Delhi tribunal waives ₹3.74 lakh penalty for late salary tax return after full disclosure

A Delhi tribunal has set aside a penalty of ₹3.74 lakh imposed on a salaried taxpayer who did not file a return on time for assessment year 2019-20, even though his salary income exceeded ₹30 lakh. According to the TV9 Hindi report, the Delhi Income Tax Appellate Tribunal concluded that the taxpayer had not under-reported income because the amount eventually disclosed after notice was accepted in full without any addition during reassessment.

The case turned on a sequence of administrative and procedural lapses rather than any dispute over the tax due. The taxpayer, Agarwal, had changed jobs during financial year 2018-19 and, according to the tribunal’s order as reported by TV9 Hindi, did not receive Form 16 from both employers before the return-filing deadline. He also believed that tax deducted at source, which was visible in Form 26AS, had already settled his liability. After the tax department reopened the assessment, he filed a return declaring total income of ₹30,22,900.

The assessing officer accepted that figure without change, but separately began penalty proceedings under Section 270A for under-reporting income. The penalty was calculated at 50% of the tax on the income treated as under-reported, amounting to ₹3,74,072. The taxpayer challenged the order before the Commissioner of Income Tax (Appeals), but that appeal was dismissed before the matter reached the tribunal.

In deleting the penalty, the tribunal focused on the wording and purpose of Section 270A, which allows penalties in cases of under-reporting but also contains exceptions where a taxpayer offers a bona fide explanation and discloses the relevant facts. The bench noted that the reassessment ended with the exact income the taxpayer had declared, and that the salary and TDS details were already available to the department through Form 26AS. In that context, it held that the case did not involve concealment of income in the sense required to sustain a penalty.

The ruling should not be read as permission for salaried workers to skip return filing simply because tax has been deducted by an employer. Rather, it underlines that the outcome depended on the specific facts: the taxpayer later disclosed the full amount, the department accepted it unchanged, and the relevant salary information was already in the tax system. The case also reinforces a practical lesson for employees: Form 16, Form 26AS and other income records should be checked carefully before filing, because TDS alone does not end the obligation to file a return where the law requires one.