Janardan Rai vs Income Tax Officer Ghaziabad

PER AMITABH SHUKLA, AM

This appeal filed by the Assessee is directed against the order of Ld. Commissioner of Income Tax(Appeals)/NFAC, Delhi, dated 31.12.2025 arising out of penalty order dated 19.08.2025 passed under section 270A of the Act for the Assessment Year 2019-20. The word ‘Act’ herein this order would mean Income Tax Act, 1961.

The only issue arising in the impugned appeal of the assessee is regarding invocation of penalty u/s 270A of the Act of Rs.70,700/-. As per brief factual matrix of the case, the assessee had not filed its Return of Income u/s 139 of the Act. The Department was in receipt of the information that the assessee has purchased immovable property for Rs.48 lakhs and that the stamp duty value of the impugned property at Rs.58,70,000/-. Pursuant to issue of notice u/s 148, the assessee filed its Return of Income disclosing differential amount of Rs.10,70,000/- (Rs.58,70,000/- - Rs.48,00,000/-) as income from other sources. The ld. Assessing Officer proceeded to levy penalty u/s 270A amounting to Rs.70,700/- on the impugned tax on unreported income of Rs.10,78,190/-. The ld. CIT(A) confirmed the action of the Ld. Assessing Officer.

Heard rival parties and perused the material available on record.

The ld. Counsel for the appellant repeated the arguments taken before the ld. CIT(A). It was argued that the assessee is a semi-literate individual not conversant with tax nuances. It was submitted that soon upon receipt of notice u/s 148, the assessee realized its bona fide mistake and paid the necessary taxes. It was argued that the case of the assessee fell within the ambit of section 270A(6)(a). The appellant has argued that its case is covered by decision of Hon’ble Apex Court in Sahara India Mutual Benefit Co. 337 CTR 377. Reference was also invited to decision of Hon’ble Madras High Court in the case of Natrajan Anand Kumar in WP No.29829/2023 dated 23.01.2024.

The ld. DR placed reliance upon the order of lower authorities. It was argued that the assessee had a premeditated mens rea to evade taxes by not disclosing the correct amount of purchase.

We have noted that the Revenue has not been able to place on record any evidence so as to establish a mala fide mens rea on the part of the assessee to have concealed the said income. The case of the assessee to our understanding falls within the meanings of section 270A(6)(a). Be that as it may be in the interest of justice, we set-aside the order of the lower authorities and direct the ld. Assessing Officer to delete the penalty of Rs.70,700/- imposed vide order u/s 270A. The grounds of appeal raised by the assessee are allowed.

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