A ₹30.22 lakh salary earner faced a ₹3.74 lakh penalty for skipping ITR filing after switching jobs during financial year 2018-19. According to reports from Mint, the taxpayer could not obtain relevant Form 16 documents from employers in time and believed tax deduction at source (TDS) had fulfilled his obligations. The Income Tax Department reopened the case under Section 147 after issuing a notice under Section 148A(d) on 19 April 2023, following which the taxpayer filed his ITR on 8 May 2023, declaring total income of ₹30,22,900. The penalty proceedings were initiated because the taxpayer failed to file his original return within the prescribed deadline, despite the income being subsequently disclosed in response to the Section 148 notice.
The Delhi Income Tax Appellate Tribunal (ITAT) ruled in favour of taxpayer Pravesh Aggarwal on 13 May 2026, deleting the penalty under ITA No. 6412/Del/2025. As reported by Mint, the tribunal comprising Judicial Member Anubhav Sharma and Accountant Member Manish Agarwal held that there was no suppression or misrepresentation of income. The bench noted that Section 270A(2) covers cases where taxpayers report income lower than actual income, but in Aggarwal's case, the full income was accepted by the Assessing Officer without any additions. The tribunal emphasized that non-filing and under-reporting are not the same under tax law, and relief was based on specific facts including full income disclosure in subsequent return, no additions during reassessment, and the income and TDS being available to the tax department through Form 26AS. The tribunal specifically ruled that since whatever income was reported by Aggarwal has been accepted by the tax department, it is not a case of reporting smaller amount than their actual income.
The tribunal emphasized that salary income and TDS were already reflected in Form 26AS, which was within the knowledge of the Income Tax Department. According to Mint reports, Aggarwal's contention that he was under bona fide belief that tax deducted by employers had discharged his tax obligation was accepted by the bench. The penalty proceedings under Section 270A were initiated because the taxpayer failed to file his original return within the prescribed deadline, despite the income being subsequently disclosed in response to the Section 148 notice. Even though Aggarwal could not get his Form 16, his Form 26AS correctly showed the TDS amount deducted by his employers, making him believe that TDS disclosure alone was sufficient for tax compliance.
The ruling clarifies that non-filing and under-reporting are not the same under tax law. As reported by Mint, the relief was based on specific facts including full income disclosure in subsequent return, no additions during reassessment, and the income and TDS being available to the tax department through Form 26AS. The tribunal emphasized that this case does not establish a precedent allowing salaried taxpayers to skip ITR filing simply because TDS has been deducted, as the specific circumstances and full disclosure were crucial factors in this decision. Tax experts note that ITR filing remains compulsory if income exceeds basic exemption limits, regardless of TDS deduction, and that genuine salaried employees should not be heavily penalized for non-filing, especially when employers have deducted TDS and no under-reporting has occurred. According to tax experts, the case demonstrates that penalty proceedings under Section 270A for under-reporting are unjustified when no original ITR was filed due to lack of knowledge rather than intention to evade tax.
