Summary of this article
ITAT cancelled Rs 8.29 lakh penalty after missed ITR deadline.
Taxpayer had moved to US and later paid tax dues.
Tribunal found genuine reasons behind the delayed income tax filing.
The Income Tax Appellate Tribunal (ITAT) has cancelled a Rs 8.29 lakh penalty imposed on a taxpayer who missed filing his income tax return after moving to the US for a new job.
The taxpayer had moved to the US in August 2018 for work. He later realised that he had missed the deadline to file his income tax return (ITR), but by then the window for filing a belated return had also closed.
Taxpayer Paid Tax Before the Department's Action
The taxpayer realised the mistake in August 2019. Although he could no longer file a belated return, he paid the tax due along with interest and a late fee on August 23, 2019.
The Income Tax Department later reopened his assessment and issued a notice asking him to file the return. The taxpayer filed his return on April 18, 2022, declaring a total income of Rs 20.49 lakh.
The income declared by him was accepted during the assessment. However, the Assessing Officer imposed a penalty of Rs 8,29,034, treating the income as underreported because the return had been filed only after the department issued the notice.
The taxpayer challenged the penalty before the ITAT after the National Faceless Appeal Centre upheld the department's decision.
ITAT Considers Reason For Missing Deadline
During the proceedings, the taxpayer explained that he had moved to the US for employment and was going through a major change in his work and living arrangements when he missed the ITR filing deadline.
The ITAT also noted that the taxpayer had regularly filed his income tax returns on time in earlier years. It further considered the fact that he had paid the tax, interest and late fee well before the department began the reassessment proceedings.
The tribunal found the explanation genuine and backed by the facts available in the case. It therefore held that the taxpayer should not be treated as having underreported his income merely because he had missed the original filing deadline.
Rs 8.29 Lakh Penalty Cancelled
The ITAT held that once the taxpayer's income could not be treated as underreported, the related allegation of misreporting could not continue either. The tribunal therefore directed the department to delete the Rs 8,29,034 penalty and allowed the taxpayer's appeal.
