Archive · 27 Jul 2026
ITAT Deletes ₹17.41 Lakh Penalty for Clerical Error
A taxpayer in Mumbai had to pay a penalty of ₹17.41 lakh because they filed an incorrect income tax return.
The mistake was made by a junior employee at the chartered accountant's office.
The taxpayer argued that it was an honest mistake and not done on purpose to avoid taxes.
The CA firm's boss even signed a legal document saying it was their fault.
The court agreed that the taxpayer didn't do it on purpose and removed the penalty.
This shows that if you make a mistake by accident, you might not have to pay a penalty, but if you do it on purpose, you will.
A Mumbai taxpayer faced a ₹17.41 lakh penalty for an incorrect revised income tax return filed for Assessment Year 2017-18.
The error was made by a junior employee at the chartered accountant's office, not the taxpayer.
The CA firm's proprietor filed a sworn affidavit accepting responsibility for the mistake.
The Income Tax Appellate Tribunal (ITAT) found no evidence of deliberate misreporting and deleted the penalty.
The ruling emphasizes that penalties under Section 270A require proof of intentional under-reporting or misreporting of income.
- Who
- A Mumbai taxpayer and the Income Tax Department
- What
- Deletion of a ₹17.41 lakh penalty for a clerical error in income tax filing
- When
- Assessment Year 2017-18
- Where
- Mumbai, India
- Why
- The error was deemed a bona fide human error, not a deliberate attempt to evade tax, supported by an affidavit from the CA firm.
Taxpayer's Defense
Income Tax Department's Stance
Nature of the Error
Taxpayer's Defense
The error was a bona fide human error by a junior employee at the CA firm, not a deliberate attempt to evade tax.
Income Tax Department's Stance
The incorrect revised return suggested under-reporting and misreporting of income, warranting penalty proceedings.
Evidence and Responsibility
Taxpayer's Defense
The CA firm's proprietor filed a sworn affidavit accepting responsibility for the mistake, supported by documentary evidence.
Income Tax Department's Stance
The Income Tax Department initiated penalty proceedings under Section 270A of the Income-tax Act.
Intentionality and Penalty
Taxpayer's Defense
The taxpayer did not intentionally furnish inaccurate particulars of income or attempt to misreport income.
Income Tax Department's Stance
The department argued that the incorrect return constituted under-reporting and misreporting of income.
- Assessment Year
- 2017-18
- Original Income Tax Return
- Loss of ₹1.59 lakh
- Revised Income Tax Return
- Loss of more than ₹1.06 crore
- Penalty Amount
- ₹17.41 lakh
- Section of the Income-tax Act
- Section 270A
- Key Evidence
- Sworn affidavit by the CA firm's proprietor