Rs 8.29L penalty on employee for not filing ITR

Mr. Saxena, a resident of Malviya Nagar, relocated to the United States of America for a job offer from a multinational company. However, he overlooked filing his income tax return (ITR) in India. When he realized the belated ITR due date had passed in August 2018, he paid the self-assessment tax of around Rs 1.62 lakh, along with interest and late fee.

Despite no reassessment proceedings, the Income Tax Department imposed a penalty of Rs 8.29 lakh on him for misreporting his income, as he earned approximately Rs 26.06 lakh but did not file an ITR. The Income Tax Assessing Officer (AO) accepted Saxena’s return based on Section 148 but initiated penalty proceedings under Section 270A, considering the income disclosed as under-reported.

Despite Saxena's efforts to explain his inadvertent mistake, the Income Tax Officer upheld the penalty. In August 2026, Saxena won the case in ITAT Jaipur, which cancelled the penalty and granted him full relief. Chartered Accountant Jitendra Agarwal represented Saxena in the case. The ITAT Jaipur's SMC bench, consisting of Annapurna Gupta and Kuldip Singh, examined the facts and found his explanation for not filing the ITR credible.

The tribunal noted his history of timely compliance, the coincidence of the missed filing with his relocation abroad, his voluntary payment of tax with interest and late fee before any departmental action, and the acceptance of the income declared in response to Section 148 without variation. Therefore, the tribunal held that Saxena was entitled to the protection of Section 270A(6) and excluded the entire penalty of Rs 8,29,034 from the judgment.