has not given the details before the Assessing Officer as well as before 4 Meghal Rajeshkumar Thakor, A.Y. 2018-19 the CIT(A) to the extent of granting immunity u/s. 270AA to the assessee. Thus, the Assessing Officer has rightly imposed penalty u/s. 270A and the CIT(A) has rightly confirmed the same.
Heard both the parties and perused all the relevant 7. materials available on record. It is pertinent to note that the assessee did not file return of income u/s. 139(1) of the Act. The assessee for the first time has filed return of income in response to the notice u/s. 148 of the Act on 26- 04-2022 thereby giving the details on sale consideration of the immoveable property (share of the assessee). The assessee is very well aware that the assessee has under reported her income and has asked for immunity as per the submissions of the ld. A.R. but while going through records it can be seen that the assessee during the penalty proceedings under section 270A has not produced any application before the Assessing Officer related to the immunity application in Form 68 u/s. 270AA(3) of the Act. The contention of the ld. A.R. that there was a technical glitch at the relevant time was also not substantiated by any document produced before us at the time of hearing of this appeal. The contention of the ld. A.R. is also not correct as the correspondence between FAO and JAO intents to state that the assessee failed to produce any application online or manual before the authorities and there was no order u/s. 270A(4) of the Act. The documents presented before the Bench at page no. 8 and 9 of the paper book are simply a document which does not contain Form No. 68 annexed to Meghal Rajeshkumar Thakor, A.Y. 2018-19 that and there is no acknowledgment to the same. Thus, the assessee has categorically under reported her income and liable for penalty u/s. 270A of the Act. Thus, the penalty order passed u/s. 270A is justifiable.
In the result, the appeal of the assessee is dismissed.