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ITAT Cancels Penalty for Late ITR Filing Without Under-reporting
Vivek Trivedi missed the deadline for filing his income-tax return.
Later, the tax department asked him to explain his income and a large property purchase.
He filed a return showing income of ₹31.58 lakh.
He explained that the property was paid for using a housing loan, mutual funds and fixed deposits.
His salary had already been reported through tax deducted at source.
The tax officer accepted his explanations and did not increase his taxable income.
However, the officer still imposed a ₹3.95 lakh penalty for under-reporting income.
The ITAT said missing the filing deadline is not automatically the same as hiding income.
It cancelled the penalty because Trivedi had explained the relevant transactions and no additional income was found.
The Mumbai bench of the Income Tax Appellate Tribunal cancelled a ₹3.95 lakh penalty imposed on ship captain Vivek Trivedi.
Trivedi filed his return for assessment year 2020-21 after receiving a reassessment notice.
He declared total income of ₹31.58 lakh, which the tax department accepted without additions.
His salary had already been subject to tax deducted at source, while his property purchase was explained through a housing loan and investments.
The ITAT ruled that late filing alone does not make all subsequently declared income under-reported under section 270A.
- Who
- The Mumbai bench of the Income Tax Appellate Tribunal and taxpayer Vivek Trivedi were involved; the penalty had been imposed by the assessing officer.
- What
- The ITAT cancelled a ₹3.95 lakh penalty for alleged under-reporting of income.
- Where
- The decision was issued by the Mumbai bench of the Income Tax Appellate Tribunal.
- When
- The ruling was pronounced on 23 September 2026; Trivedi filed his return on 27 May 2024.
- Why
- The tribunal found that Trivedi's declared income was accepted without additions, his transactions were explained, and late filing alone did not establish under-reported income.
Taxpayer and Tribunal View
Tax Department View
Effect of late filing
Taxpayer and Tribunal View
Late filing and under-reporting are different issues; the taxpayer's income should not be treated as under-reported when it was accepted without additions.
Tax Department View
The assessing officer treated the entire ₹31.58 lakh declared after the reassessment notice as under-reported income and imposed a penalty.
Explanation for transactions
Taxpayer and Tribunal View
Trivedi supported the property purchase with housing-loan documents, bank records and redemption statements, while salary and interest income were verified.
Tax Department View
The tax department proceeded with the penalty despite accepting the explanations during reassessment; the Commissioner (Appeals) upheld the penalty.
Reason for delayed return
Taxpayer and Tribunal View
The ITAT found credible Trivedi's explanation that prolonged periods at sea and limited connectivity affected his ability to file the return.
Tax Department View
The department initiated reassessment after Trivedi failed to file the return within the deadline prescribed under section 139(1).
Key facts
- Taxpayer
- Vivek Trivedi, a ship captain working with MMS Maritime (India) Pvt Ltd
- Assessment year
- 2020-21
- Declared income
- ₹31.58 lakh
- Penalty
- ₹3,95,123 under section 270A
- Return filing date
- 27 May 2024
- Property purchase
- About ₹1.43 crore; ₹1.30 crore was funded through a housing loan from HDFC Ltd
- Tribunal finding
- No additional income was assessed, and late filing alone did not justify the under-reporting penalty
Sources
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